Running a business is no small task, and especially once tax season comes around or even just with setting financial goals, business owners may not possess all of the knowledge necessary in order to set their brands up for success. This is where a business accountant comes in:
- Not only can they guide you through hidden deductions and pesky tax forms, but they will also provide solid advice about planning and projections.
Why Is Accounting Important?
Accounting plays a vital role in running a business because it helps you track income and expenditures, ensure statutory compliance, and provide investors and management, according to PDR. It can also help the government with quantitative financial information, which can be used in making business decisions.
There are three key financial statements generated by your records:
- The income statement provides you with information about the profit and loss.
- The balance sheet gives you a clear picture on the financial position of your business on a particular date.
- The cash flow statement is a bridge between the income statement and balance sheet, and reports the cash generated and spent during a specific period of time.
It is critical you keep your financial records clean and up to date if you want to keep your business afloat. If you are already using a bookkeeper or bookkeeping program to stay on top of everyday business finances, bringing on an accountant will hand all of those tasks over to someone who will analyze your numbers and offer you important insights. According to Forbes, accountants handle numerous tasks, including:
- Tax return preparation, filing, and amendments
- Identifying eligible tax deductions
- Preparing financial statements, such as balance sheets, income statements, and statements of cash
- Account maintenance and management
- Help maintain a steady cash flow
- Payroll and fixed asset accounting
- Financial forecasting
- Financial analysis and advice, including potential areas for growth
Steps to Finding a Business Accountant
Now that you see how much an accountant can help your business and take a load off of your shoulders, it is time to start the hunt. For something like this, you may want to ask other business owners who they use or even other colleagues to see if they know anyone. Conducting an internet search for something like this could be overwhelming, and you can get inundated with ads, so be cautious when doing this.
Here are some steps to follow when searching for a business accountant:
1. Consider Why You Will Use the Accountant
Forbes advises that the first thing business owners should think about when finding an accountant is to determine what functions you want them to assist you with, as well as how often you will require their services. Start by making a list of priorities — the items that need attention right away, and the ones that will need to be addressed within six months. Next, you will have to pick if you want to work with an independent accountant or an accounting firm.
2. Ensure the Accountant is Certified
Not every business accountant is a Certified Public Accountant (CPA), and when it comes to getting advice on financials, it is smart to work with a CPA, according to Fundera. Business owners that work with CPA’s can be confident that they are pre-screened, well-trained, and experienced. Plus, they need to renew their certification periodically, so you can be sure that their knowledge is up-to-date and they can handle any responsibility. To find a CPA, go straight to the American Institute of Certified Public Accountants (AICPA) where they will have a directory of CPAs, accounting companies, and local accounting organizations.
3. Evaluate Your Accountant
Just as you would not hire an employee without an interview and a careful analysis of their resume, Business News Daily suggests doing a background check on the accounting firm and asking for client references. If everything checks out, arrange a meeting to discuss who you are, what you want to do, what steps you have already taken, and your goals. Ask the CPA if they have experience and expertise working with a business in your specific field, as well as how readily available they are going to be, how much time they will dedicate to you, and whether the work will be done at your place of business or the accountant’s.
4. Hire Your Accountant
Now that you know the services the accountant will be helping you with and how reputable they are, you can finally hire them. The median salary is $70,500 per year ($33.89 an hour), according to the U.S. Bureau of Labor Statistics. If you work with an accounting firm or independent accountant, most charge $100 to $275 per hour. If price is a major concern, you may be able to negotiate a flat fee to keep the accountant’s services on retainer.
Even though hiring a business accountant will not happen overnight and may take some thought, overall, it is a good idea to have one help with your businesses finances and ensure you are fully prepared come tax season. Follow these tips to get the most out of your accountant.