Establishing your very own small business can be both rewarding and challenging. A significant part of running a business is handling your finances properly, which is why it pays to have another set of eyes that can help you manage your financial responsibilities. In fact, a 2019 Small Business and Finance Report from Forbes reveals that 87% of small business owners treat their accountants as trusted overall advisors. Because having a competent accountant makes a big difference in your business, hiring one is a decision you should take seriously. Here are three things to consider when choosing an accountant.
Know what you need
Before choosing an accountant, you first have to determine the workload and responsibilities you need your accountant to handle for your business. In that way, you can decide whether you will hire an in-house accountant or outsource the job to a firm, such as PEAR Accounting Solutions. Hiring an outside accountant can be a good first step for a new business, as it costs less than the salary and benefits of a full-time in-house accountant. Usually, an outside accountant solves problems within your business and prepares your tax returns and financial statements. As highlighted in An Introduction to the Balance Sheet, these financial statements, like income statements and balance sheets, are important, since they allow owners to monitor the overall health of their venture and make informed data-driven decisions from there. On the other hand, as your business grows and the transactions become more complex, the cost of hiring an outside accountant can vary. By then, it could be better for you to consider an accountant on your team. Their responsibilities would include daily transaction monitoring, payroll and fixed asset accounting, and treasury and cash management. So, knowing what your business needs is an important step before choosing an accountant, as it helps you plan accordingly.
Hire one with the proper credentials
Once you proceed with the hiring process, make sure that you choose an accountant with the proper credentials. Being the owner of the business, you have the final say, and hiring a qualified and experienced accountant will benefit you greatly. A strong financial background is key, and many would point you towards hiring a Certified Public Accountant (CPA) for this. But non-CPA accounting graduates and accountants with several years of experience can offer a wealth of expertise to your operations. This is because accounting graduates have a strong foundation in business knowledge and financial skills that can help you not just with bookkeeping and financial reporting, but with business strategy, risk management, business law, and economics. Moreover, Maryville University’s overview of online accounting programs today points out that the curricula undertaken by graduates are shaped by industry leaders to prepare students for present and future business challenges, which can bring about ethical and analytical financial change to your business. Do not be afraid to be selective during the process! You may also want to look for someone who has experience working with small businesses and even your industry because they are more accustomed to making the right financial decisions for companies like yours. Just look at our own Amber Leon: She initially took a course on tax preparation to build her skills in bookkeeping and data entry for tax preparation. Years later, she obtained associate's and bachelor's degrees in accounting, all while working full-time at a local CPA firm. Her experience and knowledge in the field of accounting led her to start her own company, and her clients sing nothing but praises!
Always compare fees
Since a universal method accountants use for charging businesses does not exist, make sure you carefully compare the fees your applicants are proposing. There are different factors that would affect their fees, like the quality and type of services provided and the qualifications of the accountant. Some accountants charge hourly or monthly, while others charge by a percentage of your turnover. Small Business Cost Helper notes the varying typical costs, which depend on the service and the type of business involved.
Given that your business is just growing, you have to know how much you will spend on accounting services. Depending on your cash flow, you will see how much negotiating you have to do to pay for the services you need and deserve. Just be sure you have the figures to back up your final decision.
You worked hard to build your business, so make sure you maintain that level of passion by selecting and fostering relationships with professionals with whom you can share — and build on — your success.