Selecting a Good Accountant
Selecting a Good Accountant
As an entrepreneur or small business owner, you’ve likely been doing your own accounting or taxes since the inception of your firm. As your company grows, however, you’ll need to hire an expert who will be able to help you save money as well as keep you out of financial trouble or hot water with the IRS. While you might be knowledgeable enough to do basic accounting, there will come a point when you need to seek the skills of a professional.
When to Make the Move to an Accountant
As mentioned above, the small business owner starts out doing their own budgeting, taxes and financial planning during the first few years. As the company grows, that task should be given to a skilled professional, which is the same for other job duties in the company too.
A good accountant can do more than deal with daily transactions. They can help you make critical decisions on the financial health of the company moving forward. They’ll address budgeting concerns, financial analysis and cash management, which will directly influence the future spending and health of the company.
Employee or Independent
First, you’ll need to decide whether you need a full-time bookkeeper working daily in your offices, or if you’ll need an accountant who will be able to make financial decisions. A bookkeeper will keep track of daily expenditures while an accountant can make future predictions based on data.
An accountant can work within the company as an employee or as an independent. This means an accountant who is employed and receives benefits under the company or one who works as an independent freelancer in the office itself. You might hire an outside individual or a firm to handle your growing financial needs too. This individual doesn’t have a desk in your office.
Pros and Cons
Independent Individual or Firm
An independent accountant or firm will work from their own location. You won’t have to provide a desk, computer, software or benefits to the independent who doesn’t work in your offices. They don’t work for your company alone. You won’t be the only client.
An employee will be devoted completely to your firm, and you’ll be able to oversee their hours and tasks. You’ll have to provide office space and benefits to an employee.
Key Qualities and Skills
Expertise and Experience
An accountant needs to have expertise in your industry with a company like yours. If you work in construction, you want the accountant to understand your specialty. Whether you hire an employee or not, you want the accountant to have the experience to know your business. They’ll be able to find you the best tax benefits available.
An accountant will have certifications from the state. The person might be a CPA, a certified public accountant, or a CMA, which is a certified management accountant. Both types of accountants have to take exams and continue their education while in business themselves.
Costs and Duties
The services you need from the accountant will dictate the kind of accountant you’ll choose. If you need someone to be immersed in the daily aspects of your business, you’ll be spending more for an employee who will do ledger maintenance, daily transactions and financial statement analysis. They will handle payroll too. This will cost more but will depend on experience. A firm or independent accountant will have fixed duties and be paid a fixed rate for the hours or duties to be performed.
Interviewing the Candidates
You’ll need to advertise for candidates you’ll hire in-house. One option is to find a firm to do your interviews and bring you the best candidates. The other option is to use a job board specifically for accounting professionals looking for work.
If you want to hire a firm, you can search for accountants in your area. You might want to get a referral from other businesses in the area. Find out who is the best choice for your industry.
The road you choose may differ, but the references from others should be the same for either choice. Ask for references when interviewing your accountant. If you are going with a firm, ask to meet the person that will be handling your account. Make sure that you are comfortable with the amount of attention they’ll be giving to your business. For an individual, make sure they have glowing references from past employers or clients. Any red flags shouldn’t be ignored.
You can’t afford to make a mistake when it comes to choosing a financial professional. When you get those referrals, interview a few acceptable accountants. Before making your choice, check their references. Ask questions and really dig into the type of accountant you’re getting. This is a monumental decision for your business. It could actually make or break the success of your company moving forward. It shouldn’t be taken lightly.