In any case, it’s always a good idea to maintain a relationship with an accountant, no matter how small your business is. Whether your accountant is a CPA is up to you. The real question is: To what extent do you need accounting services outside the company? It also depends on you and the nature of your business.
I always start with a reminder: Buck stops with you! You can’t afford to dissociate yourself from understanding the meaning of your financial statements. If you rely solely on your accountants or accountants to obtain completely accurate financial data, you are asking for trouble. If you intend to own or manage a business, it is your responsibility to learn to speak the language of business. Knowledge of accounting is the language of business.
How to get involved in the accounting process will be determined by your schedules, your mental aptitudes, willingness to control, cash flow, etc. The language of business is the business language. One scenario, if you can afford it, is to hire internal accountant staff to prepare monthly financial statements and have an external accountant check them. Another common scenario is to prepare parts of the statement yourself, such as preparing a sales diary and a cash withdrawal diary, and then hire an external accountant to prepare a bank reconciliation and financial statements for you. Some do this on a monthly basis, others on a quarterly basis. Some business owners make books themselves throughout the year and hand them over to the accountant at the end of the year to check balances and record depreciation for tax purposes.
There are many ways to work with an accountant. Nevertheless, you should learn enough about accounting to be able to communicate intelligently with the accountant. Because you are intimately involved in your business, you can recognize danger signals that even your accountant will not notice.
Choice of an accountant
Relying on yellow pages to find an accountant can be risky. The best way to find a professional is to recommend. However, you must interview potential accountants before logging in. One of the first priorities is to check their level of experience. Your company may have very specific accounting and tax issues that require a certain amount of experience. You may have a production problem. What does the accountant know about raw materials, work in the process and accounting for stocks of finished products? Does the accountant know how to create labor costs and overheads? Ask for references from other similar companies.
Remember that you can go to a company with an established reputation, but with whom will you have relationships? Is your account large enough to guarantee a relationship with a partner? You need to feel confident with the person assigned to your account. Perhaps a smaller company with four or five accountants who are experienced veterans can do better.
You will also want someone you can contact. The ability to communicate is a key factor. Your accountant may be technically proficient, but can you understand what he or she is telling you? Does he or she listen when you ask questions? Don’t be afraid to ask about someone else if you have difficulty communicating.
Another important criterion is “accessibility”. Is your accountant too busy to talk to you? Can you get answers to your questions within a reasonable time? Do you feel important to him or her? Situations may arise where you need immediate information to make an important business or tax decision, or will your accountant be able to answer your questions quickly?
Last but not least, accounting practices are also important. Accounting practices vary from company to company. Some companies are very aggressive and put enormous pressure on employees and partners to bill every minute. Some companies require a review process before any work goes out of the door. This means that anyone who does any work on your account, including someone who stamps your envelope, bills you for it.
Find out in advance what happens if you call the company to ask a simple question that takes less than five minutes to answer. Are you billed for five minutes, or is it billed at 15-minute intervals, even if you only talked for five minutes? Some companies justify this increment by explaining that you pay for accounting expertise that may have taken years to complete, so they say it’s worthwhile.