Just over 50% of small businesses report sales of more than $50,000 per year.
Dealing with sales in the tens of thousands involves proper money management. As a business owner, you also need to ensure sales are correctly documented and taxes are paid. Your accounting also involves paying your employees and helping you apply for small loans.
To ensure all those very important functions are fulfilled, you should consider hiring a professional. Having an accounting and tax consultant on your team keeps you compliant and saves you money in the long term.
To learn how you find the best business accountant for your needs, keep reading.
Find An Accountant Through Referrals
You might start your search for an accounting and tax consultant through professional referrals. Ask other business owners, vendors, and friends and family that you trust if they know anybody in the business. Gather those references and research them online to see if they suit your business needs.
If you work with an accountant for your own tax needs, they might be able to do business accounting as well. In the case they’re not qualified for business accounting, you can also ask them for any professional references. They’re likely to have trusted colleagues that they can recommend for your business.
Know Accounting and Tax Consultant Credentials
All you need is an IRS preparer tax identification number (PTIN) to be a small business tax consultant. But the PTIN doesn’t tell you anything about the experience and skills of an accounting and tax consultant. Instead, you want to make sure that the service you hire has the right qualifications for the job.
Below are the three types of IRS-certified account and tax consultants. To ensure your finances are in capable hands, choose one of the following accounting professionals:
- Enrolled Agents (EAs). An EA has worked at the IRS for a minimum of five years. For this certification, they also need to pass a three-part special exam.
- Certified Professional Accountants (CPAs). This is the only licensed qualification for professional accounting in the US. Getting certified requires passing an exam after formal schooling. A CPA is the highest level accounting certification you can achieve.
- Attorneys. An attorney who specializes in business taxes may also be qualified to help you with your tax and accounting needs. These professionals passed the bar exam and have a license to practice law in their state.
Ask your prospective accounting and tax consultants about their specific experience with your company size. They should be capable of working with both your number of employees and your revenue size.
Check Online For Certified Professionals
Before heading to Google to search online for your business accountant, start with the bodies that certify the profession. This way you know you’re getting an accounting and tax consultant who has the training needed to do the job.
Depending on the type of professional you’re looking for, you can check different online directories.
You can check for Certified Public Accountants (CPAs) on the Association of International Certified Public Accountants (AICPA) website. You can look for Enrolled Agents (EAs )on the website of the National Association of Enrolled Agents. If you’re looking for an attorney who specializes in business finance and tax law, you can check the local bar association.
Decide Whether You Need An In-House Accountant
Whether or not you need an in-house accountant depends on your preferences. Some people prefer having the presence of the accounting and tax consultant in the office. They’re available for meeting and to meet face-to-face.
But, thanks to technology, you no longer need to go through the trouble of hiring a new employee. You also don’t need to worry about having accounting software or keeping your accounting team up-to-date on training.
Instead, you can hire a managed services company that handles all of your accounting needs from an independent location. You collaborate via phone calls, email, video conferences, and secure accounting software. By hiring an online team from somewhere like this site, you can cut down on costs and simplify your accounting.
Align Industry and Experience
Although not a prerequisite, it’s in your best interest to find a business accountant who has experience in your specific industry. Not only will they understand the unique needs of the industry, but they’ll also know about any compliance and regulations that you need to follow.
To double-check their experience in relation to your industry, you may ask for a client list. It should include details on other clients and you can ask about how they contributed to their growth.
Know When to Hire Your Accounting and Tax Consultant
There’s no perfect time to hire your business accountant. But there are some key points in your business lifecycle that can indicate the need for an accounting and tax consultant. We’ve outlined some of these below.
If you’re just starting your business and you don’t know even the most basic accounting procedures and protocols, consider outsourcing your accounting needs to a professional. The start-up phase is critical and managing your accounting needs can make or break your growth.
A phase of rapid growth may prompt you to seek outside help with your accounting and taxes. Growth means more revenue, more employees, more customers, and more vendors. And that all means you need a way to manage it.
A business accountant will help manage your cash flow and track incoming and outgoing money. They can help you manage your money with your future goals in mind. They can also show you where to cut expenses and how to make the most of your profits.
Tax time can be a hectic one as you try and manage the daily business at the same time as preparing and filing your taxes. A business accountant can take all that work off your hands, so you only have to sign the return.
But they’ll do more than just file your taxes. They’ll check that you’re paying the right taxes for your industry and that you’re filing the right deductions. That means fewer fines and penalties and more money saved by applying deductions you didn’t even know about.
And if you go through an audit, your accountant or tax professional can act as your liaison and help you prepare.
More Money Tips and Tricks
An accounting and tax consultant can take care of all the financial components of a business so you can focus on running the business. To find a business accountant, decide what type of professional you need and whether you require an in-house team member. You can ask other business owners for referrals and check qualifications online.
And for more on your personal and business finances, be sure to check out our blog for more money tips and advice.