You own a business that’s hitting success with increased sales in a year. As your business grows, so do the challenges accompanying it. You need to hire an accountant to effectively manage these challenges and keep your business on the path to success.
An accountant is a partner who can increase your business’s growth and stability. He guides you through the tax laws and gives expert advice on financial strategies. However, the question is, how do you find the right accountant for business?
In this blog, we’ll show you how to choose an accountant for business in 2024, guiding you to financial clarity and success.
But before we do that, let’s start by understanding what an accountant does.
Understanding the Role of an Accountant
An accountant is a professional expert who deals with financial information for individuals, businesses, or organizations. Their job involves tracking and reporting on money matters, helping to keep finances clear and under control.
As your business grows, you may want to hire the best online accountant for small businesses or a certified valuation accountant to help with more complex financial issues.
What does an Accountant do?
Whether you’re searching for the best accountant for a small business or a professional advisor for business, hiring an accountant is an important step to managing your finances. Small business accountants handle various tasks such as:
- Financial Record Keeping
- Making Financial Statements
- Financial Analysis and Health Checks
- Budgeting and Forecasting
- Managing Bills and Payments
- Tax Planning and Filing
- Auditing
- Financial Advice
- Implementing Financial Software
- Cost Analysis
- Strategic Planning
When to Hire an Accountant for Your Business?
For many small businesses, the need for a full-time accountant isn’t immediate because the volume of financial transactions is manageable. However, as your business grows, the complexity of financial management increases, and it becomes essential to hire a professional advisor. Let’s determine the right time to hire a tax accountant for small businesses and your choices.
- Business growth: If your business is expanding, whether through more sales, additional office space, or new hires, it’s time to look at professional accounting services.
- Focus on details: An accountant can manage critical financial details such as payroll, tax preparation, and property taxes, ensuring compliance and optimization.
- Software limitations: Even advanced accounting software might not replace the expertise and personalized management a professional accountant can offer.
What are the Options for Hiring an Accountant?
If you’re running a business and facing tax challenges, a business tax accountant can help. You have two main routes: hiring an in-house accountant or contracting with a CPA (Certified Public Accountant) firm. Depending on your business needs, both options have their own merits:
I. Hiring a CPA Firm
CPA firms can handle financial statements and tax payments and offer analysis and advice. Firms usually charge an hourly rate, which varies based on the complexity of the work and the expertise required. A skilled tax expert from a firm should be able to save your business more than the cost of their fees.
II. Bringing an Accountant In-House
An in-house tax accountant manages daily transactions, oversees treasury and cash management, prepares and analyzes financial statements, and handles payroll and assets. An in-house tax accountant can become more cost-effective as your business scales. Accounting firms’ fees can increase with your business growth, whereas in-house costs may be more stable
How to Choose an Accountant for Your Business in 2024
Hiring a reliable business tax accountant is essential for any growing business. A good small business tax accountant is more than someone who keeps your finances in order as they are a strategic partner in growing your business. Here are a few tips to help you on how to choose a personal accountant for your business:
1. Identify Your Needs
Start by figuring out what tasks you need an accountant for. Is it daily bookkeeping, or do you need tax advice and filing? Understanding this will help you decide whether you need a bookkeeper, a non-certified accountant, or a Certified Public Accountant (CPA). This understanding is important when choosing the right accountant for business success.
2. Check Qualifications and Experience
In the U.S., businesses typically have three main types of accounting professionals: enrolled agents (EA), certified public accountants (CPA), and tax attorneys. When searching for an accountant for business, it’s essential to verify their qualifications and experience, particularly in your sector.
- CPA (Certified Public Accountant): Certified by the state and highly knowledgeable in tax and auditing.
- CMA (Certified Management Accountant): Specializes in financial management and strategic planning.
- CGMA (Chartered Global Management Accountant): Focuses on business and government finance.
- EA (Enrolled Agent): Specializes in tax advice and can represent you before the IRS.
- Tax Attorney: This type of attorney mainly focuses on accounting and tax law and can provide support through complicated dealings with the IRS.
Other certifications may highlight specialization in payroll, receivables, and payables, which are crucial when looking for a tax accountant for small businesses. This ensures that the accountant can fully address your specific needs.
3. Ask the Appropriate Questions During Interview
When you’re ready to interview accountant candidates for your business, you must ask the right questions to ensure they’re a good fit. Here’s a concise list of questions to ask an accountant for business :
- What qualifications and training do you have in accounting?
- Can you describe the accounting services you offer?
- How do you structure your fees, and what are your rates?
- Have you worked with businesses similar to mine?
- What accounting software or technology do you use?
- How can you support my business goals, and what additional value can you offer?
- What is your preferred method of communication, and when are you available?
- Do you have experience managing a tax audit or creating budgets and forecasts for small businesses?
Asking these questions will give you a clearer picture of each candidate’s abilities, style, and how well they could support your business’s financial health and growth.
