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Finding the Right Accountant for Your Small Business

Simone Johnson
Simone Johnson

Learn how to choose an accountant who has the skills your business needs.

  • An accountant can help you set up an accounting system, maintain financial documents, audit your books and create financial goals for your business.
  • They should review your business financials regularly, not just at tax time.
  • Look for an accountant who has the proper credentials and a good understanding of tax laws, accounting software, and business management. 

Managing your company's finances can be difficult if you aren't familiar with debits, credits and recording transactions, but who says you have to go it alone? An accountant can provide the financial expertise and guidance you need to run your business effectively. 

Although hiring an accountant is optional, it can be a big help to have one when it comes to reviewing financial records and filing taxes. The advice that an experienced business accountant has to offer your company might just be the difference between success and failure, and their expertise can help guide your decisions as your business grows.

 

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What does a business accountant do?

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 good accounting software, 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. [Read related article: When Should You Hire a CPA?]

Do you need an accountant if you're self-employed?

Yes, says Cordano. "Maybe it's not as complex as a small business that has 10 to 15 employees, but if someone is self-employed, there may be specific advantages and expenses you may be able to take advantage of." 

Even if you are a one-man band, consulting with an accountant who understands business taxes and tax planning for small business is useful, because they can identify what deductions your business is eligible for and what to avoid. They can also provide insight and advice to help you save money for retirement, which can be challenging for sole proprietors if they don't know their options.

How do you find a business accountant?

Once you know what you want from your accountant, you can look for candidates. Joshua Dubrow, of the New York State Society of CPAs' Small Business Outreach Committee, said that many people's first instinct when looking for an accountant is to turn to the internet. But he warned against just picking someone you find on Google or an online directory. 

"You're looking for someone that's going to help you financially, not only with taxes but to help your business grow, so you really need to meet with someone face-to-face," Dubrow said. 

A recognized and reliable source where you can look for an accountant is the American Institute of Certified Public Accountants (AICPA), which has a license verification directory of CPAs. Chartered accountants tend to do commercial work within corporations, rather than doing public practice work for other entities. You can also check out the Accounting & Financial Women's Alliance if you'd prefer to work with a female accountant. 

You can seek recommendations from other small business owners, preferably in an industry like yours. In fact, Dubrow noted that the best way to look for an accountant is by word of mouth. You don't necessarily need to go to a big firm – some of the best accountants have their own practices.

What qualifications should you look for in an accountant?

The qualifications vary by the type of accountant you need. An accounting clerk must have at least a high school diploma and on-the-job training. An accountant must have a bachelor's degree in accounting. A CPA must have an accounting degree and additional certifications. 

Look for an accountant who has a good understanding of tax laws, accounting software and business management. When interviewing an accountant, pay attention to their communication skills and how they explain information to you. Sometimes an accountant will have to decipher documents and information for you, so it's important that they're able to communicate clearly. Crunching numbers is important, but the ability to propose cost-cutting solutions is valuable too.

How do you evaluate an accountant?

Just as you would not hire an employee without an interview and a careful analysis of their resume, practice due diligence in your choice of accountant. Do a background check on the accounting firm and ask for client references, Cordano said. Also, make sure that your candidates are certified. Look them up online to see if there are any regulatory complaints or marks on their record. 

If everything checks out, arrange a meeting to discuss who you are, what you want to do, what steps you have already taken and your goals, Cordano said. Ask the CPAs if they have experience and expertise working with a business in your specific field. Also ask how readily available your accountant is going to be, how much time they will dedicate to you, and whether the work will be done at your place of business or the accountant's. 

You want your prospective accountant to be able to offer financial advice and ask you the right questions as well. One way to gauge this is to simply ask the candidate if they have any questions about your business. If they don't, find another candidate. You need to know how proactive the accountant will be. It is their job to be up in your business (literally and figuratively). The more involved they are, the better value you will get from their services, helping you save money and grow your business.

How much does it cost to hire a business accountant?

Every business is different, so there is no easy answer as to how much an accountant and their services should cost. Prices vary by region and locale, as well as whether you choose a regular accountant or a CPA. 

If you plan on hiring a staff accountant, you should know the median salary is $70,500 per year ($33.89 an hour), according to the U.S. Bureau of Labor Statistics

If you work with an accounting firm or independent accountant, most charge $100 to $275 per hour. If price is a major concern, you may be able to negotiate a flat fee to keep the accountant's services on retainer. 

Marci Martin and Adam Uzialko contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.

Simone Johnson
Simone Johnson,
Business News Daily Writer
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Simone R. Johnson was born and raised in New York City. She graduated from the University of Rochester in 2017 with a dual degree in English language media and communications and film media production. She has been a reporter for several New York publications prior to joining Business News Daily and business.com as a full-time staff writer. When she isn't writing, she enjoys community enrichment projects that serve disadvantaged groups and rereading her favorite novels.