by Cheryl L. True
Choosing the right accountant for your small business can mean the difference between success and failure. After all, it’s your financial numbers that make or break your business.
Unfortunately, once you’ve selected an accountant, it’s a pain to switch. Your accountant gains detailed knowledge of you, your business and your data it makes it very tough to transition to a new accountant.
Given the inertia that settles in…
by Cheryl L. True
Choosing the right accountant for your small business can mean the difference between success and failure. After all, it’s your financial numbers that make or break your business.
Unfortunately, once you’ve selected an accountant, it’s a pain to switch. Your accountant gains detailed knowledge of you, your business and your data it makes it very tough to transition to a new accountant.
Given the inertia that settles in after you’ve selected an accountant, it’s important to make a good choice the first go-around. Surprisingly, most business owners don’t thoroughly consider their needs when selecting an accountant. That’s because many of us who don’t have a strong accounting background view all accountants as being equal.
But the reality is that all small business accountants are not created equal.
This article explains how accountants can assist your business and provides useful questions you should use to choose an accountant that truly can help your business grow, not somebody who just crunches the numbers.
The bottom-line is that you should expect today’s accountant to be much more than a bookkeeper. Most do add considerable value. The trick is to separate the wheat from the chaff.
Business owners are often confused as to the certified public accountant (CPA) designation. A CPA has a surpassed accepted financial education levels, passed state-administered tests to prove competency and periodic re-certification exams. Certain situations, such as audits and many loan applications, require CPA involvement. Not surprisingly, CPAs can charge higher fees than a non-CPAs. But there are a great many non-CPAs who excel at small business accounting and financial and technology consulting. Again, getting to know them and your needs is the necessary first step.
A good accountant can deftly handle data and numbers but should also be able to demonstrate quick and creative business acumen.
Imagine this scenario. You hire an accountant based on the assumption that he understands the basics of your business. Then, you find out that he’s never had a client like you before. Instead, he’s only prepared tax forms for wealthy individuals that don’t own businesses. Avoid that possible disaster by asking who the accountant works with. If they are businesses that are similar to yours, that’s a good sign. In asking about their clients, you will also want to understand how busy they are and whether they have the time and resources to support you adequately.
Ask the accountant what you can expect fees to be and will he guarantee that you will not exceed certain amounts that you agree upon up front. In a time-based fee structure, make sure to find out the hourly rate, as well as all fees for expense reimbursement. Find out now whether a simple two-minute phone call or a one page fax means an hour of billable time. If that’s the case, run for the door.
As a final question, it’s always good to let the accountant make the case for why you should engage them. Find out whether your prospective accountant can introduce you to people who might be useful to you, including prospective customers, suppliers, bankers, and investors. Since talk is cheap, take it one step further. Ask the accountant for examples of introductions they’ve made in the past for other clients and how those introductions played out.
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About the Author:
Cheryl L. True is a Manila-based freelance writer who writes on a variety of topics.
