When you start your business, you’ll have accounting needs. Where should you go to find the right accountant for your business? You need to realize that not all accountants are the same. Like medical doctors, accountants specialize. You won’t turn to just any accountant for your problems, but rather you should take the time to make sure the accountant meets your needs.
Understand the various service providers so that you can make an informed decision on where to turn for your various accounting issues.
Specialists and Generalists
It’s important for you to have a strong relationship with a generalist, one who will be able to handle the common issues that arise every day as you run your business. A generalist will be able to handle most of these problems, in the same way that you have a general practitioner for most of your medical issues. When you do have a problem that requires a specialist, the generalist should have current relationships with qualified specialists that you can then turn to as needed.
Large CPA Firms
A large firm, whether national or regional, will have staff members in many disciplines, with extensive training and strong quality standards. They’re expensive
, and generally don’t work well with small businesses. The junior staff will not have sufficient background in your specific problems, while the senior staff is focused more on management than production. The large firms will likely offer audits and systems consulting among their primary services.
Small CPA Firms
A small firm will frequently be run by CPAs who trained at large firms, but decided they prefer the smaller, more entrepreneurial environment of a small firm. Senior personnel will generally be the ones meeting clients, and partners are probably from a tax background. Small firms are more likely to have experienced paraprofessionals to help with bookkeeping for clients. They are more affordable than large firms, and their primary services will generally involve compilation and review services and income tax preparation, as well as possibly systems consulting.
If you don’t need CPA credentials on your financial statements, bookkeeping firms can provide services such as data gathering, data entry, and financial statement preparation. The bookkeeping firm can also prepare sales tax and payroll tax returns as well as income tax returns. These firms will have lower fees and pay closer attention to individual transactions.
Payroll Preparation Firms
Other firms specialize in payroll preparation
and payroll tax remittance. Their work is routine and automated, and you can use them for payroll processing while still using a CPA firm or Bookkeeping firm for general accounting. There will usually be a set base fee and then a charge per employee.
Tax Preparation Firms
Some firms only prepare annual income tax returns, without any accounting and bookkeeping functions. They will handle both individual and business clients, with fees similar to a bookkeeping firm. However, you probably won’t have any meaningful professional relationship with the accountant professional, losing all the benefits of those relationships.
There is a growing number of freelance accountants who will work for your company on a flexible schedule. They generally have between 5 and 15 accounts, and they’ll work directly with the various business owners the same way that an employee would. You’ll pay more on an hourly basis for a freelance accountant, but it can still be cheaper than hiring a full-time employee when you don’t have a large enough business to justify the full-time position.
Know the strengths and weaknesses of the various options for finding accountants for your business, and you’ll be able to find the right accounting professional for your needs.