How to Find the Right Accountant for You
Starting your own business can be an exciting adventure full of possibilities. Although some of the things you do to keep your business running are interesting, the day-to-day tasks like bookkeeping and business strategy are often not very exciting. However, the realization that you have to figure out all of the financial details for yourself can be overwhelming, and you might start looking around for help.
Most of us know that having an accountant or certified public accountant is a great idea—not only is someone helping you manage cash flow, make strategic decisions and prepare your taxes, but you also have a sounding board to help you work through issues as they arise. It’s essential to do your research and ask the right questions to know that the person you’re working with has the skills and certifications needed to keep your business running smoothly.
Listen to this week’s episode of the rich & REGULAR podcast and keep reading for things to consider as you search for an accountant.
Accountant vs. CPA
Even the process of finding an accountant can be intimidating. Asking people for recommendations is usually a good idea, but finding a reputable place can be challenging if you’re starting from scratch. Start by understanding the difference between CPAs and accountants.
CPAs: Certified public accountants are licensed and have met the educational requirements to obtain and maintain that license. CPAs are also held to a strict ethical code that requires them to exercise objectivity and due care, and put public interest first. You can search for a CPA through the American Institute of Certified Public Accountants (AICPA) or your state’s chapter of AICPA.
Hiring a CPA may be more expensive up front, but you’ll get peace of mind knowing that this person has the required licensure and educational experience to help your business grow, look for tax savings and offer advice for the coming year.
Accountant: General accountants can generate tax returns and create some types of financial statements. However, accountants are not required to be licensed, and while they most likely have a financial background, there isn’t a centralized place for you to confirm credentials. Remember that since there isn’t a standardized governing body to check against, you need to do your due diligence and ensure that you’re working with someone knowledgeable and trustworthy.
Determine what your business needs
As you think about bringing in a CPA or accountant, brainstorm your business needs. Are you just starting and could use some help setting up your company with the secretary of state? Or are you established but need someone to help with your taxes and act as a sounding board when issues crop up?
Be honest about your business needs and what your cash flow looks like. You might feel like you’d love to hand over your books to a CPA completely so you can concentrate on the fun and creative side of running your business. If your cash flow doesn’t justify that quite yet, make a plan for the things you need help with now, and keep a list of the nice “to haves” for the future.
Once you’ve researched your list of candidates, schedule an initial visit with each one. Develop a list of questions to ask each candidate and take notes on their answers. This may feel like a lot of upfront work when you are looking for someone to help take away some stress, but remember that you’re putting at least part of your business in their hands, and you want to trust that they know what they’re talking about and that you can work together effectively.
Develop a list of questions to help you compare answers. A good place to start might be:
- What records should I keep?
- What software do you use?
- How do I prepare for tax season?
- Do I need to pay, or when should I pay estimated taxes?
- What business expenses are deductible?
- How can I better manage cash flow?
- What do you think will help my business grow?
- What is your preferred working method? (Email, phone calls, weekly check-ins, quarterly, etc.)
Trust your instincts
If something feels off during an interview, trust your gut feelings. While it can be awkward for both parties to meet for the first time, you need to be comfortable with the professional you’ve chosen to help with your business. Ideally, you’ll have a long, productive relationship as they help you grow your business, so you want to make sure you’re on the same page.
Finding an accountant doesn’t have to be intimidating, but it is essential to do your homework and trust the person you’re working with. Don’t become stuck in analysis paralysis, but do ensure that you’re checking on credentials and looking for red flags before handing over your financial information.
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