Why Choosing the Right Accountant Should be your #1 Priority
Choosing an accountant is like choosing a new business partner. But, first of all, what is an accountant? An Accountant is someone who solves a problem you didn’t know you had in a way you don’t understand. Is it fair? Probably not, however, there is always some truth on a joke. What is not a joke is making a slight decision when it comes to hiring an accountant. Choosing the right accountant is one of the most important decisions a small business can make. A good one can save you time, provide advice, and help your business grow; a bad one could cost you much needed money.
Finding the right accountant could be overwhelming, so here are so tips to help you choose the right accountant for your business.
Do your Research
This decision deserves all your time and attention. Do they have expertise in your industry? What license and degree(s) do they have? The best way to know if they are a good fit for you and your business is to interview them. You need to be comfortable with whomever you choose as you will be dealing with sensitive personal financial information. Make sure the accountant is available to answer questions with clear explanations. As with anything else in life, don’t automatically accept the first offer you receive. Arrange things in such a way that you can compare a selection of accountants with each other. Then it will be easier to determine which one is best for your business. Finally, check references, the ideal candidate might be right under your nose. Start by asking any friends or family members who own small businesses if they would recommend their accountant. If so, why? And if not, why not? The answers to both questions could prove useful at a later stage when you come to interview candidates.
What are your Needs?
Your decision on what qualifications to seek in an accountant must also take into consideration what services your business needs from an accountant. Maybe you only seek a firm to prepare your tax return and compile end-of-year financial statements. But if you also want tax and financial planning advice, or retirement planning advice, you may need to seek someone with different qualifications or background. Make a list of requirements that you would want the accountant to handle.
When is the best time?
Hiring an outside accountant or accounting firm on a consulting basis is a good first step for a growing business. The outside firm can often cost less than the salary and benefits of a full-time employee and, at the same time, you may be getting a higher level of advice from a CPA or a tax accountant, the latter of whom usually is a licensed CPA and a lawyer specializing in tax law.
Can your accountant help you save money?
Some accountants will do little more than manage your accounts and complete your tax return forms, but the best accountants are more proactive. So before choosing an accountant, ask what they could suggest to save your business money.
Always bear in mind that in most countries there is a big difference between tax avoidance (usually legal) and tax evasion (usually illegal). You need an accountant who knows the details of tax law so well that they’ll save you money in legal ways, but not one who takes things too far and risks causing your business to operate illegally.
Be very careful about this, because ultimately it’s you, the business owner, who’ll pay the penalty if the law is broken.
Good Accountants Will Help your Company Grow
If all of this sounds more like a marriage than a business relationship, there’s a good reason for that! Your accountant will become intimately involved with the operation of your company so it’s not a decision to be taken lightly. You will need one you can trust, who has the necessary experience and who will be there when you need them.
Good accountants help companies grow, by managing complex financial work and offering advice on practical business issues. This will be guaranteed to save you money in the short and long term. The best ones will be your partner in all but name – and as long as you choose wisely, you can’t go wrong.
Ask about fees upfront. Most accounting firms charge by the hour. However, there are some accountants who work on a monthly retainer. Figure out what services you are likely to need and which option will be more cost-effective for you. Get a range of quotes from different accountants. Try to get an estimate of the total annual charges based on the services you have discussed and don’t base your decision solely on cost.
Pro TIp: Since you will need an accountant for more than your crushing numbers, payroll and filing taxes, make the most of the accounting relationship by doing your part. Don’t hand your accountant a shoebox full of receipts. The better you maintain your records, the less time your accountant has to spend and the lower your fees will be.
Before you form a relationship with a trusted advisor to help guide your business through its growth phase and beyond, take some time to evaluate where you need assistance and then start meeting with some accountants to determine which would be the right fit you and your business. You can seek recommendations from other small business owners, preferably in an industry similar to yours. In fact, the best way to look for an accountant is by word-of-mouth. You don’t necessarily need to go to a big firm, either. Some of the best accountants have their own practices.
Vidal Espinosa, MBA is the Founder and Principal at Invictus Advisors, a bilingual consulting and accounting firm whose mission is to be a strategic partner for business owners to make better financial decisions. Managing a portfolio of over 100 clients, with total assets over $10,000,000 he has lead the organization to open multiple offices throughout the United States and Mexico, increased their annual budget from $25,000 per year to over half a million dollars per year and tripled their office space. As a self-made author, entrepreneur and business owner he understands what it takes to start and run a business effectively.