There are many different types of accountants, all with varying degrees of knowledge and expertise. Without a good accountant, your business finances can turn into a huge mess — one that could cost you dearly, not only with your state and local government, but with the IRS as well.
Here are the top three questions to ask in order to find the best accountant for your small business:
Do you need to hire an accountant?
Before deciding which accountant to hire, the first question to ask is whether or not your business needs one. There are many different levels of finance professionals and they range from bookkeepers to junior accountants to full-blown CPA’s (and then of course there are certified financial planners). All of them offer something different based on the needs of your business and your industry.
You may or may not need to hire a bookkeeper, depending on the size of your business and the daily volume of transactions, as you may be able to do the prep work yourself. More than likely, however, you need a CPA who knows a thing or two about taxes, and has the capability to file on your behalf.
There’s one thing that every business has in common, and it’s that they are required to file and pay taxes — whether it’s simply as a sole-proprietor or a more complicated LLC. Your company’s money, taxes and financial standing with the IRS are not something to take lightly, so don’t skimp on this hire!
So, what can an accountant or bookkeeper do for your small business?
• File the correct paperwork to the state and IRS
• Calculate taxes and makes monthly or quarterly payments
• Prepare quarterly and yearly income reports and statements
• Perform consistent audits of your books
• Help you create and reach financial goals
• Prep and files yearly income taxes
• Measure if your business is producing enough revenue
• Advise you on taxes, financial goals, business purchases, making hires, and more
Some CPA’s can even advise on legal issues and draw up contracts. Essentially, a qualified accountant will take care of the financial logistics of running a business. They’ll be able to head up all the steps it takes to get a business going, and make sure it runs smoothly.
In what area does the accountant you’re considering specialize?
Now that you have an idea of what an accountant does, how do you find the perfect match for your business? Start by finding out their specialty. Do they focus on investments, or small businesses, or families with a lot of real estate?
For example, if you invest in oil and gas commodities, you want a bookkeeper who specializes in oil and property, since there are tax deductions specifically made available to this market. Likewise, if your financial situation is relatively simple, you don’t want to overpay for a highly-educated CPA when a junior accountant would do just as well.
Does he or she come highly recommended?
A sign of a good accountant is that they are highly recommended and have excellent credentials. You can verify an accountant’s qualifications by looking up their information with your state’s local board of accountancy.
All bookkeepers and CPA’s are required to log a certain amount of hours of continuing education and must belong to an organization, like the American Institute of CPA’s (or something similar).
Also, check the Better Business Bureau’s website to see if any infractions or complaints have been filed with the accounting agency. Lastly, head over to the IRS website to verify that their license is valid, by searching to see if the taxpayer has been disciplined or convicted of any fraud by the authorities.
Finding the Perfect Accountant for Your Small Business
Finding the perfect accountant based on your personal, financial and business requirements is no easy feat. Know that it can take time to find the right one, and you might have to test out a few before hiring the best one for your needs.
Your situation is unlike anyone else’s and this becomes especially evident when working with an accountant. Much like a doctor who needs to know your medical history, family background and any current problems, an accountant needs to know your entire financial picture. The more information you give them, the better they’ll be able to help you make the best tax moves, invest in the right ventures, and plan for the future.
Be patient and follow these steps before deciding who you trust with your small business.
Do you have any tips for finding an accountant?