When is it time to hire an accountant?

What does accounting involve in a small business?

An accountant is needed wherever obligations and documents arise. While a business runs on one account, a couple of payments a month and a straightforward tax regime, some tasks can realistically be handled manually. Once payroll, VAT, several business lines, subcontracting, advances and regular reconciliations with counterparties appear, “doing the books in the evenings” stops being a workable model.

Accounting is often reduced to filing a tax return. That is a mistake: the return is the final layer. Before it come supporting documents—invoices, acceptance certificates, delivery notes and receipts—the rules for collecting, reconciling and storing them, and regular payments to the public authorities and people.

For an owner, it helps to keep a simple list of an accountant’s areas of responsibility in mind:

• taxes and reporting under the chosen tax regime
• payroll, income tax and insurance contributions under the applicable rules; in the Russian examples, NDFL (personal income tax) and employee reporting
• documents with counterparties: acceptance certificates, delivery notes, reconciliations and period closing
• cash handling and payment acquiring; in the Russian examples, requirements for online cash registers where applicable
• accounting policies and document storage procedures

When is an accountant required by law?

This section presents a Russian example under Law No. 402-FZ “On Accounting”. It does not describe other countries’ rules: applicable obligations must be checked where the business operates. In Russia, the head of an economic entity organises accounting and the storage of accounting documents.

Under Article 7 of Law No. 402-FZ (in Russian), an organisation’s head must assign accounting to the chief accountant or another officer, or enter into an accounting services agreement. The head of an entity entitled to use simplified accounting methods, as well as the head of a medium-sized enterprise, may keep the accounts personally. Entities listed in Part 5 of Article 6 are excluded: this option is not available to them. A small business size alone does not remove these restrictions.

Certain types of company operate under stricter rules. The law explicitly requires the head of a credit institution to assign accounting to the chief accountant.

A Russian individual entrepreneur (IP) may be exempt from keeping accounts under Law No. 402-FZ if, under Russian tax legislation, they keep records of income, income and expenses, other taxable objects or the prescribed physical indicators. This condition is set out in Article 6 of Law No. 402-FZ (in Russian). Tax records and applicable obligations still remain.

Signs that it is time to hire an accountant

You may be formally entitled to keep your own accounts while the business is already running into risks and time constraints. It is better to rely on signs that are visible in day-to-day work.

The first sign is employees. Once you start hiring, personnel documents, reporting and deadlines appear, along with taxes and contributions under the applicable rules. In the Russian example, these are NDFL and insurance contributions. A mistake here costs more than “sorting it out over the weekend”. If this is relevant, keep the guide to Russian taxes paid by an individual entrepreneur for an employee (in Russian) handy. It relates to Russia.

The second sign is growth in turnover and transaction numbers. When payments multiply, discipline around supporting documents starts to break down: receipts get lost, acceptance certificates are signed late and month-end closing turns into a marathon. In a project-based business this shows up quickly: payments arrive before the work, purchases and subcontracting follow, and at some point it becomes hard to reconstruct the picture from memory.

The third sign is VAT and working with large customers. Even discussions about becoming subject to VAT usually mean that, without an accountant or a capable outsourced service, the business will be constantly putting out fires. For Russian businesses, changes to thresholds and VAT in 2026 require particular attention: see the guide to Russia’s 2026 tax reform (in Russian). This example must not be applied to other countries; applicable changes should be tracked systematically.

The fourth sign is several business lines or sites whose money gets mixed together. Financial accounting is often confused with management figures here. An accountant will complete the reporting, yet the question “which project earns money?” will remain. In a growing company, the two therefore work together: financial accounting handles obligations, and management accounting gives the owner a basis for decisions.

The fifth sign is regular reconciliations and disputes with counterparties. When a business uses contractors and accountable advances, it needs to see how much has been issued to whom, who has reported their spending and where advances remain outstanding. Otherwise money starts disappearing in “small details” that surface at the least convenient moment.

When can you keep your own accounts?

A microbusiness can most often manage on its own when its starting conditions are simple: one owner, few transactions, clear incoming payments, no employees, no VAT and no complicated contractual arrangements. This resembles being your own financial administrator, provided the law allows you to keep the accounts yourself in your circumstances.

Even then, you can keep things in order. It takes regular work; heroic nights before filing reports are no substitute for it.

If you want to keep your own accounts, a short set of procedures helps. It can follow this outline:

1. Create a calendar of mandatory payments and reports for your tax regime.
2. Set the rule “payment day = recording day” and do not put off supporting documents.
3. Once a week, reconcile cash balances, customer debts, amounts owed to contractors and accountable advances.
4. Once a month, close the period: signed acceptance certificates, collected receipts and a clear picture of profit by job or project.

For this to work, you need tools that reduce manual effort. In the 101 App, management accounting is built around projects: each site has its own financial balance, payments, expenses, profit and debts, and documents can be stored digitally alongside transactions.

How to choose: an employee, outsourcing or part-time support?

Hiring an accountant does not always mean employing someone full-time. In a small business, the arrangement that matches the workload usually works best: an external specialist handles some tasks, an administrator or the owner handles others, with a sensible accounting rhythm alongside.

The table below provides a guide to the arrangements. IP and OOO are Russian business forms; the legal conditions for keeping your own accounts relate to the Russian example above. The guide does not replace a calculation for your own circumstances, but it helps you quickly see where to look.

One piece of advice that saves stress: whatever the arrangement, agree on where supporting documents are kept and who is responsible for them. If documents are scattered across email, messengers and “deal with later” folders, an accountant—whether in-house or outsourced—will spend time searching, and the business will pay for the chaos.