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November 22, 2022

Do I Really Need a Personal Accountant?

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Control of personal finances is needed even for an ordinary person; however, it takes a lot of time and motivation to perform all the procedures correctly. Therefore many people with various revenue and expense streams choose to hire an accountant. Budgeting and planning are no longer your headaches when you delegate part of the authority to a planner. Let’s discuss what kind of specialist you need and what work he is ready to perform.

What type of accountant do I need?

If you don’t have time to work with personal finances or find it simpler to pay a helper than to figure out all the intricacies of money transactions, you may use the services of a professional. But who exactly do you need? The term «accountant» is used to define any specialist who deals with financial matters or taxes, but there are several categories of accountants with different qualifications and responsibilities:

  • A bookkeeper is a specialist who offers concierge services for your finances. He pays your bills, controls your checkbook, and reviews your credit card statements; he may or may not have professional training. A bookkeeper may get certified by a professional or take courses online.
  • An accountant is someone with a degree (most often a university degree) in the financial industry who is well-versed in standard computing procedures. The cost of their services depends on where you are located, what assistance you are looking for, and what level of professional experience the person has to offer.
  • To become a certified public accountant (CPA), a person must pass the CPA single exam and complete additional training each year to validate his certification. Such a specialist does everything the same as the chief accountant, but with one addition – he can file taxes on behalf of the client and represent his interests during a tax audit. Although CPAs complete all tasks at the highest level for the LLC, they may be too expensive to do simple tasks.

A personal accountant may do the work during face-to-face meetings (at home or in the office) with a phone or online. You must give him access to bank accounts, credit card statements, and other documents. That’s why it’s important to carefully check their recommendations before hiring a specialist to deal with personal finances.

What can a personal accountant do?

A personal bookkeeper is a specialist who works with your finances and controls your cash flow. As a rule, such specialists keep accounts, help pay bills, prepare tax returns, and maintain the correctness of statements on accounts and credit cards. However, their scope of duties is not limited to this. Specialists successfully cope with other tasks:

  • Bookkeeping: an accountant records all transactions, especially personal finances. These include paying utility bills, personal loans, credit cards, mortgage payments, personal expenses, and other legal money manipulations.
  • Handling taxes: hardly anyone enjoys filling out tax forms and filing returns. You free yourself from this routine by letting your personal accountant do this work. He will prepare the documents and tell you when they need to be submitted to avoid fines.
  • Financial counseling and planning: sometimes, unplanned purchases affect our ability to pay essential bills like mortgages or utilities. A personal accountant will create a daily, weekly, or monthly budget to avoid unnecessary expenses.
  • Investment strategies: an accountant helps you save enough money to start a small business. And when your personal finances reach the required level, you may again turn to a financial specialist to assist you in making the most profitable investment.
  • Dealing with an inheritance: large inherited estate often results in significant property taxes. If you have a personal accountant, he will advise what to do to avoid overpaying.

Why are bookkeeping services in high demand? Most people don’t have time to analyze their financial statements carefully. And those who fill out all economic forms independently only sometimes know how to check them for errors. It is where a professional accountant comes in.

Do I Really Need a Personal Accountant?

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Main advantages of hiring personal bookkeeping

Many business people overlook the benefits of working with a personal accountant. They control your financial flow and every payment. People with a lot of money and several different sources of income often interact with them. Hiring such a specialist, regardless of the state of your personal finances, can be one of the best decisions you have ever made. Below is a list of the main benefits of working with an professional:

  • He saves you time: income control, accounting, and setting financial goals take a lot of time. These precious hours can be put to good use working on new projects.
  • More chances of loan approval: before applying for loan capital, the accountant may prepare and organize all the necessary data to make financial calculations, which increases your chances of obtaining a loan.
  • Professional support reduces stress: for many people, bookkeeping is a stressful activity that gets in the way of enjoying day-to-day activities. When you interact with a personal accountant, he handles most of the complex work.
  • He will help you with your retirement and cashout planning: a bookkeeper will minimize the chance that you will run out of money. The specialist understands how to manage the risks of low portfolio returns and correctly calculates the capital withdrawal rate.

The interaction with an accountant adds a professional dimension to business people who want success. When partners and clients call not you but your consultant to resolve financial issues, they perceive you as a more respectable and reliable counterparty. The efficiency and organization of an accountant will help improve your reputation.

Can I do all the steps myself?

Yes, you may manage your finances independently and control your cash. Successful implementation of many procedures can be done without deep knowledge of accounting. Quality software for individuals, freelancers, and small companies creates a clear picture of capital inflows and outflows and recommendations for improving your personal finances.

If you don’t have enough savings to hire a personal accountant, an optimal solution is to choose the DIY path. But it takes more time and energy. Be prepared to deal with the time-consuming tasks of filing your tax returns.

How to start cooperation?

The best variant is your interaction with an accountant, who will tell you how to start keeping records. Find a financial specialist who is well-versed in the software you want to utilize. Personal bookkeeper sets up accounts (they work like folders) where you can store data. We advise that you create accounts based on the categories you will use when calculating taxes; this will facilitate preparing a tax return (regardless of who performs this type of work).

You can arrange with an accountant to review your activities from time to time (once a month or quarterly) to ensure that income and expenses are accounted for correctly.

While hiring bookkeeping may seem a significant expense at first glance, it can be a good choice, depending on your revenue and lifestyle. Contact a financial specialist today to improve your economic situation.

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Author: Charles Lutwidge

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