We’ll guide you on how to find a small business accountant. You’ll want to determine what tasks you want them to perform and decide whether you want to work with them virtually or locally. You’ll also have to search for an accountant with expertise in your industry and evaluate their credentials.
Step 1: Decide What Tasks You Want Your Accountant to Perform
You may prefer for your accountant to be involved in day-to-day financial duties, or you may want someone who specializes in filing tax returns. Depending on the types of tasks involved, the time requirement can be anywhere from a few hours a month to a full-time commitment.
Here are a few examples of tasks that your accountant can assist with:
- Account setup: If you have just purchased accounting software and need someone to help set it up, you can work with an accountant to customize it for your industry. They can also assist with setting up your chart of accounts, customizing forms, and optimizing the software to help save you time and money.
- Basic bookkeeping: These types of tasks include classifying transactions and reconciling accounts. You may opt to connect your bank account to your accounting software, in which case the accountant would ensure that the categories for imported transactions are classified correctly. You may also want someone to input your transactions and reconcile your bank and credit card accounts manually.
- Payroll: Although you may decide to work with an outside payroll service, your accountant can help you process payroll for your employees, including generating direct deposits, filing payroll taxes, and submitting quarterly and annual payroll forms. See our recommendations for the best payroll services for small businesses.
- Back-office tasks: Your accountant can help with back-office tasks like paying bills and issuing invoices. Depending on the number of invoices and bills you receive, this could be time-consuming, and you may ultimately decide to hire an internal bookkeeper in the interest of saving money. For A/P tasks, another option is to use an application like BILL, which we ranked as the best accounts payable software.
- Financial analysis: This could include analyzing financial data to identify trends and patterns, performing risk assessments, preparing budgets and forecasts, identifying areas for cost savings or revenue growth, and providing financial insights to business decisions.
- Internal controls and risk management: An accountant can also help you with implementing and maintaining internal controls to safeguard financial assets and ensure data accuracy. They can identify and mitigate financial risks associated with fraud, errors, or economic factors while also monitoring compliance with internal financial policies and procedures.
- Sales tax returns: If you have a retail business that files quarterly sales tax returns, it would be in your best interest to hire an accountant with expertise in this area who can help you stay compliant to avoid a potential audit.
- Income tax returns: An accountant will prove to be most valuable during tax season by assisting with tax credits and deductions and filing your personal and business income tax returns. However, they should also be able to provide guidance year-round. They can assist with tax advice and planning, helping you to plan for future tax situations.
Tip:
Not all of the tasks need to be performed by the same person. For instance, we recommend having a CPA prepare your income taxes. However, they are probably too expensive to perform basic bookkeeping tasks, in which case you may want to hire a bookkeeper.
Step 2: Decide if You Want an In-house or Independent Accountant
Consider the scope of work you want your accountant to perform and whether you have enough work to keep an in-house or internal accountant busy. While it might be nice to have exclusive access to their knowledge when needed, you may only need someone on a part-time basis.
While you may decide to hire an in-house accountant or bookkeeper, it’s common to have an external CPA prepare your tax return. For this reason, hiring an independent accountant or accounting firm on a consulting basis is a good first step for a growing business. The outside firm can often cost less than the salary and benefits of a full-time employee, and you may also receive a higher level of advice from a CPA or tax accountant.
In-house Accountant | Independent Accountant |
|---|---|
Will be able to provide answers to questions as needed; streamlines communication | Often costs less than an internal accountant in terms of salary and benefits |
Can help with back-office tasks like invoicing and paying bills | May be sufficient for small businesses |
May require you to find an external CPA to prepare your tax return | Will likely have other clients; you may not have as much access |
Step 3: Choose Between an In-person or Online Accountant
Once you have determined what you want from an accountant, you’ll need to decide whether you want them to work virtually or in person.
In-house Accountant
If you chose an in-house accountant in Step 2, then you’ll need to figure out whether you want to hire an in-office or remote employee.
In-office Accountant | Remote Accountant |
|---|---|
Can have spontaneous conversations and quick check-ins; collaboration on projects can be more streamlined | Relies on video conferencing and project management tools for communication and collaboration; may require more intentional scheduling to ensure smooth interaction |
Works at the company’s physical office space | Works from a dedicated workspace at their home or another remote location |
May rely less on specific technologies for communication and document sharing, as internal systems and physical handoffs might be used | May require proficiency in cloud-based accounting software and project management platforms |
Lets you manage data security through a centralized company IT system with physical access controls | Requires a strong focus on cybersecurity practices and ensuring a secure remote working environment |
Independent Accountant
If you would prefer to work with an independent accountant—whether that’s online or locally—it’s important to ask about their communication style and how the tasks will be performed.
