You’ve probably learned some basic accounting techniques – after all, it is your livelihood we’re talking about. It’s in your best interest to know as much as you can, but you might have a banker with whom you have already established a relationship. At some point, however, you are going to need help, specifically professional accounting help.
So, how do you go about finding just the right person for such an important role in your company?
You don’t want to make a mistake and overspend, nor do you want to hire someone who is still being trained and won’t give you the help you are expecting. Furthermore, an undertrained accountant can do more harm than good. They could make a mistake that could cost you money or you may have to constantly check their work. So you should definitely shop around and choose wisely. You want to be confident in your selection and get the highest value possible.
What Type of Accounting Help Should You Seek?
What level of expertise do you need? At a base level, you can hire a bookkeeper to pay bills and handle receipts. You can also hire one with more experience who can summarize bookkeeping activities for tax reporting. Or, you may want to consider a “higher level” of assistance, an accountant from a full-service firm who can provide all the accounting and support services that a medium-sized company requires.
You can hire an enrolled agent who knows taxation and has passed the taxation test given by the Internal Revenue Service (IRS). Or you can choose a Certified Public Accountant (CPA) who has financial experience in many areas. An investment in a CPA-based firm should be worth it to your business (and to you personally) in the long run.
Accounting Basics to Manage
You know about the balance sheet, income statements, and cash flow. You can probably read the annual reports from public companies. You may have decided on the accounting method to use – cash basis or accrual. But there are other important areas you need to know about.
You may need to know about investments, imports and exports, IRS issues, pension schemes, and shareholder agreements, to name a few. You might be eligible for a small business loan or tax incentives for hiring minorities. You might need internal business controls to prevent fraud, shoplifting, or wasteful practices. When you are ready for these financial considerations, having a knowledgeable accountant and/or accounting firm is invaluable.
A good accounting software program can automate many processes, save time and provide greater accuracy. Voluntary and statutory audits can help you manage risk and ensure financial compliance with any established regulations. A good accounting firm can advise you on what level of service you should have.
Your business will get better if you hire better people. If you go to a reputable firm for an accountant, you will be putting your business management in good hands. Whether you are a limited company, partnership, sole proprietorship, charity, or a not-for-profit organisation, there is an accountant and firm that are right for you.
Establish a Relationship with Your Accountant
Once you have found the right firm, and the right person that’s the best fit for you and your business, build a relationship of open communication and trust. Tell him or her what you expect, and share whatever information you think would be helpful. The new employee might not be “family,” but you can make them a welcome member of the “team.”
You motivate your team by providing clear goals and direction, ongoing guidance, and recognition for hard work and achievement. Different team members are motivated in different ways. In addition to the obvious allure of compensation, simple recognition and appreciation go a long way toward team success. This works for accountants, too.
Financial Fishing
There is no need to delegate all financial responsibility to the accountant. You should continue to learn as much as you can about how finances are kept and ask the accountant to explain anything you don’t understand. Accountants are a great resource for not only keeping the books up to date but also for teaching you how to do it.
The Greek philosopher Maimonides said “Give a man a fish and you feed him for a day; teach a man to fish and feed him for a lifetime.” Have your accountant teach you how to fish, financially.
So the accountant has his or her own work to do for you. They are teaching you some tricks of the trade. There is another way that your accountant can help you, and that is acting as your financial consultant. When you have an important decision to make, ask him or her for their opinion. What effect will your decision have on the business, both short-term and long-term? Is there a better decision which can be made? It never hurts to get a second opinion, and it might help a lot.
By partnering with the right firm and the right accountant, you will be developing the best business practices and taking advantage of all available assistance. You will hire someone who can help you run the business, teach you about financial management, give you good advice, and protect you from unseen and unanticipated threats to your business growth and overall success.
For More on Financial Statements and Business Plans
For more on how to create financial statements and projections see my course, Accounting & Financial Statements. This course includes step-by-step instructions, samples and templates for creating historical and pro forma income statements, balance sheets and cash flows.
You may also be interested in my course, How to Create a Business Plan. This course includes step-by-step video instructions, samples and fill-in-the-blank templates for both a one page business plan and a full length business plan.
Accounting & Financial Statements and How to Create a Business Plan are among the more than 130 courses included with BusinessTown. Other popular courses include Start-a-Business 101, How to Find a Business Idea and The Complete Guide to Digital Marketing. You can try BusinessTown for free.
Greg Atkinson is a professional accountant with Atkinsons Chartered Accountants in Brighton, UK. His firm assists startups and more established businesses with all of their accounting needs, while steering them towards the benefits of cloud-based accounting solutions for more streamlined accounting and better management reporting.
