When to hire an accountant for your small business

Published Friday 15 May 2026

Table of contents

• When do you need an accountant?
• What to look for when hiring an accountant
• How much does an accountant cost in Australia?
• An accountant can help with your finances
• Hire an accountant when you deal with the government
• An accountant helps when you apply for a business loan
• When your company is growing, hire an accountant
• Hire an accountant when you're ready to delegate
• Questions to ask before you hire an accountant
• Common tax mistakes to avoid
• Simplify your finances with Xero
• FAQs on hiring an accountant

Key takeaways

• Hire an accountant when your tax situation gets complex, such as when you have multiple income sources, investments, or an ABN. The right structure choice between sole trader, company, or partnership affects your taxes, liability, and growth options.
• Verify your accountant holds recognised qualifications such as CPA, CA, or IPA membership and is registered as a tax agent. Only registered tax agents can legally charge fees for tax services in Australia.
• An accountant typically costs $100–$300 for an individual tax return and $150–$600 or more per month for small business accounting. The savings they find often exceed their fees.
• Engage an accountant before major events such as loan applications, audits, or buying or selling a business. Their professional documentation and expertise improve your outcomes and credibility with banks and buyers.

When do you need an accountant?

You need an accountant when your financial situation becomes too complex or time-consuming to manage on your own. Growing businesses face key moments when professional accounting help pays off, from choosing a business structure to applying for loans.

You don't always need a full-time accountant. Sometimes a few hours of their time is enough to save you money and stress.

The real cost of DIY accounting includes more than just the tax return itself. Consider these factors before deciding to do it yourself.

• Time investment. Spending 10 hours on taxes when your time is worth $100 an hour costs $1,000.
• Error risk. Making costly mistakes becomes more likely when you're multitasking, contributing to what the ATO identifies as a tax gap of more than $5 billion from honest errors and poor record keeping.
• Opportunity cost. Those hours could generate revenue for your business instead.

An accountant often costs less per hour than your own time is worth. You'll gain peace of mind knowing an expert handles the details. To understand more about what an accountant does, it helps to know the full range of services they offer.

Complexity triggers

Certain financial situations signal that DIY tax is no longer practical. If any of the following apply to you, it's time to consider professional help.

• Multiple income sources. Juggling a salary, freelance work, and rental income makes your return significantly harder to get right.
• You have an ABN. Running a business adds GST obligations, business deductions, and activity statement requirements on top of your personal tax.
• Investment portfolios. Shares, property, cryptocurrency, and managed funds each have unique tax rules around capital gains, dividends, and franking credits.
• Overseas income. Foreign income, assets, or work done abroad introduce complex reporting rules and potential double-taxation issues.
• Changing business structure. Moving from sole trader to a company or trust creates one-off tax events that are easy to get wrong.

You'll need advice about your company's legal structure

Your business structure affects your taxes, personal liability, and growth options. Data shows the largest type of small businesses are sole traders (46%), followed by companies (26%). An accountant can explain which structure suits your situation and help you set it up correctly.

Common business structures in Australia each carry different implications for tax and liability.

• Sole trader. Simple to set up, and you can offset some living expenses against tax. However, you're personally liable for all business debts.
• Company. Limits your personal liability to the assets owned by the business. More complex to manage but offers greater protection.
• Partnership. Shares responsibilities and profits between partners, with each partner liable for business debts.

The right structure depends on your risk tolerance, growth plans, and tax situation. An accountant can walk you through the implications of each option before you commit.

You'll need advice when you write a business plan

An accountant adds credibility to your business plan by creating realistic financial projections, cash flow forecasts, and professional reports. These elements help convince investors and lenders that your business is viable.

Hiring a professional at this early stage means you benefit from their financial expertise from day one. This can save you time and money compared with bringing one in later. A business plan template can help you get started.

What to look for when hiring an accountant

Not all accountants offer the same services or expertise. Before you hire, understand what qualifications, experience, and support you should expect. For a deeper dive, read this guide on how to choose an accountant.

Qualifications and credentials to verify

Look for accountants with recognised professional qualifications. In Australia, this typically means holding one of these credentials.