4. Find an Accountant with Relevant Experience
Look for an accountant for a business that is familiar with the tax benefits and opportunities available for small businesses. It helps if they’ve worked with other businesses in your industry and know about the specific costs you’re dealing with.
If you’re facing a certain issue, like a tax audit or going over budget in some areas, try to find an accountant who handles these specific problems. This way, you get someone who’s not just skilled but also right for your business’s unique needs.
5. Get Recommendations
Talk to fellow business owners or check online forums and review sites. Personal recommendations and online reviews can lead you to reliable accountants who’ve proven their worth in the field.
6. Evaluate Their Potential Impact
Consider whether the accountant for business will take care of your immediate needs and assist in your business’s growth. The best accountant for small businesses will offer strategic advice to save money and improve processes.
7. Discuss Fees with Your Accountant
Talking about small business accounting fees is crucial to ensure they align with your budget. Consider asking these questions:
- Do they charge by the hour or offer packages?
- Is there a fee for phone or email advice?
- Can they give you a written quote?
Know the cost of each email or call if there’s a charge. Compare quotes from different accountants. What works for a small business might not work when you grow. Feel free to suggest a payment structure that suits you better. Always ask—you might find flexible options.
Red Flags to Avoid in an Accountant for Business
Selecting the right small business tax accountant is crucial for your business’s success and integrity. Here are red flags to watch out for to ensure you don’t end up with the wrong person handling your finances:
- Receipts not required: Be cautious of any accountant who advises against keeping receipts. Proper documentation is essential for accurate accounting.
- Unclear documents: Never sign checks or documents without fully understanding their purpose. An honest accountant will always explain what you’re signing.
- Service estimates post-tax refund: Consider it a warning sign if an accountant only provides service estimates after determining your tax refund.
- Poor communication: Consistent communication is key. A drop-off or complete halt in communication is a red flag.
- Lack of credentials: Verify an accountant’s credentials. A history of short-term contracts or missing credentials can indicate unreliability.
- Illegal savings: Avoid accountants willing to lie to the IRS to save you money. You are legally accountable for false information.
- Breach of ethics: An ethical accountant won’t share other clients’ confidential information with you.
- Overcontrol: An accountant asking for too much control over your accounts or urging you to sign unchecked documents.
- Unrealistic promises: Beware of promises for huge refunds or deductions without thoroughly reviewing your finances.
- Missing IRS (PTIN) number: A legitimate accountant preparing your taxes should have an IRS PTIN.
Being vigilant about these warning signs will help you choose a trustworthy business accountant who values integrity and your business’s success.
How Much Does a Personal Accountant Cost?
The cost of hiring a personal accountant varies based on what you need them for and your budget. Typically, accountants charge $37.14 per hour, but CPAs can range from $150 to $450 per hour.
Payment methods include hourly rates, flat fees, percentage-based fees, or a brokerage model. On average, a business accountant might make around $54,890 a year. The exact cost will depend on their experience, your location, and the specific services you require. You can pay them hourly, by the project, or through a monthly salary, depending on your needs and their fee structure.
Choosing the Right Accountant for Your Business
Whether or not you need an accountant for your small business comes down to your specific needs, the complexity of your finances, and your future goals. If your business is facing financial complexities, looking to strengthen tax strategies, or aiming for growth, the expertise of an accountant could be invaluable. Ultimately, investing in a good accountant can not only help manage your current financial tasks more efficiently but also pave the way for your business’s success in the long run.
Simplify Your Accounts with TruePro Associates
At True Pro Associates, we offer comprehensive accounting services tailored to meet your unique business needs.
Why Choose TruePro Associates?
- Expertise You Can Trust: Our experienced accountants are well-versed in the latest industry practices.
- Customized Solutions: We take the time to understand your specific circumstances and tailor our accounting services accordingly.
- Transparent Pricing: We discuss our fees upfront, ensuring you understand the value of the services you receive.
Schedule a consultation and learn how we can assist you in achieving your accounting and financial goals.
Contact us today!
FAQs
Q1. What do most business accountants charge per hour?
Ans. Most business accountants typically charge about $37.14 per hour. However, for CPAs, rates can range from $150 to $450 per hour, making it important to discuss accounting fees for small businesses upfront.
Q2. Do you need an accountant if you have a small business?
Ans. Yes, most small businesses benefit from the expertise of a small business accountant or an online accountant for small businesses. They can help manage your finances, suggest tax-saving strategies, and guide your business toward financial stability.
Q3. What is the most popular type of accountant?
Ans. CPAs and EAs are the most popular types of accountants for small businesses. Depending on your business needs, a tax accountant or a certified valuation accountant can provide specialized services.
Q4. Is it mandatory to have an accountant in a company?
Ans. While not mandatory, having a professional business advisor, like a business tax accountant or a small business tax accountant, is highly recommended. They can help ensure compliance, optimize tax strategies, and contribute to the business’s success.
