How Your Business Can Survive a Tax Audit?
Tax Audit
The Internal Revenue Service (IRS) conducts tax audits on businesses and individuals each and every year to ensure that all (taxable) income is reported. A tax audit can be a frightening process, but it can be easier to navigate if you have the information you need in order to navigate through the audit successfully.
Here are a few tips to help your business survive a tax audit:
Hire a CPA
One of the easiest ways your business can survive a tax audit is to simply hire a CPA. Hiring a CPA can help you navigate through an audit in the easiest way possible by offering advice on how to properly deal with the IRS.
Don’t Delay the Audit
One of the worst things you can do when being faced with a tax audit is delay the audit. Attempting to delay the audit will throw red flags up to the IRS that you are attempting to cover up something in your taxes.
Have Realistic Expectations
This is not going to be an easy process, but you must have realistic expectations. Realistic expectations means you must come in with all your documentation and also all your paperwork in order to avoid red flags that may make it appear you are attempting to hide something.
Stay Calm
I know this may be hard to do but the best thing you can do is to stay calm. Don’t overreact and just comply with the IRS in every way you can. It’ll be worth it in the end.
How have you survived your latest tax audit? Leave your comments below.
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How to Find the Best Small Business Accountants in My Area
Accountants in Your Local Area
Hiring an accountant for your business is not always easy, and finding a suitable accountant who is located close to you is even harder; these things are why many small businesses become so frantic during their search for an accountant. While it’s not imperative that your accountant live near you, it is helpful to have an accountant on staff who can readily drop into your office in case of an emergency, an audit or any other critical time in your businesses’ life cycle.
So how do you find the best small business accountant near you? Here are a few ways how:
Ask
One of best ways to find a small business accountant near you is to go the old fashioned route and ask around. Ask your friends or family if they know any accountants who can be of assistance to you and your business.
Local Associations
Local associations are another great way to find great accountants near you. Not only can they recommend accountants but in many cases they can also offer accountants who are certified in accounting as well.
Google Search
Yes, Google is still one of the greatest ways for your business to find accountants in your area. Google offers an exciting feature which allows you to turn your geographic location on and find the best accountants who are also close to you.
What other ways do you use to find small business accountants in your area? Leave your comments below.
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Three Big Signs You Need a New Accountant
Signs You Need a New Accountant
Hiring an accountant can be extremely challenging, but it can be even more challenging to let go of your current accountant and find a replacement. Because we know how hard it can be, we have created a list of signs you should look for to help you determine when it’s time for a new accountant:
You Aren’t Getting What You Pay For
There is nothing worse than hiring an accountant, or anyone else, to do a job and then seeing your new hire either perform poorly or failing to provide you with services you paid for altogether. Substandard performance should be a major red flag, especially for accountants as many accountants are paid by the hour, and if they aren’t doing the work you’ve paid them for it may be a sign that they are attempting to financially swindle you. Before paying for any services from an accountant, make sure you draft an agreement which lays out in precise terms the various services and duties they will perform for you.
They Refuse to Show You Financial Statements
Your financial statements are important indicators of the financial condition of your company. You should always have access to your statements at any given time. If your accountant refuses to show you your financial statements, it should be a red flag that either they’re not doing their job or that they’re attempting to hide something that they don’t want you to see. Either way, this is a sure sign that it’s time for you to move on and pursue another candidate.
File Tax Returns Late
You can mess things up all by yourself, literally. If your accountant has a bad habit of filing tax returns late, it’s time for you to ditch him or her and simply begin to take things into your own hands. Filing your tax returns late could have severe consequences for both you and your business.
What signs prove to you it’s time to find a new accountant? Leave your comments below.
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What Not to Ask Your Accountant about Your Business Plan
If you’re a business owner of any sort, your accountant should be your guide to practically any and everything surrounding your finances. For things beyond your finances, however, your accountant isn’t necessarily someone you should look to for guidance. It’s important for your accountant to have a good look at your business plan; however, it’s not imperative that your accountant write it.
