One of the key elements to managing your small business finances is handling your taxes. For most bookkeeping tasks and daily business accounting needs, you can use cloud accounting software. Accounting platforms allow small business owners to manage their books themselves because they’re easy to use and access. When it comes to managing your taxes and certain other financial tasks, however, oftentimes it’s better to outsource them to a professional accountant. Hiring a small business accountant should be a carefully planned process to ensure you’ll be working with someone with the appropriate experience.
The thing about tax preparation, particularly for a business, is that accuracy is critical across every aspect of the job. Discrepancies in your paperwork could cause you to be audited or pay a fine. Either way, it’s costing you time or money. Work to hire an accountant who will provide a thoughtful level of attention to your needs.
Before you hire a small business accountant, do your homework. Don’t just hire the first person who pops up during an online search. Instead, find a handful of candidates who seem like a good fit and interview them. Treat this process just as you would when hiring an employee.
The key to hiring an accountant for your business is to ask the right questions. Here are 10 of them to help you get started.
1. How much do you charge?
First, you need to know if you can afford the accountant’s services. If you can’t, there’s not much else to discuss, and you can move on. If they are within your budget, ask how they charge: by the hour, monthly retainer, etc. It’s important to know what your costs will be, as well as when those payments will be due.
2. What services do you provide?
Think about what you need an accountant or CPA to do for you before you ask this one. It doesn’t make sense to go any further if they don’t offer the service you need. Accountants can help with a range of financial tasks. Tax filing will be an essential one. Others include making recommendations on choosing the right cloud accounting software, managing deductions, and managing payroll taxes. It can also be a good idea to consult with an accountant once in a while to have them review your debt, cash flow, and financial goals.
3. What is your availability?
Accountants’ well-known busy season is January 1 through April 15, but as a small business owner, your busy season is likely different from that. When you’re hiring a small business accountant, make sure they’ll be available to help you no matter what time of year it is. Chances are, if you have a tax issue, you won’t be able to wait until the next tax season for it to be resolved.
4. Are you experienced in dealing with the IRS?
Hopefully, your dealings with the IRS are few and far between. However, if the time comes, you will need someone who knows how business tax laws work in detail to help you minimize any potential financial damage to your business. An enrolled agent (EA) is certified by the federal government to handle taxes and has experience dealing with audit situations. Even if your accountant isn’t an EA, they should have a strong working knowledge of how the IRS operates specifically in relation to small business matters.
5. How much of your time and attention can I reasonably expect?
Consider the needs of your own small business; you most likely don’t have time to focus all of your attention on one client or customer. The same goes for your accountant. They have other clients and won’t be able to give you their undivided attention at all times. You should still expect to get their attention when you need them, and it’s OK to ask how much. Find out how quickly they will respond to your inquiries and what their communications policy is.
6. Who else besides you will be working on my taxes?
If you’re going to work with a firm rather than an individual small business accountant, more than one set of hands will probably be touching your tax and financial information. Inquire about how the firm works by asking if a CPA will do all the work or an uncertified bookkeeper will do most of the heavy lifting. Either scenario is OK, but it’s within your rights to know whose hands (and eyes) will be on your tax information.
7. What systems do you use to share information and documents with clients?
If you use cloud accounting software, it won’t be necessary to meet with your accountant in person most of the time. Find out what types of technology they use to keep clients’ financial information organized and to send documents back and forth. It’s important to know that you and your accountant will be able to communicate easily and will be working off the same up-to-date information.
8. How will you keep my sensitive data safe?
Data security should be taken into account when hiring a small business accountant. You’ll be sending documents that contain private information, like your social security number and banking information. It’s imperative to find out what measures your accountant will take to keep all of your confidential information safe from hackers or potential identify theft.
9. How much will you help me during tax season?
The main reason you’re hiring a small business accountant in the first place is to take this part of the business off your hands, right? Once you supply them with your information, they should be able to get things rolling. Ideally, they should be handling tax preparation, helping you determine what deductions you can claim, and keeping you informed of any new tax laws you can benefit from in terms of write-offs.
10. Why should I hire you?
This is an accountant’s chance to convince you why they are the right person to handle your taxes. There are plenty of small business accountants out there for you to choose from. Gauge their response when you ask why they’re the right one for the job. If they don’t make a convincing case, you may want to reconsider.
If you’re hiring a small business accountant, then your business is likely doing pretty well. Congratulations! Properly managing your small business taxes is an important part of keeping that business afloat and fiscally healthy. So take the time to ask the right questions. It will pay off in the long run.