• CPA (Certified Practising Accountant). Members of CPA Australia with ongoing professional development requirements.
• CA (Chartered Accountant). Members of Chartered Accountants Australia and New Zealand who have completed three years of mentored experience to apply their skills.
• IPA (Institute of Public Accountants). Members of IPA who meet education and experience standards, with a focus on small business and SME advisory.
• Registered tax agent. Licensed by the Tax Practitioners Board to provide tax advice and lodge returns. According to the ATO, they're the only people that can charge a fee for this service.

Ask about their qualifications upfront. A qualified accountant has met education, experience, and ethical standards that protect you.

Experience with your industry and business size

An accountant who understands your industry can offer more relevant advice. Ask whether they work with businesses similar to yours. Consider their experience in these areas.

• Industry. Retail, construction, professional services, and hospitality each have unique accounting needs.
• Size. An accountant used to large corporations may not suit a sole trader's needs.
• Stage. Startups, growing businesses, and established companies face different challenges.

Services and support they provide

Accountants offer different levels of service. Clarify what's included before you commit. Common service levels include the following.

• Tax returns only. Basic compliance work at tax time.
• Ongoing bookkeeping. Regularly recording transactions and reconciling accounts. You might also consider hiring a bookkeeper for day-to-day transaction work.
• Advisory services. Providing strategic advice on growth, cash flow, and business decisions.
• Payroll and BAS (Business Activity Statement). Managing employee payments and GST (Goods and Services Tax) obligations.

Make sure their services match what you actually need.

Technology and software compatibility

Ask which accounting software they use and recommend. Working with an accountant who uses the same platform as you makes collaboration easier.

Cloud-based software lets you and your accountant access the same data in real time. This means faster answers, fewer errors, and better visibility into your finances.

Data security and privacy

Your accountant handles sensitive financial data, so cybersecurity matters. Ask how they protect your information before signing on.

Consider these data protection questions when evaluating an accountant.

• Encryption. Check whether they use encrypted file sharing and secure cloud storage rather than email attachments.
• Access controls. Ask who in their practice has access to your financial records and how they manage permissions.
• Backup and recovery. Confirm they have systems to protect your data from loss, ransomware, or hardware failure.
• Privacy compliance. Verify they follow the Australian Privacy Principles and have a clear privacy policy for client data.

A reputable accountant should be able to explain their security practices clearly. If they can't, that's a red flag.

How much does an accountant cost in Australia?

An accountant in Australia typically costs $100–$300 for an individual tax return and $150–$600 or more per month for ongoing small business accounting. The exact price depends on the complexity of your finances, the services you need, and your accountant's experience.

Here's a general guide to what you can expect to pay.

• Individual tax return. $100–$300 for a straightforward return with salary income, deductions, and investment earnings.
• Sole trader tax return. $200–$500 for returns that include business income, GST, and activity statements.
• Small business monthly accounting. $150–$600 or more per month for bookkeeping, BAS lodgement, payroll, and financial reporting.
• Advisory and strategic services. $150–$400 per hour for tax planning, business structuring, and growth strategy.

Several factors affect the price you'll pay. These include the number of transactions your business processes, whether you need BAS or payroll services, and how organised your records are when you hand them over.

Many business owners find that a good accountant saves them more than their fee. Tax-agent-prepared returns have higher compliance rates than self-prepared returns, and accountants often identify deductions you'd miss on your own.

An accountant can help with your finances

Hire an accountant when your finances feel out of control. If you're losing track of who owes you money or struggling to understand your cash position, professional help can get you back on track.

An accountant can help you regain control of your finances in several ways.

• Track receivables. Know exactly who owes you money and when it's due.
• Monitor key metrics. See how payroll costs compare to revenue over time.
• Understand your position. Get clear charts and reports showing your financial health at a glance.
• Manage cash flow. Spot potential shortfalls before they become problems.

When your accountant uses cloud-based accounting software with cash flow tracking, they can share real-time reports with you. You'll always know where your business stands financially.

Hire an accountant when you deal with the government

Government compliance is one of the most time-consuming parts of running a business. ATO data shows that on-time payment for small businesses is closer to 70%, compared to nearly 90% for all taxpayers. Many small business owners hire an accountant when their first tax filing is due, but accountants help with far more than tax returns.

A good accountant handles many compliance tasks on your behalf. They will:

• File compliance documents. Complete and lodge required legal paperwork for your business.
• Stay current on tax laws. Keep you informed about changes that affect your obligations.
• Prepare financial statements. Create annual accounts that meet regulatory requirements.
• Manage company records. Update registers for directors, shareholders, and business changes.
• Handle payroll. Ensure employee tax codes and superannuation payments are correct.