Business Plan
Here are just a few things you should never ask our accountant about your business plan:
To Develop Your Mission Statement
As much as your accountant will want to make sure he or she is involved with your business plan, your mission statement should be one of the things over which you have solid control. In fact, if you don’t know what your mission statement is, or even the purpose of your company, perhaps you aren’t ready to hire an accountant just yet. A great philosopher once said: “if you don’t know where you’re going, anywhere will get you there.”
To Write Your Business Plan
An accountant is there to help you handle the financial aspects of your business plan, not write it. That’s what a business plan writer is for, specifically to help guide you as you write your business plan. If you feel your accountant should do it, perhaps you need to revisit what an accountant’s role is.
How Much Money You Need to Spend
While your accountant can help you as you determine what you should and should not invest in financially, they can’t be babysitters for your business. Ultimately, how much money you spend depends solely on you and your business partner (if you have one).
What questions do you feel should be off limits to your accountant? We hear some pretty entertaining stories so leave your comments below.
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How to Determine if an Accountant be Right for You
Picking the Right Accountant
Hiring for certain jobs can often feel like a full-time job. From job postings to interviews and background checks, hiring for some positions can undoubtedly be a strenuous process. Despite how long and annoying this process can be, there are actually alternative ways to determine if an accountant be right for you.
Check their Credentials
Always check any new candidate’s credentials. Believe it or not, we live in a society where lies sound better than the truth even on resumes. Some people will even go as far as lying about where they obtained their degrees. This alone could hurt your business because it means you are hiring someone who is not qualified.
Ask for References
If you really want to know how a person works, ask their previous clients. These references will not only give you the good, bad and ugly, but they may also be able to offer advice on how to work with your new candidate.
Ask for their Niche
Every professional has one niche which they have more experience in than others, and the same is true with accountants. Find out whether your accountant has experience in your particular industry.
Be Transparent About Your Expectations
During the interview process, you should always be transparent about your expectations. If you be transparent, then candidates will know from the beginning if they even wish to work with you further. If you try to keep things under wraps, however, you risk deceiving potential employees.
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The Three Steps of Finding the Best Accountant for Your Business
Finding the Best Accountant
Finding the best accountant for your business may seem relatively easy, but it can actually be a very significant challenge. There are so many variables to consider when hiring an accountant, and occasionally these variables can make finding the right one a huge headache. Below is our three step plan on finding the best accountant for your business:
Contact Your Local Accounting Association
If you’re looking for the best of the best, you may want to contact your local accounting association. They can connect you to the best accountants in the area and they can also connect you to accountants who are certified to work in your industry. Utilizing professional networks is great for businesses, especially when you are new to an area and are afraid of hiring an accountant who may be trying to scam you out of your money.
Ask Your Friends
One of the best ways to ensure that you’ll get a job done is to ask your friends. Your friends will always be a great reference, especially if your friends work in a similar industry as you do. Your friends can also help you determine who may or may not be a good fit for your business. This is because, in many cases, an outsider has more insight on your business than an insider.
Interview
If you enjoy being hands on and don’t like the idea of not being in control, you may want to go the old school route and simply just interview your next accountant; by interviewing, you can help guarantee that you are weeding out the bad apples in the bunch who may be trying to win your business over by using a lot of unnecessary accounting lingo.
How have you been able to find an accountant in the past? Leave your comments below.
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How Much Does a CPA Cost for a Small Business?
The Cost of a CPA
When most people think about hiring a CPA, the first thing that comes to mind is that it will be expensive to hire such a critical member of your team. Though thinking about hiring a CPA can be overwhelming, it doesn’t have to be. Here are a few things to which factor in to how much a CPA is likely to cost a small business:
What Will You Need Your CPA to Do?
CPAs are qualified to help you in a plethora of ways, including business growth, increasing access to capital, filing taxes and so much more. Because of this, you will want to determine what you will need your CPA to do prior to hiring them. Establishing these guidelines will help your CPA determine how much he or she will charge you for his services.
Will They Be Full-Time, Part-Time or Contracted?
Just because you hire a CPA doesn’t mean you have to hire them as a full-time employee. It’s possible to bring on a CPA in a variety of ways. Because of this fact, you should determine immediately what type of employee he or she will be. This will not only help you once tax season arrives, but it will also help you in establishing your working relationship.
Will They Be Hired Only To Do Your Taxes?
