If you’re thinking about hiring a small business accountant, you’re not alone. Many business owners turn to a professional once it becomes clear that there are not enough hours in the day to do the work and manage finances for their business.
We’ll cover some basic information in this article to help you get started on your search for a business accountant.
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Many small business owners use the terms bookkeeper and accountant interchangeably. But you need to know the difference if you’re hiring for your business.
Accounting is a broad term that includes many financial tasks. Bookkeeping is a subsection of accounting focused on daily financial operations like bills, invoices, payroll, expenses and more.
Certified public accountants (CPAs) are certified by a state board. They’ve completed legal requirements to take on business finance responsibilities, and they can be held liable for professional misconduct.
What you choose for your business will vary based on your budget and needs.
These are some examples of financial tasks you can outsource to an accountant for small business:
But, as John Frank, CEO and founder of Third Road Management, explains, accountants are diverse and fill many needs. It’s not likely you’ll hire just one person to fulfill your accounting needs.
“If you hear a business owner say something like, ‘I need to talk to my accountant,’ they are generally referring to their external tax advisor, not their internal controller or staff accountant that runs the books for their business,” Frank says.
Michael Nova, owner of Nova Custom Label Printing, believes that any small business owner can manage daily bookkeeping, but business owners need to recognize when they need help.
“You might already have enough on your plate just running your business and keeping track of everything through software,” Nova says. “Taxes are an undertaking that is just too time-consuming for most business owners.”
Nova says hiring a small business accountant helped his business grow. “Hiring an accountant allowed me to focus on my business, save time and ultimately grow my company.”
Ines Zemelman, founder and president of TFX, agrees that you should get help with accounting for your small business. She says your first priority should be getting help with filing small business taxes with the IRS.
“The U.S. tax code is complicated, and most business owners are not tax experts,” Zemelman says “Misunderstanding tax regulations may lead to severe legal issues, audits and debts.”
Here are some suggestions for questions to ask a prospective accountant before hiring them:
When you look for an accountant for a small business, you can ask for referrals from other business owners or read reviews to find a service provider online.
“For instance, if you own a retail store, as long as the accountant has experience with any type of retail, that would be helpful,” Nova says.“There are many different types of retail shops, so the chance for conflict would be small.”
Then, narrow down accountants by size. John Frank believes you should try to be the small fish in a big pond.
“Larger firms generally will have more in-house expertise, better processes and technology, redundancy in the event of turnover, a better commitment to continuing education and more,” he says.
But you shouldn’t settle for bad service. “If you find yourself in a situation where people aren’t paying attention to you, that typically means that you should find a slightly smaller pond where you can get the attention you deserve” Frank says.
Accountant Ines Zemelman encourages small business owners to shop around and carefully vet their accountants. “Many tax firms, attorneys and individual professionals offer free discovery calls where you can discuss your needs and get an initial consultation.”
Costs vary depending on the role of your accountant, the size of your business and the complexity of the financial services or tax services. Michael Nova says he pays $1,500 a year for an accountant to prepare his small business taxes.
John Frank says that if your business is small (less than $1 million in sales) and you don’t require a lot of tax strategy, it may be worthwhile to be budget-conscious when looking for an accountant.
But he suggests that good financial records and accounting services can pay for themselves.
“You’ll get what you pay if you hire a strong firm that can provide you with tax strategies that more than compensate for the incremental cost,” Frank says.
An accountant can help your business save money and use money more effectively. The right business insurance can help you avoid unexpected financial losses.
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Next Insurance does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors for personalized guidance.
Jessica spent over a decade working in education before moving into content marketing. She has worked on content marketing campaigns in the edtech, real estate, and personal finance sectors. She has a passion for working with companies that take the time to educate their customers. When she’s not working, she’s probably outside with her two kids.