Preparing your tax documents correctly could save you more money than your accountant charges. A good accountant will also identify ways to improve your cash flow and reduce your tax burden legally.

Hire an accountant in case you're audited

Audits are rare but stressful when they happen. While most small businesses won't be audited, the process is expensive and time-consuming if you're selected.

If you don't have an accountant when an audit notice arrives, hire one immediately. They'll guide you through the process and help you avoid future compliance issues.

Better yet, hire an accountant before an audit happens. Look for one who offers audit insurance. This coverage pays for the professional fees involved in responding to tax office enquiries, reviews, or investigations. Without it, you'll pay extra for the considerable work an audit requires.

Good accounting software maintains an audit trail automatically. This makes it easier for both you and the tax office to see exactly what transactions occurred and who authorised them.

An accountant helps when you apply for a business loan

An accountant improves your chances of loan approval by providing professional financial documentation. Banks want confidence they'll get their money back, and well-prepared accounts demonstrate you're serious about your business. This is critical when many small businesses have historically worried about their ability to meet the next three months of financial commitments.

An accountant provides essential support when you apply for loans. They help by:

• Preparing financial statements. Creating professional reports that back up your funding request.
• Answering lender questions. Explaining revenue projections and expense forecasts credibly.
• Comparing loan options. Advising whether terms, conditions, and interest rates are favourable.
• Building credibility. Simply having an accountant signals to banks that you manage finances professionally.

With good accounting software, your accountant can quickly produce the facts and figures lenders need to make a decision.

When your company is growing, hire an accountant

Rapid growth creates financial complexity that can overwhelm your existing systems. A new client or big project can mean scaling faster than expected. That's when an accountant becomes essential.

An accountant helps you manage growth in several ways.

• Handle the details. Manage payroll, employee taxes, and new overhead costs so you can focus on the bigger picture.
• Analyse cash flow. Ensure you have enough working capital to support expansion.
• Review pricing. Check your margins can sustain increased volume.
• Time new offerings. Advise when to introduce new products or services based on financial readiness.

Growth is exciting, but it can strain your finances if not managed carefully. An accountant helps you expand without losing control.

Get an accountant's advice before you take on a franchise

Franchise agreements contain complex financial obligations that are hard to evaluate alone. An accountant can analyse the contract and help you understand what you'll actually earn after fees.

Franchises offer trade-offs that you should carefully consider.

• Benefits. Brand recognition, marketing support, proven systems, and product supply.
• Costs. Ongoing royalties, marketing levies, and reduced commercial freedom.
• Obligations. Territory restrictions, supplier requirements, and reporting standards set by the franchisor.

Franchise contracts vary significantly. Some charge flat fees while others take a percentage of revenue. An accountant can review the specific terms, calculate your likely income after all deductions, and help you decide if the opportunity is worthwhile. If you're exploring options, consider some business ideas you can start from home as well.

Only you can make the final decision, but detailed financial analysis gives you the confidence to choose wisely.

Get an accountant's advice before you buy a business

Buying an existing business carries hidden risks that only show up in the accounts. Always consult an accountant before signing anything. They'll examine the financials in detail and flag potential problems.

An accountant will thoroughly review the business's financial records. They'll check:

• Asset ownership. Whether equipment is fully owned, leased, or still being paid off.
• Outstanding debts. Any liabilities you'd inherit with the purchase.
• Revenue accuracy. Whether reported income matches actual bank deposits.
• Hidden obligations. Contracts, warranties, or commitments that transfer with the business.

Work with a lawyer alongside your accountant. Together, they'll uncover everything you need to know before committing.

Get advice from an accountant before you sell your business

How you structure a business sale significantly affects how much you keep after tax. An accountant helps you maximise your return and present your business professionally to buyers.

An accountant provides essential support throughout the sale process. They help by:

• Preparing financial records. Creating clean statements of accounts that buyers and their advisors expect.
• Presenting your business. Producing charts and reports that show your company in the best light.
• Managing due diligence. Speaking directly with buyers' accountants during the review process.
• Structuring the deal. Advising whether a lump sum, instalments, or earn-out arrangement is most tax-efficient.

How you structure the sale can substantially affect your outcome. A good accountant ensures you get the best possible result when you sell up.

