In a recent survey, accountants were ranked the most important professionals by business owners.
Accountants do not stop at compliance matters. They are also expert advisors as regards your business’ budgets, analyzers of your financial metrics, and overseers of external investments. Professionals from Accountants Direct provide excellent accounting services, you can check them online.
Picking the right accountant can be a challenge as this is a decision you want to get right. This article will provide insights on how to identify and hire the best business tax accountant.
1. Look for Tried and Tested Professionals
This basically means looking for referrals to accountants that have done a stellar job before.
Your business connects would be a great place to start.
Aside from your circle, government and local chambers of commerce are also resourceful in such matters, and often offer advice and recommendations for free. A smart move would be to hire one of the best CPAs in NYC for your business, if that is where you are based. Go with the best and skip the rest for your company accounting needs.
2. Evaluate Your Business Needs
Most accountants offer an array of services from bookkeeping to payroll management to taxes and audits. Some offer full-service accounting services under one roof. Read more about these services here.
It’s therefore important to identify what your needs and pain points are before looking for an accountant. With this information in mind, you will then be clear on what you are looking for.
Narrowing your focus will help shorten your list of candidates. This way, you can find the professional you need much faster.
3. Look for Industry Knowledge
Having an accountant that has worked in your line of business gives them an edge over one that is new to it. The same goes for one that has worked with a company of similar size to yours.
For example, an accountant with knowledge in seasonal businesses would be comfortable with business fluctuations over time. This also means they know how to expand and contract their accounting activities with business needs.
The same goes for accountants that have dealt with businesses with remote workers. Such an accountant is likely to be familiar, or at least have a working knowledge of cloud accounting.
4. Evaluate the Accountant’s Communication Style
Communication and responsiveness can make or break your relationship with an accountant.
If your workforce is largely made up of millennials, they will prefer to communicate through less formal channels and will get frustrated if they do not get feedback fast.
Conventional firms will stick to the more formal modes of communication, while modern firms are open to using modern tools and communication aiding apps.
Your organizational culture will inform which communication means to go for.
5. A Good Business Tax Accountant Is Big on Security
Data security is a primary concern in today’s business world.
Speak to prospective accountants about their security systems and their safety history. Working with a reputable accountant will ensure that you do not lose data and that it does not end up in the wrong hands.
Aside from data security, seek to find out what accounting software an accountant uses and how it handles vis a vis yours.
If you have two vastly different software, exporting your data might be time-consuming and even expensive. It might also open you up to errors and data security breaches.
In this view, it might be in your best interest to find an accountant who uses the same software you do or compatible software to what you are using.
The next best option is to use collaborative cloud-based software with in-built encryption.
6. Discuss Billing Plans
Don’t hesitate to negotiate on accountant’s fees if you are running a business on a small budget. The most common billing plans used by small business accountants are:
Project-Based
Here you pay an accountant after completion of a project. Say after payroll or after preparation of business taxes. This is more of a pay-as-you-go plan.
Time-based fee
Here you negotiate payable fees, pegged on an hourly rate. The downside to this system is that your accountant is incentivized to get more billable hours.
Value-based fees
These are agreed on monthly/ weekly/quarterly payments. You pay a certain amount after an agreed period, which gives you a level of certainty.
Similarly, inquire about the phone or email advice billing. And if this is even an option. Also, discuss any ways to lower the accountant’s fees if you have a minimal budget.
Some accountants will lower their fees if you take up some duties such as data entry.
7. Years of Experience
The years of experience a tax accountant has should feature prominently in your vetting process. The more years they have the more value they can add to your business.
The best tax accountant should be a CPA, and you should verify their credentials as well. All CPA’s are required to maintain CPE (Continuing Professional Education) credits to keep their qualifications.
Find out what your prospective accountant is doing to keep their skills sharp.
Also, find out if they have helped clients walk through IRS audits before.
If the IRS ever came knocking, you want someone who knows how to navigate the process.
8. In-Person Vetting
You want to shortlist 4 to 5 accountants for an in-person meeting.
Here, you want to look at the person’s credentials, experience, and personality. While competence is the key deciding factor, do not overlook smaller individual characteristics.
How well do they communicate and explain things, do they seem open with information, proactive, and enthusiastic about making your business a success?
Use your analytical skills as well as your intuition to pick the best candidate.
9. Don’t Skip Background Checks
Because your business finances are an intimate part of your business, you want to be certain about the caliber of the person you hire to man your accounts.
Request your prospects at the final vetting stages to provide you with references.
When a candidate is happy to provide references, most people assume that this is proof enough that they are who they state themselves to be.
This is not always so.
Call up a few of the references provided and get some insight.
Social media and the internet can also help your sleuthing activities.
Similarly, look up the person up online. If they are part of a firm, look up the firm and see what information shows up regarding it.
Also, steer clear of any accountant that seeks to take a percentage of your tax return. This is both unethical and illegal in the accounting field.
Close the Deal
With the pointers above, you should be able to identify and hire an excellent business tax accountant.
If you are able to do this early enough, you will also give your business the value of a great business accounting advisor who will help you grow over time.
Aside from financial mistakes, there are other business mistakes that can cause your business's downfall. Check out this article to find out what these are and how to avoid them.
