Unless along with that new business you just purchased you are also a CPA, you'll need to find an accountant. Jean Scheid looks at choosing an accountant for your business and how to make a good determination on the accountant right for you.
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Why You Need an Accountant
No matter how big or small your business is, you will need an accountant to help you with not only financial concerns but to help you file your annual business tax returns to the Internal Revenue Service (IRS). Beyond your annual tax return, accountants can help you with cash flow forecasting and budgeting.
Some accounting firms also offer payroll and 941 employee tax filings required by the IRS. Still others offer their services as registered agents who agree to receive legal notices regarding your business on your behalf.
It's probably not best to choose an accountant from the telephone book, unless you've been referred by a business owner that has a business similar to yours. You may also know an accountant you can choose or perhaps your personal accountant also does business tax returns. Unless you know all the ins and outs of business tax laws, it's best to consult a professional accountant and preferably one with a CPA or Certified Public Accountant designation.
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How to Choose the Right Accountant
To aid you in selecting the right accountant, consider these issues:
Size of Accountant's Business - Do you mind working with more than one associate or do you want more of a one-on-one experience with your accountant? Keep in mind that some larger accounting firms do have associates signed to certain accounts. Consider with size may come pricing. A larger firm with much overhead may charge more. On the other hand, the hourly cost of an associate to work on your tax return will not be as high as the firm's owner or CPA. A CPA will usually just review the associates work, so costs may even out.
Type of Accountant - Find out what accounting firms specialize in. Some do and some do not, however, if you find an accounting firm that specializes in non-profit accounting, you might want to find some other firms to interview. Network with other local companies and find out who they utilize. Remember that the confidentiality of an accountant is held in high regard. By law, your accountant is not allowed to discuss any part of your business without prior consent.
Your Needs - How complex do you expect your accounting to be? Will you need payroll services, monthly financial statements as well as yearly tax returns? Do you want help with financial planning? The more complex your needs, the more experienced your accountant should be and the more services they should offer. If you do require a firm that offers many services, ask about discounts if you choose them for all your accounting needs.
References & Reputation - Choose more than one accountant based on your needs and set up interviews. Discuss your accounting methods, computerized or otherwise, and what services you'll be needing so they can give you an accurate bid. Ask for references and call other companies who utilize the accountant's services to inquire if they are happy and pleased customers.
Qualifications - How well is the accountant qualified to complete all areas of your accounting needs? Where did they obtain their accounting degree and are they a member of the American Institute of Certified Public Accountants? Check your state's local accounting board to see if they've had any complaints.
Price - Don't feel timid to negotiate prices. While the head CPA may have set hourly rates, ask what associate rates are and how you can effectively fine-tune pricing so that it will work for your budget.
Find out as much as you can when choosing an accountant for your business. Skip firms that say they offer "accounting services." More than not, these firms are made up of qualified bookkeepers who may not stand behind you in the case of an IRS audit. Make sure you feel comfortable talking to your accountant. Choose an accountant who speaks your language and can explain tax laws. Keep in mind that your accountant will be analyzing the financial part of your business so find someone you trust.