By: Dynamic Business
Confusing isn’t it?
Financial planning isn’t something most businesses know how to do well. But, a CPA can be a great addition to your team – keeping you out of legal and financial hot water. Here’s how to hire a bean counter that you can count on.
Why You’d Want To Hire One
There are many reasons why you might want to hire an accountant. First of all, accountants are professionals when it comes to money management and accounting. They can look at your balance sheet and reverse engineer many problems that you may not be aware of. The accountants who work at Brown Smith Wallace, for example, can help you
- Figure out the best business structure for you based on your revenue, profits, liability risk exposure, and other factors.
- Help you with financial analysis in your business plan.
- Give you advice on the type of accounting software you need.
- Give you advice on how to open a business checking account.
- Give you advice on how to track expenses day-to-day.
- Explain the importance of keeping your business and personal expenses separate.
A good accountant can also help you day-to-day by doing things like
- Making sure your independent contractors are classified properly so you don’t get into trouble with the IRS.
- Help you understand your financial statements so you understand the ins and outs of your company.
- Make sure payroll is on-point and complies with all federal and state laws.
- Make sure that you’re making all tax payments on time.
- Make sure you are sending out W2s and 1099 forms to the right individuals.
- Help you close out your books and create the necessary year-end reports.
- Help you compile and submit tax forms and reports.
But, it gets even better. An accountant can also help you during the growth stage of your company by:
- Making sure you have a good handle on your cash flow patterns, inventory management, pricing, and financing.
- Give you good advice on property and equipment leasing.
- Help you stay out of the crosshairs of the IRS.
- Help you prepare for a tax audit if it does happen.
- Help you create financial forecasts so you can make better financial decisions.
- Help you create a business budget that supports your business goals.
- Help you with advice and resources when you want to sell your company
When It’s Time
When you’re first starting out, you probably don’t need someone to manage your books for you. But, the volume of business grows quickly, and pretty soon you can’t handle it yourself. You need a bookkeeper or accountant.
Start by looking for outsourced solutions. If you can’t afford a full-time accountant, you should at least look at a part-time one or an outsourced accountant.
Hiring an outside consultant or accounting firm is a good first step if you’re growing, since it allows you to maintain focus on what you’re really good at and allowing someone else to handle the finances. Of course, you can’t totally ignore finances, but you can outsource most of the stuff you don’t understand and aren’t good at and be just fine.
An outside firm will usually do things like handle your taxes, and they may even do some bookkeeping for you. They usually can’t provide extensive financial advice, however.
Hiring In-House
When your business grows, and you outgrow the outsourced solution, it might be time to bring someone in-house. Since an outside consultant’s fee grows with the size of the business, you might end up paying more than you would if you just hired someone directly.
So, if the costs are greater to outsource, then hire an accountant to work directly for you.
An in-house consultant can do so much more than an outsourced firm, too, like:
- General ledger and account maintenance.
- Be responsible for daily transactions.
- Prepare financial statements.
- Do cost accounting and variance analysis.
- Do treasury and cash management, including bank reconciliations.
- Do payroll for you.
- Consult with you on various financial management strategies.
- Audit your company’s finances to weed out waste and fraud.
Make Sure Your Accountant Is Certified
A CPA or certified public accountant, has an undergraduate degree and has passed an exam. He or she also has the experience to help you navigate the tax landscape and manage your books. CPAs have to take continuing education courses to remain certified and licensed.
A Certified Management Accountant (CMA) is trained to handle complex accounting tasks and even serve in a managerial role. He or she must meet certain minimum accounting requirements for businesses, must pass an exam, and must have business experience and keep up with continuing education requirements. CMAs also may obtain other designations, and be Accredited in Business Valuation (ABV) or a Certified Valuation Analyst (CVA), or a Personal Financial Specialist (PFS).
These professionals are adept at valuing your business and telling you how much you may be able to sell it for.
Source: Dynamic Business
