Too often does our firm come across small business owners who want to save as much money as they can by consulting their neighborhood accountant or tax preparer to take care of their Accounting and Tax services in a days worth of time. They assume that these “professionals” know exactly what they’re doing and are good at it based on the nice sign outside their office. They have not checked their credentials, made sure they are complying with the law, and most importantly the efficiency of their work. 99% of the time, the small amount that these business owners are paying truly reflects in the quality of the work performed. Think about it this way, would you rather purchase a cheap refrigerator that you will have to keep fixing and will give out in a few years, or would you prefer a reasonably priced refrigerator that will last 15-20 years longer? If you are being cheap about keeping your financials in order, you are cheap about the future of your business and are impeding it from growth.
The first thing to do when hiring an accountant is to check their credentials. Are they an accountant because of their degree in college or because they took a few QuickBooks courses? To become a CPA, a professional must spend a grueling year learning the backbones of Finance, Regulation, DCAA Audit, and Business. It is only a small percentage of the US population that can pass each of these tests the first time around. Once they do earn that title, the education is continued to maintain it with constant updates to the new regulations set forth by the Government every day. How can you trust that you won’t get audited by the IRS if your accountant does not know what the IRS is looking for?
The next step after your candidate passes the credentials test is to evaluate their work. Once the first month of work is completed, ask them to explain to you how he came up with the numbers in the financial statements. The least you can do on your own is to make sure the expenses match up to your bank statements. The Internet is a powerful tool that can help you ask the right questions. Are you getting all the possible tax deductions you can? Do your homework and search for commonly overlooked deductions that you can point out at your next meeting.
The third step is to create a plausible time frame for the completion of these tasks. If you are a business owner, be aware that you have more expenses as well as multiple channels of income that an individual does not have. With that said, a corporate tax return should take at least a week to complete efficiently. Make sure that the accountant or CPA understands the structure of your company completely and has filled out the ownership section properly. In regards to an individual tax return, that can be done in a few hours provided you have with you your bank statements or receipts with your expenses. Once again, make sure you are receiving all the deductions and that you are meeting the tax deadlines.
Most importantly, do not take shortcuts with your finances. In our society, we believe that time is money and you don’t want to waste either of those. If you are spending under $500 on your Bookkeeping and Tax Services, then the bookkeeper is not spending enough time on your account and is not making any sort of effort to ensure every number is correct. They will be more interested in making quick cash and getting more from the next client. A good CPA on the other hand, values each client they have and does not want to risk either you or them getting in trouble with the law. Your CPA is familiar with all the regulations and is there to help you follow them. Their Financial Consulting Services do not just process the numbers for you but also explain how you can improve them and where you can be saving more money. Your CPA will think outside the box and find tax deductions where you did not even realize you had them.
Be realistic with your expectations. It is illegal to evade paying taxes, even if you file an extension. If your tax preparer says he can do this, you better be aware he is breaking the law. Your CPA will be familiar with not only your numbers but the way your run your company as well and they will be your best source of advice when it comes to important business decisions. Would you let a non-licensed doctor operate on your newborn infant? Then why let an inexperienced accountant take care of the finances of your business? Find a CPA who fits your budget and who you can consult on all areas of your company.