Do you ever wonder why so many promising startups fizzle out? Believe it or not, a whopping 82% of small businesses fail due to cash flow issues, according to Score.
How can you ensure your small business thrives? One step is finding a good accountant. This article talks about how to find the perfect accountant to safeguard your small business' future.
What Are the Benefits of Hiring a Professional Accountant?
Understanding the Financial Health of Your Business
A good accountant helps you get a clear picture of your financial status. They track your income, expenses, and business finances, ensuring you know exactly where your money goes.
This insight is essential for making informed decisions that drive growth and profitability. They also use accounting software to provide real-time financial information, helping you stay on top of your business's financial health.
Ensuring Compliance with Tax Laws and Regulations
Tax laws are complex and constantly changing. A professional accountant ensures your business complies with all relevant tax regulations, helping you avoid costly fines and legal issues.
They keep up-to-date with IRS requirements and handle all the paperwork, so you don’t have to worry about missing deadlines or filing errors. An accountant can help you with tax preparation and filing, ensuring that your federal tax returns are accurate and submitted on time.
Providing Valuable Financial Advice and Planning
Accountants do more than just crunch numbers. They offer strategic tax advice tailored to your business needs. Whether it's optimizing your cash flow, planning for expansion, or preparing for another tax year, their expertise can guide you.
They can help you make smart financial moves that align with your long-term goals. They can also identify relevant tax deductions and credits, maximizing your tax savings and helping plan to reduce your tax liability.
How to Find a Good Accountant for Your Small Business?
Certified Public Accountant (CPA) Credentials
CPAs have passed rigorous exams and met all state boards of accountancy licensing requirements, making them highly qualified. Hiring a CPA ensures you get someone with verified expertise and a commitment to maintaining their professional conduct requirements.
They are equipped to handle complicated tax situations and provide comprehensive accounting services. When searching for an accountant, finding a good CPA who can handle your specific needs is essential.
Experience with Small Businesses in Your Industry
An accountant who understands your industry's unique challenges and opportunities can provide more relevant and effective advice. They can identify industry-specific tax deductions and help streamline your financial processes based on what works best for businesses like yours.
Look for someone with experience in small business accounting and business tax preparation. This experience is vital for managing your business expenses effectively.
Knowledge of Current Tax Laws and Accounting Standards
Tax laws and accounting standards are always evolving. Your accountant should be well-versed in the latest updates to ensure your business remains compliant and takes advantage of any new tax benefits or changes that apply to you.
An accountant can help you navigate tax forms and documents, ensuring your tax filing accuracy. They should also be knowledgeable about the Annual Filing Season Program and e-file processes to get your taxes done efficiently.
Further reading: What You Should Know About Small Business Accounting, Tax, And Bookkeeping Services
Where to Search for a Reputable Accountant?
Recommendations from Business Networks and Peers
Ask fellow business owners or industry contacts for recommendations. Personal referrals are often the most reliable way to find a trustworthy accountant because you get first-hand insights into their experience and reliability.
They can share tips for finding the right accountant and advise who can best handle your business’s tax needs. Networking can be a valuable tool when trying to find a good CPA.
Professional Associations and Directories
Look for accountants through professional organizations like the American Institute of CPAs (AICPA) or your local chamber of commerce. These organizations often have directories of qualified professionals who adhere to high ethical standards.
Membership in a professional organization is a good indicator of an accountant’s commitment to their profession. Utilize online tax directories and resources to find a qualified tax expert.
Online Reviews and Testimonials
Check online platforms like Yelp, Google Reviews, and LinkedIn. Reviews can give you a sense of other clients’ experiences and help you gauge an accountant’s reputation.
Pay attention to feedback about their responsiveness, expertise, and the value they provide. This can help you choose an accountant who meets your needs and expectations.
Key Question #1: What Services Do They Offer?
Tax Preparation and Planning
Ask if they handle all aspects of tax preparation, including federal tax returns, state taxes, and sales tax. Inquire about their strategies for tax planning and minimizing tax liability.
Ensure they stay updated with the latest tax laws and IRS regulations, which can significantly impact your tax savings. Also, check if they have a Preparer Tax Identification Number (PTIN), as the IRS requires this for anyone preparing or assisting in preparing federal tax returns.
Bookkeeping and Financial Reporting
Find out if they offer bookkeeping services and how they manage financial reporting. Regular, accurate financial reports are essential for understanding your business’s financial health.
Ensure they use reliable accounting software to keep your books organized and up-to-date. Small businesses don’t need to struggle with bookkeeping when they can hire an accountant to assist with these tasks.
Further reading: Small Business Accounting: Best Accounting Software for Small Business
Business Consulting and Strategic Planning
A good accountant does more than just manage numbers. Ask if they provide business consulting and strategic planning services. This includes helping you with financial forecasting, creating a business plan, and identifying growth opportunities. Their advisory role can be significant for your business’s long-term success.
Key Question #2: How Do They Communicate with Clients?
Frequency of Meetings and Updates
Clarify how often they will meet with you to discuss your financial situation. Regular monthly or quarterly meetings help keep you informed and allow for timely adjustments to your business strategy. Make sure their schedule aligns with your needs. The accountant you’re considering should be proactive in scheduling these sessions.
Preferred Communication Channels (Email, Phone, In-Person)
Find out how they prefer to communicate. Some accountants may favor email for quick updates, while others prefer phone calls or in-person meetings for more detailed discussions. Choose an accountant whose communication style matches yours to ensure smooth interactions.
How Can You Foster a Productive Relationship?
Regularly Review Financial Statements Together
Set up regular meetings to go over your financial statements. This helps you stay on top of your financial health and lets your accountant provide timely advice. Understanding your financial reports is vital for making informed business decisions. This practice is especially important if you must prepare tax returns accurately and on time.
Set Clear Goals and Expectations
Be upfront about your business goals and what you expect from your accountant. Whether it’s optimizing tax deductions, improving cash flow, or preparing for an audit, clear communication ensures that you’re both on the same page. This is vital for both your business and personal taxes.
Stay Organized and Provide Timely Information
Keep your financial documents, tax forms, and receipts well-organized. Providing your accountant with timely and accurate information enables them to work more efficiently and effectively.
This also helps avoid last-minute scrambles during tax season or when it’s time to file your taxes. Remember, the IRS requires accurate records for compliance and audits. An enrolled agent or CPA can help you stay organized and compliant.
Key Takeaways
- Check Qualifications: Ensure the accountant is certified and has passed the CPA exam, essential for any small business owner.
- Seek Recommendations: Ask other small business owners for referrals to learn how to find a reliable CPA.
- Interview Candidates: Conduct interviews to ask about tax services and their approach to working with an accountant.
- Assess Compatibility: Choose someone who understands your business starts and needs, whether they work on a monthly retainer or charge by the hour.
- Evaluate Fees: Compare fees based on the complexity of your needs to get free estimates from independent CPAs.
- Flexibility: Consider finding a CPA who can work with an independent mindset, offering flexible solutions tailored to your business needs.
How can Taxfyle help?
Finding an accountant to manage your bookkeeping and file taxes is a big decision. Luckily, you don't have to handle the search on your own.
At Taxfyle, we connect small businesses with licensed, experienced CPAs or EAs in the US. We handle the hard part of finding the right tax professional by matching you with a Pro who has the right experience to meet your unique needs and will manage your bookkeeping and file taxes for you
