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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Accounts Receivables vs. Account Payables: Knowing the Difference
Accounts Payables & Accounts Receivables
When first beginning to work with a new accountant, two common terms you will want to become well acquainted with are accounts payables and accounts receivables. Accounts payables are used to describe money which comes in and money which comes out of the business. An example of accounts payables could be computers or any other products and or goods.
Accounts receivables are the amounts a company can rightfully collect partly as a result of goods the company has sold or serviced on credit to a particular business or customer. In most cases, accounts payables are liabilities and accounts receivables tend to be assets.
Concrete Example
As an example of accounts payables, let’s pretend that your company has recently sold merchandise to another vendor on credit. Your company’s responsibility is to record a sale and from there record a receivable. The entity with whom you conducted business will then record a purchase and then also record an “account payable” and from there you will see a true accounts payable and receivable.
Means to Keep Track of Things
A good way to shed light on accounts payables and accounts receivables is to look at the old proverb which talks about the importance of giving and receiving. In a nutshell, it is a process which was designed to ensure that things don’t get lost in the translation of selling and buying which so often occurs.
These are also probably two very important daily items which any good accountant will constantly hassle you over to ensure you’re not getting lost or mixed up in the shuffle.
What other ways has your accountant worked with you on accounts payables and accounts receivables? 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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Five Pitfalls You Need to Avoid During Tax Season
Pitfalls of Tax Season
Tax season is rough simply of its nature, and so the last thing most people need is any additional sources of headache during this time of the year. There are a number of pitfalls, unfortunately, which you need to work hard to avoid during tax season so that your stress level doesn’t go through the roof. Here are five things you want to avoid in order to make tax season as easy and painless as possible:
Writing Off Personal Expenses as Business Expenses
Writing off personal expenses as business expenses could be a slick way for individuals to save a little extra money during tax season; however, this sends a huge red flag to the IRS and could ultimately lead to you being audited by Uncle Sam.
IRS Form Errors
Not sure if you’re filling out your tax forms correctly? It’s important that you go the extra mile and be certain of the accuracy of your forms. If you’re not sure about an item on your IRS form, consult a CPA or a tax preparer so that he or she can help you navigate the tax process.
Not Reporting Cash Businesses
Cash businesses are often watched closely by the IRS. Cash businesses are often places like restaurants, car washes and hair salons. If you are reporting your business to the IRS, make sure you’re also tracking the cash you receive to ensure that you’re not underestimating your earnings each year.
Missing Tax Deadlines
Do you miss tax deadlines year after year? This may cause the IRS to wonder what you may have to hide year after year and could ultimately lead to you being audited by the IRS. Missing tax deadlines shows not only inconsistency but it also signals that perhaps you don’t know what you’re doing. Hiring a CPA could be what helps you stay on track with deadlines in the future.
Misclassifying Workers
Classifying your full-time workers as part-time or contract workers is a major “no,” especially when dealing with the IRS. By misclassifying workers you may not only be putting your employees at risk for being audited but also your business which could ultimately lead to major repercussions.
What tax season pitfalls have you seen or heard of? Leave your comments below.
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Three Questions to Help You Decide between a CPA or Tax Return Preparer
Tax Return Preparer vs. CPA
Every year, many business owners struggle to properly answer the same recurring question: should I hire a CPA or a tax return preparer? The best answer to that question is that it really depends on a variety of things, and sometimes resolving this dependence requires a bit of mental horsepower.
Here are three questions you should ask when you determine if you should hire a CPA or a Tax Return Preparer:
How Much Time Do You Have?
If you don’t have a ton of time to waste, your best bet is probably to hire a tax return preparer. In most cases, these people can be found at your local library, helping you file your taxes for free (or prepaid with your tax dollars; however, you choose to view it). If you aren’t short on time and really feel as if you need to have your finances audited while having your taxes filed, a CPA may be better for you.
How Much Money Do You Want To Spend?
Because there are so many free ways in which you can get a tax return preparer, whether or not you decide to use a return preparer or a CPA depends solely on how much money you wish to spend. If you wish to save your dollars, then hiring a return preparer is best. If you don’t mind paying the hourly rate or retainer to guarantee that your taxes are done correctly, then hire a CPA.
How Much Does Performance Matter to You?
If you want to feel secure that your taxes were done right, and also that you received the maximum number of tax benefits, consider hiring a CPA. While a tax return preparer is trained to do your taxes the right way, in many cases they are civilians working as volunteers with the IRS. CPAs are in some cases certified at a higher level to help with tax preparation.
Which do you prefer: CPA or tax return preparer? Leave your comments below.
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How to Find an Affordable CPA
Finding an Affordable CPA
Finding an affordable CPA isn’t always easy, but there are ways to find an affordable CPA who benefits your business and also saves your bank account from being brought to ruins. Here are just a few tips to finding a capable and affordable CPA:
Referrals
Ask your friends, family and other business associates which CPAs they have hired in the past. Asking for referrals is one of the best ways you can make certain that you are getting what you are paying for because you have someone who has a working knowledge of the person you are looking to hire.
Barter
Do you have a service you can offer a CPA? Perhaps you are a marketing professional or a salesperson. Whatever the case may be, consider bartering your services with your CPA to help lower the price of the services your CPA will charge.
AICPA
The AICPA (which stands for American Institute of CPAs) has a list of resources available on its website which can help you identify the best CPAs in your area. This organization is actually the world’s largest association representing the accounting profession and is a great place to start if you can’t rely on referrals or bartering.
Local Library
Believe it or not, your local library is full of resources which are designed to help people find services needed by their company. Some local libraries even have areas where they connect businesses with CPAs and other service providers who are able to provide pro bono services to small businesses or low-income families.
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Four Ways You Can Make Your Accountant’s Job Easier
Accountants & CPAs
If an accountant has a natural ability with numbers and mathematics, it may be tempting to assume that his work is relatively stress-free. And while it may be simple to assume that an accountant’s job is already “easy” in such cases, there are still a few ways that you can make your accountant’s job even easier. Remember, the better your accountant’s situation, the better off you will be.
Be Transparent About Your Business Finances
Whether you tell your accountant about all of your business transactions or just certain of them, they will find out the full truth eventually, and instead of making their job harder by giving them sudden surprises you should be as transparent as possible. Your accountant is literally on your team to help you save and better manage your money, but he or she cannot help solve what they don’t know.
Coming to Business Meetings Prepared
Many accountants charge by the hour, and if you come into a meeting unprepared you’re going to end up spending money just to be ready to speak with them. Do you have all of your financial documents? Bring them. Do you have new receipts? Bring them. Thinking about making another big purchase? Know and share the price. Never underestimate the power of being prepared.
Take Your Accountant’s Advice Seriously
If your accountant gives you advice you can be willing to bet that the advice he or she gives you is not just for the sake of giving advice. Your accountant may not know every detail of your business, but they were hired specifically to help you and your finances. Taking the advice of your accountant seriously could not only save your business money but it could also save you from having to clean up messes in the future.
Consult Your Accountant on Financial Matters
No financial matter should be kept secret from your accountant. Every financial issue should be disclosed, including large purchases, alimony and child support, business lunches, charitable donations, employee bonuses, new hires, etc. While it may seem overbearing to always have to check in with your accountant, it’s important that you share these things with your accountant freely and completely because he or she can tell you what you can or cannot afford to do in the moment.
What successful ways have you found that make your accountant’s job easier? Leave your comments below.
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