With Washington talking about tax cuts non-stop lately, small business owners are stressing out. Some are worried that the tax cuts may end up burdening their business while others are worried about how it could affect their bottom line. If you’re still managing your finances on your own, it’s time to find an accountant.
Finding an accountant you can trust is essential to protecting your business’s assets, managing cash flow, and limiting spending. A savvy accountant is important to the growth of your business but they also hold the keys to the castle.
Some of the most famous people on the planet have had their lives turned upside down by their accountant.
Trust should be the number one thing you prioritize when you seek to find an accountant.
In order to find an accountant you can trust with your company’s future, we’ve put together a series of things you should look for in your accountant.
Why Your Business Needs An Accountant
The variety of tasks and services that a licensed accountant can offer to a business begins at the start of defining their business format. Choosing the right option will determine the amount of tax and growth that a business can see.
If a business fails or ends up in court, the liability of the owner depends on your format. Choosing a partnership, sole trader, or limited company also affects how much finance can be raised. Make sure you and your accountant have this conversation before you sign your first check.
The software you choose to build your records with will also influence who is able to quickly onboard onto an accounting team. Your accountant can advise you and help you set up your first accounting records. Starting off on a good foot will set the tone of your company’s financial health for years to come.
Once your business is off the ground, your accountant will manage your tax returns. They can be sure that all of your client balances are evened out. Your accountant will be responsible for your payroll and ensure that your employees get their W-2 forms.
Accountants can protect your business from future tax liabilities by taking advantage of all tax relief available.
By understanding the ins and outs of your financial status, your accountant can plan the future of your company’s finances and investments you should consider. They will figure out how to finance business development and write a roadmap to get you to that point.
More than anything, your main reason to find an accountant could be to balance your checkbook so that your business doesn’t run out of money.
When You Need To Look For An Accountant
Once your business has established a concept and a general business plan, you should consult an accountant. They can help shape the feasibility of your business plan and help predict the financial forecasts as they pertain to you.
You’ll need to start raising capital while staying within the bounds of local and federal financial regulations. Your accountant can help you manage that as well as put you in touch with who you need to contact to register your new business.
After your business starts, and they’ve helped you decide on the business format, you can fill out all the registrations you need to certify. Your business format will also affect how you label your letterhead, file for patents and communicate with customs.
What Small Businesses Need To Consider
How Big Of a Firm Should You Use?
You should look for an accounting firm that is local to you and is a member of a certified or chartered accounting body. Be sure that they have insurance in case of any mishaps.
This doesn’t mean that you need to find a massive firm with hundreds of accountants. Ideally, your firm should be about the size of your company or else one that has clients similar to your size.
More than anything, you need to be sure that when you find an accountant, they know the hurdles you face.
You should give second look to any accountant who has experience with your sector or type of business. They could bring invaluable experience to your company.
If you anticipate any kinds of audits or insolvency, be sure you’ve hired an authorized accountant for that.
How Should You Introduce Yourself?
You shouldn’t choose your accountant last minute. Schedule time into your business planning meetings to talk about what your company wants from this important long-term relationship.
Find a handful of firms that you’re interested in and schedule at least three meetings. While you’ve got their scheduling staff on the phone, ensure that their first appointment comes free of charge.
Know that if you ask for advice instead of asking questions that lead to a hire, you may get a bill.
What Should You Say?
When you sit down with your accountant, be forward with all the information you have about your finances. If you know what services you need, make a checklist and be sure they offer all of them.
Be open to feedback and ask how your accountant could improve them.
You need to find an accountant who can understand your business plan. See how much they would charge to create a financial forecast. And if you really get along, ask whether they could offer personal financial advice.
Talk about fees up front and when payments should be scheduled. Make sure you know exactly who will be dealing with your work at the firm.
You could find an accountant and never meet them face-to-face. If this is an issue for you, be sure that your firm is open to a one-on-one meeting with the agent tasked with your work.
Any firm worth its salt should be open to linking you to current or former clients. References can help seal the deal.
Once you’ve made an agreement, you should get an “engagement letter” that lists all the terms you’ve talked about. This is your chance to make any final changes.
Following your meeting, stay in touch throughout the year. Wait until the end of the fiscal year and you’ll be talking to an accountant who is juggling multiple accounts and who has less time for yours.
Anytime your business makes a big change, acquisition, or pivot, be sure your accountant knows. The more advance notice you can offer, the better they can prepare your finances for maximum profit.
How Do We Build Our Relationship?
Trust your accountant’s experience, especially if they know your field. Your accountant has a perspective on businesses of different sizes, in different phases of life, so they can prepare you for the worst.
Assess your finances periodically. See if they’re willing to forward you a quarterly report.
If your accountant’s rates have changed or are cutting into your profits, you can renegotiate what they charge every few years.
Should you consider selling your business, you should tell your accountant immediately. There are a ton of tax liabilities you’ll want to minimize so that you don’t suffer serious losses.
If Your Small Business Can’t Afford To Find An Accountant
Businesses that struggle to find a CPA or are unable to budget for a full-time accountant still have options. No matter how stressful it can be to find an accountant, you shouldn’t take on the work yourself.
You can hire a part-time accountant or a bookkeeper. While you won’t end up with someone who has intimate knowledge of your business, you’ll still have some oversight.
Think about hiring a virtual CFO. A virtual CFO works remotely for a wide range of companies at a low rate. They bring some of the expertise of an accountant and will take some of the load off of your shoulders.
Consider investing in business-planning or forecasting software. While it will take some time to learn how to make use of this new tool, it’s an affordable option for startups still building their capital.
Avoid Common Mistakes
One of the biggest mistakes a small business can make is to put off hiring an accountant until they have the time. The truth is, for most business owners, there will never be a better time than when you’re starting your business. And then the IRS comes knocking…
Many businesses fail to open separate business bank accounts, mixing their business transactions with their personal spending. This is a very sticky mess that you no doubt should try to avoid. You’ll spend way too much money on hourly rates just so that your accountant can parse through the mess.
There are plenty of established, healthy-looking businesses that submit everything to their accountant during tax season but are in no shape to pay their taxes. Put money away throughout the year so that you don’t get blindsided by fees at the end of the fiscal year.
Listen To Reviews and Trust Your Gut
Get a hold of some reviews while you’re seeking to find an accountant. Whether they’re on Yelp, LinkedIn, or found through testimonials on their site, listen carefully. If there’s a business that looks like yours, who has dealt with the firm you’re looking at, weigh their feedback heavily.
Don’t be afraid to trust your gut. While you may not be well-versed in all financial-related issues, you know when you feel you can trust someone.
If you have any questions about how to find an accountant, feel free to contact us. We want you to make a decision that you feel will help your business to thrive.