Six Factors to Consider When Hiring an Accountant
Entrepreneurs have the option of hiring a full time accountant as an employee, or outsourcing the accounting function. There are those who are in the habit of hiring an accountant at the end of the year when they need to submit their tax returns. Determination of whether you need to hire an accountant on a full time basis really depends on the size of your business. Sole proprietorships and small businesses may find that it is more cost effective to outsource the accounting function or hire when the need arises. However, as the business grows the need for a full time in-house accountant increases.
There are a number of factors to consider when hiring an accountant whether full time or otherwise. These are:
1. Qualifications and experience – Always insist on hiring a Certified Public Accountant (CPA). A CPA designation is proof of expert knowledge in accounting. A CPA has passed examinations administered by the American Institute of Certified Public Accountants (AICPA) and state administered examinations. The CPA should also hold a license to practice in the respective state and must engage in continuing education to maintain the license.
2. Reputation – Qualifications and experience are never enough when gauging the suitability of a potential accountant. There exist numerous qualified accountants who have very poor reputations. It is always good to ask the accountant for references with whom you can verify the quality of their services. It is now possible to hire an accountant from online market places such Elance.com, Guru.com, Odesk.com and others. The advantage with such websites is that you can immediately confirm the accountant's reputation from the feedback they have received from past clients.
3. Word of mouth recommendation – A recommendation from a friend or family is an excellent way to help you identify an accountant. However, recommendations should be verified.
4. Specialization – Some accountants only specialize in certain accounting aspects, for example, taxes or credit control. It important to verify that the accountant has practical experience in all accounting aspects.
5. Fees – Accountants base their fees on a number of factors such as the type of services required, the time required to perform the services, the level of expertise and experience required, and the complexity of the work. Some accountants charge an hourly based fee for some services, task based pricing for others and even fixed fee basis. At the end of the day you should go for the best rate with reference to all the other stated factors; the one who gives the best value for your money.
6. Geographic proximity – Most accounting functions tend to be biased towards hiring an accountant within close geographic proximity. To locate an accountant, research would start in the yellow pages or the business directory of the phone book. Accountants are normally listed under, "Accounting and Bookkeeping." There is also the online business directory which also has the advantage of feedback.
As a general rule, always remember to ask your potential accountant the following questions:
1. Are you a CPA?
2. What creative business advice will you offer?
3. Are you technologically up to date?
4. Who are your clients?
With those four questions you are unlikely to select the wrong person for the job.
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