5 questions every entrepreneur should ask themselves before hiring an accountant

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When you are in the early stages of starting a business, it is often difficult to balance all the necessary assets you need to succeed.

One of the most influential people you should have on your team is a competent accountant or accounting and tax planning firm. Whether you are a one-person business, have just a few employees, or your business is established and has hundreds or thousands of employees, there is a need to have an accountant to assist you with tax returns, audits, and bookkeeping.

But how do you find the right accountant for you?

Finding the right person for the job can be overwhelming and sometimes costly for a business owner. The key to finding the right accountant is to ask the right questions beforehand to understand if he or she is the right one. However, when you start a business, it can be difficult to answer the right questions.

Related: Why Accounting Skills Are Essential for Entrepreneurs

Here are the five questions to ask yourself when consulting different agencies or accounting firms to hire them for your bookkeeping and bookkeeping needs.

1. Which industries do you specialize in or do you have the greatest expertise?

Not all companies are the same. Likewise, not all accountants are the same.

Your business is in a specific niche and has specific billing, bookkeeping, and bookkeeping needs. If you’re a medical provider that bills insurance, your books will look completely different compared to an e-commerce store. You do not want to do without differentiated specialist knowledge.

Finding someone with a background in your type of business will help you choose the right company or person. Every business is different and you need someone who knows how to handle it.

2. What is your business model?

Asking questions about their business model and how they work is a key differentiator.

Some accounting and accounting firms charge you for every minute you spend with them, whether on the phone or in person. Newer companies like Easier Accounting operate on a different model. We set you up a subscription that gives you unlimited access to our accountants for questions and advice.

Having someone who bills hourly might work for some because you only need him or her a few times a year. For others, having open lines of communication works far better without fear of wasting 15 billable minutes on a 15-second question.

Know your expectations and ask the right questions to understand if you can meet them. Different companies and business owners need different types of business models. For newer business owners, working with someone to mentor and help you is generally best, but it usually comes with a monthly fee rather than an hourly rate.

3. How many services do you offer?

Sometimes it can be good to have multiple eyes on your books. Using one company for accounting and another for tax prep can have certain benefits, but more often than not it makes things messier.

The question of the services they offer is an essential question for many reasons. A lot of this comes down to expectations and understanding of what your business needs. A record of transactions, known as bookkeeping, is the fundamental foundation of bookkeeping, but there are other facets of accounting and finance such as tax planning and preparation.

Knowing how consistent your operations are should be a factor in your decision to hire a firm. If they’re only available for bookkeeping but can’t help with tax returns or auditing, you might find better value elsewhere.

Many accountants are a one-person show, and it works for some companies, but other accounting companies are firms with different departments. This allows employees to have a deep understanding of their area of ​​expertise and allows the company to help with multiple aspects of your finances. This specialization is the most efficient way of running the backend of your business and is something to look for in an accounting firm.

Also see: 5 Trends Disrupting the Accounting Industry

4. Are you an individual or a company?

To add to the last question, since it’s difficult for one person to cover everything well, does they have a team of people who are well trained and specialized in a particular service?

By knowing more about your accountant and their business, you can rest assured that you are receiving the best possible service. A firm that does tax planning, accounting and tax preparation and has departments for every department stands head and shoulders above a one-person operation.

Some people who are used to dealing with a person and enjoy developing a relationship with that person may not enjoy the experience as much. However, you should understand that a single person generally cannot serve your business the way a corporation can.

5. Do you offer both compliance and consulting services?

As mentioned above, it is not uncommon for larger firms or accounting firms that the company you hire will only handle bookkeeping and tax preparation. While this keeps you in compliance with the IRS, it doesn’t help you strategize to get the most meaningful tax return possible.

It is important to understand the capabilities of these companies. Since many companies only focus on compliance but don’t help you with upfront strategies to maximize your tax return, you should find one that offers both, especially as your business grows and becomes more complicated.

Related: Every entrepreneur should know accounting

There are many questions that don’t necessarily need to be answered when starting a business, large or small. But having as many resources at your disposal as possible will make the journey less stressful.

When you are looking for an accountant, find a company you can trust and someone to turn to when things get stressful. It’s best to find someone who is patient and willing to admit when he or she doesn’t have an answer – an accountant who doesn’t shy away from seeking an outside opinion or reaching out to his or her team.

As difficult as it is to navigate the accounting, taxes, auditing, etc. for your business, it is worth every financial investment and mental focus to hire someone to guide you through the process.

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