Will your CPA be hired only during tax season? If so, your CPA may charge you an hourly fee or a flat rate. Again, you will want to establish ground rules before beginning a business relationship with him or her.
What City/State You Live In?
As with anything else, where you live plays a critical role in how much services will cost for you. For example, a CPA in Little Rock, Arkansas may not be even half as expensive as a CPA in Los Angeles, California.
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When is the Best Time to Hire an Accountant?
When Should I Hire an Accountant?
In general, hiring an accountant is a difficult process. There are many factors and variables which have to be considered when deciding whether or not a given candidate should be hired. Whenever possible, business owners should take the time to integrate bits of wisdom on hiring an accountant so that the whole process can be simplified.
Toward this end, here are a few nuggets of wisdom which will help you to figure out what time is the proper time to hire an accountant. Knowing when to hire an accountant is oftentimes as critical as knowing who to hire. The nuggets are as follows:
During Business Growth
Is your business growing at an impressive rate? Now is the prime time for you to hire an accountant. They can help you navigate the finer details of your business growth and make sure you don’t blow your success before you have the opportunity to fully enjoy it.
When You First Start a Business
You may not think about it, but when you first start a business you desperately need to hire an accountant. Your accountant can help you get your finances and bookkeeping organized before the real hustle and bustle of your business begins.
When You Hire Other Employees
Are you ready to hire a new employee? There is no time like the present time to go ahead and hire an accountant. Hiring an accountant when you’re ready to hire other employees will ensure that you don’t lose a ton of money by taking on a new employee the wrong way or before you actually have the money to pay them.
Before You Need One
Don’t wait until you desperately need an accountant to hire one. In most cases, waiting until you need one means you’re probably too late. The sooner you can afford to hire an accountant, the better. If, for some reason, you can’t afford to pay an accountant, find one who can offer pro bono work or even see if you can barter your services.
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How an Accountant Can Help a Business Succeed
Business Success
If you are a small or large business owner you have probably spent a significant amount of time trying to figure out how to make money, how to save money and how to sometimes simply break even. While crunching numbers is incredibly important, it’s also important that you try not to do it on your own and instead hire an accountant.
Here are a few ways your accountant can help your business succeed.
- Ensure you are following accounting regulations both nationally and locally.
- Give insightful advice on how to better track your expenses daily, monthly and quarterly.
- Give advice on how to separate personal and business expenses.
- Review all employment documentation to make sure that freelancers and contractors are classified properly.
- Properly teach employees on how to read your financial statements.
- Monitor payroll procedures.
- Help provide advice on all tax payments.
- Determine who’s responsible for mailing out W2 and 1099s.
- Close out all financial statements, reports and assets by the end of the year.
- Make sure all IRS paperwork is submitted on time.
- Point out all areas of growth or decline within your business
- Help facilitate purchases inside or outside the business.
- Work with you on IRS auditing prevention.
- Be willing to stand by your business during audits.
- Help you budget for your business.
- Help financial forecasting.
- Provide business advice.
Image credit: GotCredit.com
Four Ways Your Accountant Should Be Using Math to Help Your Business
When people think about an accountant, one of the first things they think is that he or she must be good in math. While not every accountant is a superb mathematician, it is true that accountants do use math to assist their clients in various ways.
Math & Accounting
Here are four examples of how your accountant can use his or her math skills to help your business:
Production Costs
Before you can take your business to the next level, you must determine how much it will cost to actually run your business. These calculations are considered production costs. Hiring an accountant will help you determine not only what your pre-production costs will be but also how much it will cost your business to be sustainable for years to come.
Pricing
While most companies try to determine their pricing strategies alone, this is not recommended. It’s recommended that you hire someone specifically to help you with your pricing and that person could be an accountant. An accountant can work with you to determine how much you should price your goods and services in order to obtain a profit or to help you break even.
Profits
Profits are just as important as pricing, which is why it’s a skill that many accountants should have. They can work with you to both forecast future profits and also forecast your return on investments.
Analyzing Finances
In order to fully analyze how your business is doing, your accountant should be using math to help you determine your revenue and expenses. It is vitally important that you keep your records up to date in order to ensure that you are staying on top of sales increases and decreases.
In what other ways do you expect your accountant to use math? Leave your comments below!
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