While pretty much every accountant can crunch numbers, accounting firms are not all the same. Tax codes change all the time, and small business owners often find themselves stumped when the time comes to sell commercial property or claim deductions. Accounting firms vary by far more than their fees and size and picking the wrong one could have you missing out on benefits you could be entitled to or even open you up to prosecution. Here are four things to consider when hiring an accounting firm for your small business.
Many accounting firms specialize in a particular industry or area, in order to offer better service and distinguish themselves from the competition. If you’re running a retail business, work with a retail accountant. Conversely, that retail accountant may not be of much use to someone running a commercial farm.
Another consideration is the type of advice you may seek from the accounting firm. The average bookkeeper isn’t qualified to give you financial planning advice. Tax preparation firms generally hire and train tax preparers, but they can’t give you in-depth advice except in the area of tax planning. Take the time to learn what advice firms are willing and able to provide. Some accounting firms will be happy to generate financial reports but provide little feedback. If you need a lender who can help you to grow your business, look for an accountant who will help you to secure financing by cleaning up your books and improving how you look to lenders.
Some accountants are willing to help clients set personal and business financial goals and monitor progress toward them, though you may be charged an extra fee for the service. If you need in-depth financial counseling, seek an accounting firm that includes that as part of their services, and ideally, doesn’t charge you extra for it.
Some accounting firms charge by the task, such as charging a fee for each income tax filing or each profit and loss statement generated. Other firms bill you by the hour, and every phone call you make to the accountant will end up costing you. Consider everything you want the firm to do now and in the near future, and then compare the overall bill you’d pay to each firm on your short list.
In some cases, you can save money by going with a full-service accounting firm. A full-service accounting firm will employ bookkeepers who handle the day to day transactions of their clients. Accounting firms that don’t have bookkeepers on staff will probably hand that work off to a CPA who charges more for the service.
Some accounting firms will only meet with you once a year as you’re filing your taxes. Others will talk to their clients whenever they have a question. If you expect to call your accountant for business advice, especially in the middle of business deals, you need an accountant who is available when you want them. Find out, too, if the accountant is willing to accept phone calls on your schedule or requires you to make an appointment.
Ask what they’ll do when there is an audit. Some accounting firms will let you meet with tax authorities in their offices while providing an accountant to represent you whenever it is necessary.
The reputation and their price don’t matter if you’re not comfortable discussing your finances or your business plans with your accountant. If the accountant won’t talk to you at your level or doesn’t understand you, go somewhere else. If you feel intimidated by the accountant, look for a different firm.
Whether you’re looking for a tax preparer or a bookkeeper, you need to take the time to vet each candidate you’re considering. Take the right factors into account, and you’ll be able to find the right accounting firm for your small business.