If you are like most small business owners, you do not have enough financial transactions to require a full-time bookkeeper or accountant on staff. However, don’t get caught in the bad habit that some entrepreneurs fall into of stashing all sales invoices, bank statements, and expense receipts in a shoebox and shoving it into the hands of a tax preparer at the end of the year.
Rather, your current financial situation should be available for review at any given moment. That means having all your financial transactions processed into ledgers and journals on a regular basis. If you are not doing it yourself, you need to know how to hire an accountant to suite your business accounting needs.
Ask Other Small Business Owners
Word of mouth recommendations are always a great way of finding an accountant. Ask your business colleagues or other small business network contacts how they utilize a business accountant. Do they hire a bookkeeper? A CPA? Perhaps a part-time employee? Find out what works for other small businesses.
Bookkeeper, CPA, or Tax Attorney?
In your quest to hire an accountant, consider the pros and cons of using a bookkeeper, a CPA, or a Tax Attorney. Bookkeepers are generally schooled and trained in processing financial transactions and can save a bundle of money on most of your business accounting needs.
CPAs have at least an undergraduate, although most have graduate degrees, in business accounting and are licensed by the state to practice public accounting. They can be a one-stop place to record your business transactions, prepare and file tax returns, and offer sound financial strategies and advice.
Tax attorneys are generally CPAs as well, but they have the additional training of a law degree specializing in U.S. tax law. A tax attorney will be one of the best resources for tax preparation and business accounting, but they will be charging fees similar to any attorney. Expect to pay $175 to $200 an hour or more for their services.
You might find that a combination of these could work great for your small business accounting needs. For instance, you might hire a contract bookkeeper to do all your regular processing and recording of financial transactions, check writing, and bank reconciliation. Then hire a tax attorney to prepare your business taxes at tax time.
Look for Quality Accounting Software
Whomever you choose, make sure that your business accountant uses dependable accounting software to process your financial information. An outside business accountant should be able to pull up your financial information quickly and easily and provide quality, easy-to-read financial statements.
It is always best practice to have your own accounting software for your small business, such popular programs like Peachtree or QuickBooks. If you do, then be sure your bookkeeper or accountant uses the same software so you can easily import and export data to and from your own computer.
Finding an accountant for your small business doesn’t have to be a chore. However, when you do hire an accountant, you need to be sure you get quality work at an affordable price.