Choosing an Accountant for Your Business: 5 Things to Keep in Mind

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choosing an accountant

Choosing the right accountant for your business is like choosing a new business partner. This person will be there to handle one of the most important assets of your business: your finances. Most small businesses invest in an accountant—either hiring a “numbers person” on staff, or hiring accounting services when their financial challenges grow too large to handle without expert help. 

Are you having trouble switching from cash to accrual accounting? Are your financial statements inaccurate or missing something? These are all good reasons to start looking for a Certified Public Accountant (CPA). Here’s how to choose the right accountant for your business.

Choosing an Accountant: Hiring a Firm Versus an Inside Accountant

Most new businesses owners start out wearing many hats in their role as entrepreneur––including an accountant’s hat. Quickbooks, Quicken, and Microsoft Office Small Business Account bookkeeping softwares make it easy and convenient for businesses owners to access their finances and monitor important components such as cash flow. However, as quick and easy as these softwares make handling finances, there comes a time where it makes sense to hire an expert to take over your taxes, accounting, and the rest of the financial functions of your business. 

When Is It Time to Hire an Accountant?

Many small businesses don’t have the volume of financial transactions that require a full-time bookkeeper or accountant. Still, hiring an outside accountant or accounting firm is a good first step for any growing business––they can help you navigate business decisions such as purchasing additional office space or hiring new employees. They’ll pay attention to every little detail such as payroll, tax management and preparation, and property tax––to name a few. 

Even with the latest accounting software, it still may be easier to hand over your tax forms, invoices, and receipts to a CPA firm that can manage your books online securely rather than in-house. So, should you hire someone in-house, or reach out to a CPA firm? 

Hiring a CPA Firm

An accounting firm typically handles the following accounting functions: 

  • Financial statements, including the income statement, statement of cash, and the balance sheet
  • Tax return management and preparation
  • Analysis and problem-solving advice

Keep in mind, an accounting firm will offer an hourly rate schedule depending on the level of complexity they’ll be dealing with, and the expertise of the person who is performing the tasks. A good tax expert should save your company money over their own fees.

Hiring an Inside Accountant

The responsibilities and duties of an inside accountant typically include: 

  • Responsibility of daily transactions
  • Treasury and cash management 
  • Financial statement preparation and analysis
  • Payroll and fixed asset accounting

When your business grows and transactions become more complicated to file, it’s important to consider bringing a full or part-time accountant onto your staff. Hiring an accountant in-house can save you money––as fees with an accounting firm will grow as your business grows. 

Key Qualifications for Accountants: Skills to Look for

After you figure out whether you’ll hire an inside or outside accountant, you need to figure out what skills you want your accountant to possess before you begin your search. A non-certified accountant may be just what your business needs to handle financial statements, analysis, and bookkeeping. However, when it comes to tax preparation, business owners usually look for someone with certification and licensure. Here are a few key skills to look out for when choosing an accountant.

Certifications. A CPA has an undergraduate degree and has met and exceeded exam requirements for state certification. In order to remain certified and licensed, a CPA must take continuing education courses. A Certified Management Accountant (CMA) is trained to meet the demands of today’s accounting requirements in addition to participating on a business’ management team. As with a CPA, a CMA must pass an exam, have business expertise, and take continuing education courses. 

Size. Choosing an accounting firm can be daunting––there are a lot to choose from. Some businesses feel more at ease choosing a large, name-brand firm. While larger firms seem more attractive, sometimes a smaller firm is a better fit. Working one-on-one with a smaller firm can be less intimidating and more personal than linking arms with a large firm. Keep in mind that large firms will sometimes contract work out to smaller firms––so make sure you know who is handling your business’ account.

Expertise. Some firms specialize in specific industries such as auto dealers, construction contractors, and nonprofits. If possible, try to choose an accounting firm that meets your industry’s specific needs. 

Finding a Referral

Before you choose an accounting partner––ask around. Find out who and/or which firms your friends and colleagues are using. Word of mouth is a great way to identify trustworthy candidates for your business. Oftentimes, accounting partners are more than just business partners––they’re family counselors, priests, and friends, involved in many aspects of business owners’ lives. 

Check References

An accounting partner will have access to your company’s books, records, and other proprietary information––make sure you avoid making a serious hiring mistake. It’s important that you take the time to check references of your individual candidates. Check if they have experience in your industry, your size of establishment, and software expertise. 

Choosing an accountant is an important step for your business because it means business growth, and the need for improved management reporting. Many companies wait too long to make this crucial business decision––resulting in sloppy and inaccurate financial reports. 

Your speciality is running your business––leave the financial details to our financial experts. Contact Banks, Finley, White & Co. for more financial advice.