Evan
09-05-2008, 10:48 PM
One of the most crucial relationships you may develop as a small business owner is with an accountant. Your accountant may serve you in a variety of ways throughout the year, but most commonly is utilized as a tax preparer. Accountants can also help you with payroll, auditing, monthly closings, account reconciliations, cash management, accounts receivable, accounts payable, accounting for your fixed assets/depreciation, accounting for intangible assets/amortization, and much much more.
There are several factors you should look at before you choose your accountant. While it may seem that any person advertising themselves as an accountant would suffice, you should check out multiple sources and choose the best for your needs.
You should look for the following information from your accountant:
Credentials. There are a lot of credentials that a person may have, the most common being the CPA (certified public accountant). A CPA can provide the widest array of services and has stringent requirements to maintain their status. Some other credentials are EA's, or enrolled agents or PTPs, professional tax preparer. Some EAs and PTPs also provide accounting services. EA's are granted their status by the Internal Revenue Service, while PTPs are granted by the National Association of Tax Preparers. Many other type of credentials do exist, but those will be the most common for accountants or a tax preparer.
Education. In absence of credentials, look for a good education of an accountant. A bachelor of science/arts in accounting would be the minimum you should accept. An MBA, MPAcc, or MST would also suffice.
Experience. While years of experience may play a role, see if they're experienced in your particular industry. If you have inventory and the accountant deals with only service industries, (s)he may not be best for your needs. Also specific industry experience may be beneficial. If your accountant works with other restaurants, (s)he may know of deductions, tax credits, or other accounting tid bits to help your business.
Services. What exactly are your needs, and what can they do to meet them? Your accountant may not be quipped to handle all of your needs, in which case you may need to find an alternative. Not all accountants will do payroll or audits. In fact, only CPAs are licensed to provide an attestation that your books are materially correct based on the information you presented them. Others would only be able to verify the information. Make sure that your accountant can provide the basic services your looking for, and if not, perhaps they can provide a recommendation for another provider.
Rates. Accounting services are not cheap, and the most expensive accountant isn't necessarily the best. If you are solely motivated by the cost of services, you could be cutting yourself short. But feel free to ask an accountant about their hourly rates. Sometimes it may depend on the service rendered. You may be able to negotiate the price, but expect to pay the base rate provided by the accountant.
Good luck in choosing your accountant, and be sure to maintain a relationship with him/her throughout the year. An accountant can be one of your best business partners.
There are several factors you should look at before you choose your accountant. While it may seem that any person advertising themselves as an accountant would suffice, you should check out multiple sources and choose the best for your needs.
You should look for the following information from your accountant:
Credentials. There are a lot of credentials that a person may have, the most common being the CPA (certified public accountant). A CPA can provide the widest array of services and has stringent requirements to maintain their status. Some other credentials are EA's, or enrolled agents or PTPs, professional tax preparer. Some EAs and PTPs also provide accounting services. EA's are granted their status by the Internal Revenue Service, while PTPs are granted by the National Association of Tax Preparers. Many other type of credentials do exist, but those will be the most common for accountants or a tax preparer.
Education. In absence of credentials, look for a good education of an accountant. A bachelor of science/arts in accounting would be the minimum you should accept. An MBA, MPAcc, or MST would also suffice.
Experience. While years of experience may play a role, see if they're experienced in your particular industry. If you have inventory and the accountant deals with only service industries, (s)he may not be best for your needs. Also specific industry experience may be beneficial. If your accountant works with other restaurants, (s)he may know of deductions, tax credits, or other accounting tid bits to help your business.
Services. What exactly are your needs, and what can they do to meet them? Your accountant may not be quipped to handle all of your needs, in which case you may need to find an alternative. Not all accountants will do payroll or audits. In fact, only CPAs are licensed to provide an attestation that your books are materially correct based on the information you presented them. Others would only be able to verify the information. Make sure that your accountant can provide the basic services your looking for, and if not, perhaps they can provide a recommendation for another provider.
Rates. Accounting services are not cheap, and the most expensive accountant isn't necessarily the best. If you are solely motivated by the cost of services, you could be cutting yourself short. But feel free to ask an accountant about their hourly rates. Sometimes it may depend on the service rendered. You may be able to negotiate the price, but expect to pay the base rate provided by the accountant.
Good luck in choosing your accountant, and be sure to maintain a relationship with him/her throughout the year. An accountant can be one of your best business partners.