A business accountant examines your company’s finances and prepares financial reports. Their job is to make sure your data is correct and your taxes are paid correctly and on time. Some may also provide bookkeeping services. According to the Service Corps of Retired Executives (SCORE), a nonprofit organization that provides free consultation and guidance to entrepreneurs, your accountant can do several things for you:
Identify every tax deduction you’re entitled to take.
Recognize problems (such as disappearing inventory, increased costs for products or equipment, or customers who aren’t paying on time) before they have a chance to bring down your business.
Maintain your cash flow at acceptable levels.
Point out potential areas of growth by analyzing pricing, cash flow patterns, inventory management and types of business financing.
Put together the financial reports you need to get loans and investment.
Prepare your tax returns quickly and accurately.
But how exactly do you find the right accountant for you? Here are some questions to ask and places to look when choosing a good accountant for your small business.
What do you need your accountant to do?
The first step in choosing an accountant is to determine what you want yours to do for you. Some accountants are willing to do bookkeeping, while others focus on broader business tasks. If you are looking for a bookkeeper to handle the mundane daily or weekly bookkeeping duties as well as an accountant, you’ll want to look for an accounting firm that provides both services.
If you maintain your own books, find an accountant who will work for you periodically (weekly, monthly or quarterly), produce statements and evaluate the health of your business. A good accountant should be involved in your business on a regular basis, not just at tax time, and they can significantly add to your bottom line by setting up and structuring your plans and operations efficiently. [Read related article: What’s the Difference Between Accountants and Bookkeepers?]
Should you hire an accountant for your business?
If you need help setting up your accounting system, maintaining financial documents, auditing your business’s books or financial statements, or creating financial goals for your company, you should hire an accountant.
Even if you have the best accounting software, it can be complicated, it can be complicated and confusing to manage your business’s finances when you don’t have a background in business accounting. Just sifting through payroll and bookkeeping processes can be overwhelming, said John Cordano, ChFC, CLU and financial advisor with California Financial Advisors.
“There can be a lot of loopholes that you’re not going to be aware of, especially with tax laws changing,” Cordano told Business News Daily.
Working with an accounting professional who understands tax laws and bookkeeping is your best option, especially when compliance is at stake. Accountants can also guide your small business in more profitable directions that give you “the biggest tax bang for your buck,” Cordano said.