Key Accounting Solutions

Choosing the right accountant: Tips from Inc. Magazine

Posted in News

Choosing the right accountant: Tips from Inc. Magazine

It's always a good idea to spend some time researching your options when you are about to make a big decision, like choosing an accountant or accounting firm.

We found this article that is an easy read and has some really great suggestions. Enjoy!

Excerpted from Inc. Magazine. Read full story.

It's hard to find a good accountant—so hard, in fact, that it has become something of a running joke in the small business world. Here are some thoughts from Inc. Magazine.

Q: What's the definition of an accountant?
A: Someone who solves a problem you didn't know you had in a way you don't understand.

Okay, so maybe that's not entirely fair. But as with most humor there's a grain of truth to the joke. Most small businesses choose an accountant – either hiring a "numbers person" on staff or hiring accounting services on a contract basis – when a business' financial challenges have become too great to handle without expert help. Maybe you want to better the financial function of your business. Or perhaps your accounting software isn't providing the type of data you need to grow your business. Having trouble switching from cash to accrual accounting? Are your financial statements inaccurate or incomplete? These are all good reasons to look for a Certified Public Accountant (CPA).

"It all depends on the size of the company. If you're a small business owner and find yourself sitting in front of QuickBooks wondering where to begin, that's a good indication that it's time to find someone knowledgeable," says Mark Koziel, Director of specialized communities and firm practice management for the American Institute of Certified Public Accountants (AICPA).

Here is how to determine whether you need an accounting firm or an inside accountant, how to determine what qualifications to seek in your accountant, and how to choose the right accountant for your business.

Choosing the Right Accountant: Hiring a Firm Versus an Inside Accountant

Many entrepreneurs who launch their own businesses start out by wearing the accountant's hat and doing your own taxes, in addition to doing just about everything else in the business, too. It's become easier for a layperson to keep track of a business' finance with the advent of simple bookkeeping software, such as QuickBooks, Quicken, and Microsoft Office Small Business Accounting. But there comes a time in a growing enterprise when it makes sense to hand over responsibilities for taxes, accounting, and the rest of the financial functions to specialists.

The right accountant can help a business with not only tax returns, but with longer term tax planning, business planning, networking, and even personal tax planning if your still the major stakeholder in your business. "It is an absolutely critical decision," Koziel says. "You are trusting that CPA with your financial future as a small business. You're hoping that it is someone well versed in what you need, and someone who has had other life experience and can help you from a financial perspective."

Before you can find the right accountant, you need to determine if you need an accounting firm or an inside accountant.

Choosing the Right Accountant: When Is It Time?

Many small businesses don't have the volume of financial transactions that necessitate hiring a full-time -- or even part-time -- bookkeeper or accountant on staff. Then again, the financial situation of their business is such that they could benefit from more regular financial review and planning and up-to-date accounting -- instead of leaving every invoice, receipt, and ledger to hand off to the tax preparer at the close of the fiscal year.

Hiring an outside accountant or accounting firm on a consulting basis is a good first step for a growing business, Koziel says. The outside firm can often cost less than the salary and benefits of a full-time employee and, at the same time, you may be getting a higher level of advice from a CPA or a tax accountant, the latter of whom usually is a licensed CPA and a lawyer specializing in tax law. Even with the latest and greatest accounting and tax software, it still may be easier to farm out your financials to a CPA firm that can manage your books online through secure software-as-a-service programs than to maintain those software programs in-house.

Read the full story here.

Busy? Need to meet...

Flexible Meeting Times and Locations

Tips, News & Updates

Have you considered succession planning for your business?

Succession planning can be one of the most difficult and challenging tasks for a small business owner. Why? For some business owners, it's a matter of...

Client Testimonials

  • "I have been very happy with everything Key Accounting has done for me over the years, both in my business and in my personal finances."
    - Curtis N.