About 75% of all tax fraud is committed by middle-class income earners. The rest falls to corporations. If your business is caught in the act, you’ll face fines and possible jail time.
The worst part is that you could be committing tax fraud without even realizing it. When you’re a new small business owner that doesn’t know anything about accounting or taxes, slip-ups are bound to happen.
The best way to avoid these little mistakes is by hiring the best accountant for your company.
The question is, what should you be on the lookout for? How much experience should your accountant have, and what licenses do they need? Continue reading to find out.
When Do You Need an Accountant?
Why do you need an accountant? As long as you have basic math skills, shouldn’t you be able to do the number crunching on your own?
If only business ownership were that simple.
The truth is, accounting is a little more complicated than performing basic addition and subtraction. If you don’t know anything about how accounting works, you may find yourself getting a bit lost.
The numbers become more complicated the more your business grows, and getting a loan is difficult without an accountant penrith (or wherever you’re located) on your side.
You Know Nothing About Accounting
When you’re starting out, the slightest slip-up can stop you from being able to open your doors. In order to get a business loan, you’ve got to include a financial section in your business plan. Not only that but having that kind of road map is helpful in general.
While you may not know where to begin with managing your finances, an experienced accountant does. They can help you come up with a winning strategy and even walk you through filing your taxes at the end of the year. They’ll make sure that you get to take advantage of as many tax write-offs as possible.
You’re Trying to Get a Business Loan
Most people don’t have the money needed to start a business sitting in their pockets. They have to take out a loan of some kind.
You don’t need an accountant to get a loan, but their expertise will do a lot to get you through the process. They can walk you through all the terms of the loan and make sure you understand interest rates and repayment conditions before you sign your name on a contract.
They will answer lenders’ questions about the state of your finances and your revenue projections. Having an accountant on board will also show lenders that you’re serious about your business, increasing your chances of getting the funding you need.
Your Business Is Booming
Your business is in full swing. You feel like you’re bringing in more and more clients every day. The question is, what do you do with your newfound profits?
Now that your company is growing, you’re going to need to hire more employees to help you manage things. You should also probably take on a few new vendors.
It can be a lot to handle. Letting an accountant take care of some of the workload will do a lot for your stress levels.
Choosing the Right Accountant for the Job
Now that you know why you need an accountant, it’s time to pick the right tax planning services for the job.
You’ll need to make sure you ask the right questions and get a referral or two.
Check Their Experience Level
While you shouldn’t completely write off an up-and-coming accountant, most smart business owners choose a firm that’s been around for at least 5 years.
This ensures that the firm has existed long enough to where they’ve seen plenty of businesses like yours and know what they need to do to help you.
Ask About Their Licenses
It’s not required for an accountant to have a CPA (Certified Public Accountant License), but it is preferred. To earn their CPA, the best accountant has to undergo a certain amount of training and pass an exam.
Accountants have to retake the test every now and again so they can renew their certification. That means if an accountant has a CPA, not only are they well trained and experienced, but they’re also always equipped with the latest knowledge.
Get a Referral
If you know someone that’s hired an accountant in the past, ask them about their experience. You shouldn’t hire a firm just because a family member or friend had a good experience with them, but it doesn’t hurt to learn more about the person they went through.
It at least gives you a name that you can type into Google. Check out the reviews, and don’t be afraid to give the accountant a call.
Find Someone With Experience in Your Industry
Every type of business has different accounting needs. This being said, you should find an accountant that has experience with your specific industry.
This way, you’ll have someone on board that can take care of you during tax time, no matter if you’re an LLC, corporation, or partnership.
Ask About Billing
Most accountants work on an hourly basis, but there are some that charge by the month. Either way, you need to find out how you’re going to be billed, so you can factor in the expense with your other bills.
It’s also a wise idea to get quotes from several different firms. Doing so will help you get the best deal.
Find the Best Accountant for Your Small Business
While you can take care of your business’s expenses on your own, if you don’t have the proper accounting experience, you’re bound to make an error.
Balancing business finances is about more than crunching numbers. Hire the best accountant to take care of the money so you can focus on running your company.
For more tips that will help you manage your company’s cash flow, visit the Business & Finances section of our blog.