Hire an accountant when you're ready to delegate

Successful business owners know when to delegate. If you're feeling overworked and stressed, it might be time to hand over your financial management to a professional.

Many business owners struggle to let go. You might feel no one knows your business as well as you do. But trying to do everything yourself leads to burnout and mistakes.

Start by delegating your finances. An accountant brings expertise you don't have, freeing you to focus on what you do best. Once you trust someone experienced with your financial information, you'll have more time and energy for growing your business.

The most successful business owners are experts at finding the right people for each task. Managing your finances is one of the first things worth handing over.

Questions to ask before you hire an accountant

Asking the right questions helps you find the best fit for your business. Before your first meeting, prepare to discuss these key topics.

• What are your qualifications and how long have you been practising?
• Do you have experience with businesses like mine?
• What services do you provide, and what's not included?
• How do you charge for your services?
• Which accounting software do you use and recommend?
• How often will you communicate, and how quickly do you respond?
• Who will actually be handling my account?

Pay attention to how they answer. A good accountant explains things clearly without jargon. They should ask questions about your business too, showing genuine interest in understanding your needs.

Your instincts matter when choosing someone to handle sensitive financial information.

Common tax mistakes to avoid

The most common tax mistakes in Australia include failing to report all taxable income, overclaiming deductions, and relying too heavily on pre-filled ATO data. Avoiding these errors can save you from penalties and unexpected tax bills.

Here are the mistakes that catch small business owners out most often.

• Excluding taxable income. Cash payments, foreign income, cryptocurrency gains, and side-hustle earnings are all taxable. Leaving them off your return can trigger an ATO audit.
• Overclaiming deductions. Only claim expenses directly related to earning your income. The ATO uses data matching to compare your claims against industry averages, so inflated deductions get flagged.
• Relying on pre-filled ATO data. The myTax pre-fill is a helpful starting point, but it doesn't capture everything. Interest income, dividends, and private health insurance details can be missing or delayed.
• Poor record keeping. You need receipts and records for every deduction you claim. Without them, the ATO can disallow deductions entirely during a review.
• Missing deadlines. Late lodgement attracts penalties that increase over time. If you can't meet a deadline, a registered tax agent can apply for an extension on your behalf.

An accountant helps you avoid these mistakes by keeping your records organised and your returns accurate. They also stay on top of changing ATO requirements so you don't have to.

Simplify your finances with Xero

From startup to sale, accountants provide valuable support at every stage of your business journey. The right accountant makes life easier, giving you more time to focus on what you love doing.

Your specialty is running your business. Leave the financial details to an accountant. When you both use cloud-based accounting software, you can collaborate seamlessly while maintaining visibility over your finances.

Ready to find the right accountant for your business? Get connected with an experienced accountant in the Xero advisor directory. When you work with a Xero-connected accountant, you can share your financial data seamlessly. Get one month free when you start with Xero.

FAQs on hiring an accountant

Here are answers to common questions small business owners have when deciding whether to hire an accountant.

What's the difference between a registered tax agent and an accountant?

A registered tax agent is licensed by the Tax Practitioners Board to lodge tax returns and charge a fee for tax advice. An accountant may hold CPA, CA, or IPA qualifications but can't legally charge for tax services unless they're also a registered tax agent.

Can an accountant help extend my tax deadline?

Yes. Registered tax agents can lodge returns on your behalf with extended deadlines, often up to May the following year instead of the standard 31 October deadline. If you engage a tax agent before your original due date, you'll typically qualify for this extension automatically.

What records should I keep for my accountant?

Keep receipts for all business expenses, bank and credit card statements, invoices, payroll records, and any contracts or loan agreements. The ATO requires you to keep most business records for five years.

Is hiring an accountant worth the cost?

For most small businesses, yes. A good accountant saves you time and reduces errors, with tax-agent-prepared returns having higher compliance rates than self-prepared ones. They often identify deductions and tax savings that exceed their fees.

What's the difference between an accountant and a bookkeeper?

Bookkeepers handle day-to-day transaction recording, bank reconciliation, and basic reports. Accountants provide higher-level services such as tax planning, financial analysis, business advisory, and statutory accounts.

How do I know if an accountant is qualified in Australia?

Check for membership in CPA Australia, Chartered Accountants Australia and New Zealand, or the Institute of Public Accountants. For tax services, verify they're registered with the Tax Practitioners Board at tpb.gov.au.