If you’ve just spent weeks puzzling over all of the IRS forms and guidelines and still feel like you barely know the difference between a 1040 and a 1099, it may be time to admit defeat and hire an accountant to handle all your paperwork for next tax season. But how can you choose a qualified, reliable, and affordable accounting professional to handle all of your business’ confidential financial data? Here are a few ways to go about it.
1) Find out who your peers are using - You probably belong to a few trade groups or business associations. Next time you get together, pick the brains of your associates to find out what firms they use for accounting services. You’ll want to find an accountant with significant experience working with businesses in similar industries to yours, so they’ll be familiar with your business expenses, deductions, and financial challenges. And if your friend has had a positive experience with the accountant for years, that’s a big bonus, of course.
2) Look for specialized certifications - To work as an accountant, an individual only needs a college degree in accounting, finance, or a related field. But you’ll generally want someone with at least a certified public account (CPA) credential to handle your account. CPAs are required to pass a rigorous test, and often must have two years of supervised experience in accounting before opening a practice. As your company grows, you might consider hiring a Certified Management Accountant (CMA), who is trained to handle more complex issues like compliance and financial analysis.
3) Find out how well their skills meet your needs - Once you’ve gotten a few referrals for accountants who you think might meet your needs, set up individual interviews with each of them. Most accountants are willing to offer a free initial visit: If all goes well, this will become a long-standing professional relationship, so it’s in everyone’s best interest to start it off on the right foot. In your introductory meeting, ask questions regarding the types of services they provide to small businesses, their knowledge of your industry, and how they will help you as you grow. If an accountant doesn’t give you confidence that he understands the financial regulations and accounting requirements of your particular industry and its challenges, keep looking.
4) Don’t forget to ask about the bill - Money can sometimes be a sensitive subject, especially for small businesses, but don’t be afraid to ask directly about your accountant’s fees and payment schedule. Many accountants have monthly retainers for financial statement preparation, and will charge by the hour for other services. CostHelper reports that accountants typically bill anywhere from $150 to $400 an hour; independent accountants in small towns are likely to be on the lower end of the scale, while big-city firms will be on the upper end. If your potential accountant’s cost seems too high for you to justify, ask what you can do to prepare materials in advance to cut down on the time he needs to bill you. Don’t focus too much on the dollar signs, though: Your accounting services are tax-deductible, and a good accountant will often save you thousands in deductions that you didn’t realize you could take — so it’s often worth paying a bit extra for a high-quality professional.Kathryn Hawkins is a writer and editorial consultant who has worked with publications including Inc. and GOOD Magazine. She is principal and content strategy lead at the Maine custom content and web development agency Hawkins Multimedia. View all posts by Kathryn Hawkins This entry was posted in Money, Taxes and tagged accounting, small business accounting. Bookmark the permalink.