Hiring an Accountant: What Small Businesses Need to Know

hen it comes to running a small business, every penny counts. But who is counting those pennies?

Sixty-four percent of business owners don’t feel knowledgeable about accounting. That’s a considerable amount of uncertainty about a subject critical to the health of a business. Hiring an accountant for a small business — whether you hire them as a full-time staff member staff or on a contract basis — can give you peace of mind about your finances while enabling you to make more informed business decisions.

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What does a business accountant do?

A business accountant oversees bookkeeping, deals with financial paperwork, and helps your business handle its cash flow. A certified public accountant (CPA) can also provide financial advice to your business, from telling you what constitutes a write-off to helping you make important spending and saving decisions.

The greatest benefit of a business accountant is the breadth of knowledge they bring to the table. CPAs have gone to school and passed licensing tests to prove they are experts in their field. They are qualified to provide your business with financial advice and to process your financial documents.

CPAs often specialize in a certain field — such as small business accounting, auditing, or tax accounting — and can help you keep your financial records in order. If ever you were to be audited, an accountant would help you supply the right documents to the auditor.

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Should you hire a small business accountant?

When considering whether to hire a business accountant, ask yourself if there are any specific financial issues you need help with. Whether you’re starting a new business, growing an existing business, or facing a particular challenge in the workplace, hiring a business accountant can help you regain control of your finances and strengthen your business.

Not every business needs a full-time accountant. But there are certain times during your business’s life cycle when working with an accountant can be especially helpful. Some of the key times you may want to consider hiring a business accountant include:

• You need help creating a business plan
• You’re starting a new business and want to ensure you understand your financial responsibilities
• You need help figuring out your business’s legal structure
• You’re preparing to file your taxes
• You’re struggling with cash flow issues and need a better understanding of your inflow and outflow
• You need a better system for tracking your finances in general

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How do you find the right accountant?

Once you’ve decided to hire a small business accountant, the next step is to find the right person for the job. Because there are many accountants with many different skills and specializations to choose from, searching for the right accountant can feel overwhelming. The key is to use a combination of research and recommendations from your network. Then conduct interviews to narrow your options down and find the right candidate for you.

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Consider recommendations from other small business owners

Ask the people in your network if they have recommendations for accountants. Speaking to other small business owners about their experiences can be a great way to find the right accountant for your needs.

If you don’t know anyone you can ask for a personal recommendation, you can read online reviews. Although you should always take reviews with a grain of salt, a trend of mostly positive or mostly negative reviews can help you decide which accountants are worth carrying forward to the interview stage.

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Research potential accountants online

The next step when finding a small business accountant is to research accountants in your area. The number of potential candidates will depend on your location. Keep in mind that hiring a virtual or remote accountant is always a possibility. But if you’re going to go that route, make sure you understand the benefits and pitfalls of hiring remotely for this key position.

While hiring remotely helps you save on costs like getting more office space, it also means your accountant isn't in the office to help with day-to-day bookkeeping and file management. Remote workers may also be more likely than in-office workers to struggle with email fatigue, which may mean you have to wait longer for responses.

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Schedule consultations with potential accountants

Once you have a handful of options for a small business accountant, bring them in for brief interviews. Meeting with potential accountants in-person or online can help you evaluate their soft skills — such as communication — and get answers to some of your most important interview questions.

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Interviewing potential accountants

As with any interview, when you interview potential accountants, you need to decide if they’re the right fit for your company while also helping them get a feel for your business. The best way to do this is through open and honest communication.

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Questions to ask

Some of the best questions to ask accountants during an interview include:

• Why did you choose to become a CPA?
• What accounting software do you usually use?
• Can you explain different account types?
• Can you explain some different budgeting methods?
• What’s one way you anticipate being able to help our business financially?
• How do you stay apprised of changes in business tax laws and regulations?

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Discuss your accounting needs and expectations

The first step when interviewing potential candidates is to make sure you’re on the same page about what your business needs from an accountant. Since CPAs wear so many different hats, be direct about what your business is looking for and how long a contract would last. This allows CPAs to figure out if they would be a good fit for your business and will help you focus on hiring an accountant who has the right skills for the job.

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Qualifications, traits, and skillsets to look for

At a minimum, you want your small business accountant to have relevant certifications. They should be CPAs with the documents to prove it and should have an advanced degree.

Also, you want to look for a CPA with effective communication skills. Accounting is very technical and can affect all aspects of your business, so it’s critical that your accountant is able to communicate effectively and get their point across without resorting to complicated jargon.

Your accountant should also be able to do the following accounting and bookkeeping tasks:

• Track accounts receivable and accounts payable
• Manage payroll, including employer and employee tax records and payment records
• Clarify and streamline business records and transactions
• Keep business status and government registries up to date
• Ensure your company is current with any changes in business tax laws and regulations

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How much does it cost to hire an accountant?

While the cost to hire an accountant varies, accountants charge, on average, around $37 per hour for their services. However, that average rate varies widely, with some accountants charging far less and others charging upwards of $400 per hour for their services. Accountants tend to charge more if they have a master’s degree or other advanced certifications or if they have been in the business for a significant amount of time.

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Takeaways

Hiring an accountant is a smart move for most small business owners. When you hire an accountant, you make an investment in proper bookkeeping and fiscal management. It may make sense to hire an accountant by the hour when your business is just starting. But, as your business grows, it may make sense to bring a full-time accountant onto your team. Full-time accountants are better able to be proactive rather than reactive with your finance management, which can lead to long-term financial success for your business.

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Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.