How To Hire an Accountant For Your Business

Whether you’re an entrepreneur, a freelancer or a small business owner, there will come a time when DIY accounting services are no longer adequate to serve the needs of your growing business. Many ethical small business owners who are operating on shoestring budgets go much longer than is necessary before making the decision to bring in a professional.

On the other hand, some business owners feel that the software that’s currently available is adequate to meet their needs. In the early stages, the decision to use accounting software rather than hiring a full-time accountant is one that makes sense for many small business owners and freelancers. It’s budget friendly and helps them with their tax preparation needs.

So why would you want to consider hiring an accountant? Because these professionals do more for businesses than simply prepare their taxes once a year. They often wear many different, yet important, hats—including financial advisor for your business or type of outsourced CFO.

Accountants can also see the big picture of your finances, analyze your situation, and offer strategic advice to help you get a firmer hold on your monetary circumstances now and in the future. And then there is the tax situation. An accountant can create key documents, including profit and loss statements.

Knowing that accountants do so much more than your tax accounting software can manage, it’s essential at some point for all businesses to make the upgrade and hire an accountant to handle your accounting needs.

When Is the Right Time to Hire an Accountant?

Some companies make the move to outsource an accountant years and years into their business, while others have made that leap practically at the beginning. For most small organizations, an outsourced accountant manages the bulk of their needs without having to bring in a full-time accountant.

For those who have been operating with an outsourced accountant, the time to upgrade to a full-service, in-office accountant typically comes when the business reaches the 30+ employee mark. Alternately, if you find yourself calling on your accountant frequently, it’s probably time to bring them on full-time.

But how do you know when the right time is to look for an outsourced accountant to help with your financial needs? That’s a trickier question for businesses that are still treading water between turning a profit and really being profitable. The short answer for when to hire an accountant for your small business is: when you’re ready for what comes next, an accountant can make the difference for many businesses.

What Are the Benefits of Hiring an Accountant for Your Small Business?

Accountants bring specialized knowledge, skills, and training to the table. Tax laws and financial situations change continually, and by hiring an expert to help you, your business will be better poised to enjoy greater success in the coming year. The main benefits are:

Expertise

Good accounting services can establish the financial foundation of your business and hiring a professional is the only way to ensure that the foundation is a firm one. The sooner you take that step—even outsourcing professional accounting services—the better prepared your business will be for unanticipated financial woes.

Your accountant can help you do many things to grow your business as well as explain whether or not now is, in fact, a good time to expand. They do this by creating financial forecasts, establishing a business budget, and working on strategies designed to help you achieve the business and financial goals you’re working towards.

Expense

Outsourcing an accountant is a highly cost-effective method for obtaining the expert advice and personalized attention of a qualified accountant. According to Northwest Staffing Resources, a salaried employee can actually cost about 57% more than his actual wage because of such benefits as health insurance, sick days, and vacations. So a $50,000-per-year salary on paper could translate to an actual cost to you of $78,500. An outsourced accountant, on the other hand, will cost you about $36,000 per year.

Protection

Accountants are highly-skilled professionals for good reason. The work they do must be of precise quality to keep you and your business out of trouble with Uncle Sam. The IRS doesn’t like it when details are left out, calculation errors are made, or information isn’t completely accurate. A professional accountant reduces the risk of mistakes and the right accountant will stand behind the service he provides.

If you choose to hire an operational accountant, who is more involved in the day-to-day operation of your business, here are just a few ways he can help your business:

• Manage daily finances to ensure they are compliant with the laws in your state
• Conduct audits to discover cost savings with employees, operations, and vendors
• Manage payroll each month
• Prepare taxes—including employee taxes, contractor taxes, payroll withholdings—and create the appropriate financial reports
• Create a financial safety net to protect the business in the event of a disaster or tragedy

As your business grows, accountants can fill other roles, too, like providing advice on how to create new growth opportunities, helping safeguard your business against audits and, when necessary, going through the audit process with you. In addition, they can help identify problem areas in your business, create a new plan to get your finances under control, and work with your creditors to establish payment plans that will lower interest charges and remove liens.

Where Do You Look for the Right Accountant?

When you’ve finally made the decision to hire the perfect accountant for your business, the next step is to find a pool of accountants to draw from. You have several avenues available to you:

• Referrals from friends and family — Before going this route, remember that the accountant who does the personal accounting for a friend or relative may not be the right person to handle your business accounting needs. That doesn’t mean the person won’t be the right accountant. What it does mean is that you need to seek out additional information before diving in and hiring this accountant.
• Network with other professionals — You’d be amazed at the qualified and talented professionals within your community that you can meet at events like Chamber of Commerce functions or other small business organizations within your community.
• CPA professional organizations in your state — The American Institute of CPAs has a master list of the professional CPA organizations in every U.S. state. From this list you can find CPAs who are located not just in your state, but in your city, too. You can further narrow your search according to areas of expertise to ensure that you gather a nice list of potential CPAs to interview.

Questions to Ask Potential Accountants

It’s never wise to go with the first accountant you come across—at least not until you’ve interviewed a few more. You want to look for several things as you interview the accountant, including how well you relate to them on a personal level. After all, this is a person you hope to work with in order to grow your business for years.

The other thing you need to look for is how well the accountant responds to your questions. Is he vague, condescending, overly serious or not serious enough? Aside from how the accountant makes you feel, here are the questions to which you definitely need answers:

• “What kind of experience do you have working with small businesses, freelancers, or entrepreneurs [whichever is appropriate for you]?”
• “How much experience do you have working in my industry?”
• “Do you offer more than tax preparation services?”
• “What services do you provide?”
• “What are your fees for various services?”
• “How are your fees assessed?”
• “Are you a CPA?”
• “Who will I be working with?” (You want to make sure that you have an opportunity to interview the exact person you’ll be working with within the firm and that you are able to connect with that individual.)
• “How much access will I have to you?”

Ultimately, the perfect accountant for your business is one who is all of the following things:

• Qualified to do the job
• Experienced and capable in working with small businesses
• Understands the financial challenges of businesses in your specific industry
• Responds to your questions and provides access to you
• Offers services you need now and services you may desire in the future
• Falls within your budget

Once you’ve found an accountant that meets all these needs for you, then you’ve found the perfect accountant for your business!