With over 28 million small and medium companies owned in the United States, the demand for accounting for small businesses is high. Many times, small business owners try to do their own accounting. This is one of the main reasons small businesses fail. A great accountant will be able to help your small business thrive and survive these tough economic times.
Challenges of Small Business Accounting
Small business offers accountants unique challenges that will test their creativity and regurgitate them, because they want to do the best job for you.
The Renaissance Owner
The first challenge many accountants face is an owner who has a hard time transitioning to outsourced accounting. Business owners can sometimes be the sole employee of their company. They do the books, the payroll, run the business, etc. It is an accountants job to free up their time so that they can focus on other aspects of running the business. Many owners use programs like QuickBooks to help track profits and expenditures. They assume that the program is less expensive than an account. However, an accountant has a lot of value. An accountant knows which banks have the best rates on checking accounts, what new regulations are coming, and how your company can save money.
The Resourceful Accountant
Another unique challenge is the small funding. An account will be able to find ways to make a business remain afloat on a restricted budget. When accounting for small businesses, it is important to stay current in your knowledge about potential deductions and tax incentives. Deductions and tax incentives will save business owners money. Because many owners choose to do the accounts themselves, they are missing out on the deductions and incentives, because they are no informed.
The Middle Ground
Websites like entrepreneur.com are a great resource for business owners. The website helps guide owners through accounting processes. These websites also give advice about when to hire an accountant, tips for small business accounting, and the common mistakes made when claiming deductions and expenses. There is one con to picking this route. Business owners have to spend a lot of time educating themselves on accounting and tax laws. If they are the sole employee, they are short on time.
A Professional CPA: The Perfect Choice
If you want to increase the chances of your small business succeeding, you should go with a Professional CPA. They offer sound financial advice, and they are there to help you with all the hiccups that comes with small business accounting. At first you will might find the expense unnecessary, but do not worry, an accountant will pay for themselves in the long run. They will help you thrive by identifying areas of growth and areas that need some tweaking. They are trained to use their expertise to streamline costs and improve your company’s financial outlook by creating accurate financial readings. Unfortunately, not all professional CPAs are the same and have the same professional standards. You need to choose the right person for your company. This is your livelihood and the wrong advice can end it and sometimes lead to being charged with tax fraud.
Characteristics of a Good Small Business Accounting Firm
Here are some things you should look for when choosing to hire a small business accounting firm.
How long has the firm been in business is a good indication of the firm’s business practices. New firms can have better credentials or training, but longevity helps point to great accountability and customer services.
2. Good Reviews
You should check to see if anyone has filed a complaint against the company. If the firm is a member of the Better Business Bureau, it is easy to check their rating and see how any complaints, if any, have been resolved.
Look to see if the firm has any affiliates. Many organizations in accounting have standards that every member has to uphold. You can check an affiliate’s website to see what their standards are. This is important in determining how reputable the CPA or firm is.
What is the rate charged? You should compare the firms rate to the industry’s average. Is it more, less or equal to it. Higher rates do not equal better services, but extremely below average rates are a warning sign. You should stay away.
The choice of an accountant is just as important as your decision to start your business. As a small business owner, you need to be aware of what an accountant can do for you. A bad accountant can ruin your business by causing it to lose profits. A good accountant will stabilize your business’s finances and be there to offer you timely advice. A great accountant can turn your small business into a thriving mini empire by creating new opportunities and improving efficiency to make your business more profitable. In the end, you and your accountant need to have a strong trusting relationship. Your success is their success as well. That is why an accountant for small business keep current on the changes of the ever-evolving industry. Small business accounting has its own regulations and unique ways to help navigate through the challenges that come with small businesses.
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