Small Business Guide: Choosing an Accountant

Well, it depends. There are more than a few small businesses that get by with just a bookkeeper, or even just someone with a basic knowledge of bookkeeping software. Those businesses are only looking for someone to crunch numbers and fill out a few forms. So, how do you know if you need an accountant? It comes down to the particular services he or she offers, and keep in mind, not all accountants offer exactly the same services.

What does an accountant do?

Accountants analyze. They process all those numbers and details you give them into useable information about your business. They can offer predictions and advise you on how to meet goals. A good accountant should basically double up as a business consultant with a lot of numbers and examples.

From a small business stand point, there are a few services you will require.

Personal Financial Advice: As a small business owner, it’s practically guaranteed that your personal finances will be intertwined with your business’ finances. Look for an accountant that can advise you about topics like planning for retirement.

Tax Planning: April isn’t the only month to worry about your taxes. As a small business owner, you should be working with an accountant who can advise you how to keep taxes down for your business.

Audits: Even business owners with no accounting problems get audited. A good accountant will stay with you and hold your hand through most of the procedures. Furthermore, many accountants work for the IRS as part of their training and have a good understanding of the inner workings of that system.

Does my accountant have to be a CPA?

Absolutely. There are more than a few accountants and bookkeepers that set up shop without any kind of certification. They may be a little cheaper, but if they screw up, you are responsible. So, for instance, if your uncertified accountant gives you the wrong tax information, the IRS will be talking to you instead of the accountant. Certified Public Accountants are held to high standards, making them a safer bet for your small business. You can check with organizations like the American Institute of Certified Public Accountants (http://www.aicpa.org/) or the Association of Chartered Certified Accountants (http://www.accaglobal.com/) if you need more help locating a CPA in your area (the ACCA will be more help if you operate outside of the U.S.).

Choose the right accountant the first time around.

Accountants have to develop detailed knowledge of your business in order to their job. However, this makes the move to a new accountant much harder. It’s worthwhile to spend a lot of time making sure an accountant is right for you. Don’t be afraid to ask your prospective accountant for a preliminary interview. Ask where he or she went to school, if they participate in continuing education and if they have partners or assistants that help out during tax season.

Good accountants will have references and good standing with the local Better Business Bureau and Chamber of Commerce. You should also make sure you are personally comfortable with your new accountant; this person will have access to all your financial records.