How To Find A Small Business Accountant

Accounting is how a business organizes, records and interprets its financial information. It provides an overall view of the financial health of an organization, and includes components such as transactions, taxes, budgets and projections.

Small business accounting mirrors this definition, but usually pays special attention to even the smallest details, since for most small businesses, every dollar counts and needs to be noted. Tracking the money that flows in and out of your small business is an essential piece to ensuring that you not only stay afloat, but also continue to grow successfully.

Accounting vs. Bookkeeping

Although the terms accounting and bookkeeping are often used interchangeably, they are actually two very different processes. Accounting examines the broader picture of a business’s finances, performing such functions as tax preparation and filing, applying for loans and helping to create a business plan. Bookkeeping focuses more on the daily financial operations of an organization, which includes recording transactions, reconciling statements and managing payroll.

Small business accountants are professionals, often Certified Public Accountants (CPAs), who have the experience and knowledge to help owners navigate through their financial records. Depending on the size and needs of the business, these accountants may work on a monthly, quarterly or annual basis. While larger companies often keep accountants on staff, small businesses typically contract with an accounting firm or independent accountant who offers the services they need.

Tasks Small Business Accountants Handle

You may already be using a bookkeeper or a bookkeeping program to stay on top of everyday business finances. Bringing on a small business accountant means partnering with someone who will take all those numbers, analyze what they mean and offer you important insights. Small business accountants handle numerous tasks, including:

• Tax return preparation, filing and amendments
• Identifying eligible tax deductions
• Preparing financial statements, such as balance sheets, income statements and statements of cash
• Account maintenance and management
• Help maintain a steady cash flow
• Payroll and fixed asset accounting
• Financial forecasting
• Financial analysis and advice, including potential areas for growth

A search for “small business accountant” will net thousands of results, and attempting to wade through them all would be a challenge. Start by crowdsourcing and asking other small business owners who they use and trust with their finances. Once you have several names, complete some internet research on their background and experience, and read any available reviews.

Another option is utilizing the American Institute of CPAs’ directory or the National Association of State Boards of Accountancy, which allows users to search by state and region.
Reputable small business accountants and accounting firms should have no problem setting up an exploratory meeting to go over your needs, as well as provide several references.

Must-Haves When Choosing an Accountant

First, you’ll need to determine what functions you want an accountant to assist with, as well as how often you’ll require their services. Start by making a list of priorities—the items that need attention right away, and the ones that will need to be addressed within six months. Next, you’ll have to pick if you want to work with an independent accountant or an accounting firm. No matter which you opt for, you’ll want to select someone who has plenty of experience with the type of small business you have and who you feel comfortable sharing sensitive information with.

Accounting Firm, Contractor or Employee?

Most small businesses don’t need a dedicated employee for accounting. Having a member of your team who handles everything financial might seem tempting, but remember to factor in the salary and benefits you would be responsible for providing. Your two main choices will likely be an accounting firm or an independent accountant who you contract with.

If you’re on the fence about the best option, schedule interviews with both and get a feel for how they work. Before making a final decision, think through what exact services you need and what your budget is, along with:

• The upfront and continuing costs for an accountant or accounting firm
• Their availability and office hours
• Their experience working with businesses such as yours
• Their communication methods
• In the case of an audit, can they represent you in front of the IRS?
• Will you be working with the same person all the time?

Red Flags To Watch For

Unfortunately, there are accountants who seem ideal on paper, but aren’t exactly what they appear to be. While shady accounting is never good, it can be fatal for small businesses. You’ll need to take every precautionary step possible to prevent working with the wrong person, which includes interviewing, asking for references and completing a background check. You’ll also want to stay active in your accounting processes and watch for red flags such as:

• An accountant who tells you not to bother keeping receipts
• Being asked to sign documents or checks without knowing what they are for
• Not receiving an estimate for services until after your tax refund has been determined
• Communication drops off or stops completely

If your small business doesn’t include piles of paperwork and boxes full of receipts, you may want to consider handling your accounting yourself. There’s no shortage of excellent, affordable software options on the market and we’ve done the legwork to research the top choices for you. Check out our reviews of the Best Accounting Software to find one that will work for your needs.

Bottom Line

While opting to hire a small business accountant will cost you money, it can also save you a lot in the long run. Unless you are a CPA who is up to date on tax laws, you’re likely missing out on deductions and other small biz benefits. And once your business starts growing, you likely won’t have the time or knowledge to accurately keep track of all your books.

If you are just beginning your business journey and don’t have any employees, starting out with some reliable accounting software and a solid organization system will likely be enough to keep you afloat for a while. But once expansion begins to start, don’t delay on finding a good accountant who will keep your best interests in mind.