Another consideration is their availability, i.e., can they work on their own time or would you prefer someone to be available for specific hours each day? Also, some accountants may bill you for mileage or phone calls, so you should be sure to determine this ahead of time.
Local Accounting Service | Online Accounting Service |
|---|---|
Provides the benefit of proximity, which can be easier and faster than a phone call or email | Allows you to work remotely and go paperless if desired |
May have a better understanding of local tax regulations and industry trends | Offers more flexibility with work that doesn’t need to be performed in person |
Means that it will usually work specific hours each day | May require more familiarity with technology |
Allows you to set the tasks it will perform (online services may come with a package that doesn’t always fit your needs) | Reduces infrastructure costs like office space, supplies, and utilities for an in-person accountant |
Step 4: Find Out Whether They Support Your Accounting Software
It’s important to ensure your accountant is an expert in your chosen accounting software so that they can answer questions and provide training if there’s a steep learning curve. More than likely, unless you hire an in-house accountant, you’ll need to be doing some of the work in your small business accounting software. This may include entering and paying bills, invoicing clients, and reconciling your bank accounts.
- Accounting software like QuickBooks Online, which received the top spot in our list of best small business accounting software, is a user-friendly option that scales to your business. It also comes with the support of QuickBooks Live, which you can learn more about through our QuickBooks Live review.
- If you’re a Xero user, Bookkeeper360 is a Xero Platinum Partner and provides both accounting and cloud-based bookkeeping and business advisory services. You can read our review of Bookkeeper360 for more details.
Both QuickBooks Live and Bookkeeper360 earned a spot in our roundup of the best online bookkeeping services.
Step 5: Look for Expertise in Your Niche Industry
If your business belongs to a very specialized industry, you should find an accountant who specializes in that area. Niche industries include:
- Oil and gas properties: Oil and gas accounting delves into the acquisition, exploration, development, and production activities. No matter their area of operation, all oil and gas companies will perform the same core activities: capital expenditure, operating expenses, and revenue recognition.
- Restaurants: Restaurant accounting includes a combination of management and back-office operations, such as inventory tracking, employee scheduling, and cost management. If you’re looking for comprehensive specialty software, check out our list of the best restaurant accounting software.
- Trucking: An accountant who specializes in the trucking industry should have expertise in managing loads, dispatches, expenses, and orders. Trucking businesses must file International Fuel Tax Agreement (IFTA) reports, so a qualified accountant should be able to assist with that as well. If you’re an owner-operator or a small trucking business, check out our evaluation of the leading trucking accounting software.
- Nonprofits and churches: Nonprofit organizations must abide by stringent requirements for budgeting, financial planning, reporting, and auditing. Churches must also have strong accounting systems to provide reports to key stakeholders like the board of directors and donors. Aplos leads our roundups of the best nonprofit accounting software and top church accounting software.
- Farm and ranch: Accountants with expertise in farm and ranch accounting should be able to create cost centers to track profit and loss by specific farm units and manage inventory items like feed and grain. It’s also useful for your accountant to be able to track activities related to fixed assets. Our top-recommended farm accounting software lists different options for farmers and ranchers.
Step 6: Evaluate Their Credentials
When searching for an accountant, you want to be sure that they have the proper credentials. If they claim to be a CPA, this means that they have passed the exam and are licensed by your state. CPAs also fulfill continuing education requirements to keep their licenses active and stay up to date on all federal, state, and local tax laws.
There are additional certifications that some CPAs have, including:
- Accredited in Business Valuation (ABV)
- Certified Valuation Analyst (CVA)
- Personal Finance Specialist (PFS)
If you received the recommendation from the IRS, your state board of accountancy, or a state CPA society, those credentials are most likely legitimate. However, if you received a referral or searched online, you might want to verify their status by searching CPA Verify, which is an online central database that contains information about licensed CPAs and public accounting firms.
Questions to Ask a Prospective Accountant
If you’re unsure what to ask a prospective accountant during your meeting, it’s a good idea to focus on their experience and availability, the size of their team, and whether they have any specialties.
Remember, the interview process is a two-way street. Don’t just focus on their qualifications; assess their communication style and personality. Ultimately, you want to feel comfortable and confident in working with them.
It’s important to find out specifics, including how much experience they have working with small businesses. If you have a complicated accounting situation, you probably don’t want someone who just graduated from accounting school. Look for an accountant with at least two years of experience under their belt, if not more.
It isn’t uncommon for an accountant to have a staff that provides support. Find out the size of their firm and their team members’ qualifications before deciding if this is a fit for you.
If you’re a very small business, it’s probably best to work with an accounting firm that is also small and can provide more personalized attention. You’ll also want to establish expectations regarding communication—how often you’ll connect and in what way, as well as their typical turnaround time for responding to client questions.
If you’re looking for an accountant to perform a one-time audit or to file a tax return, you may not need someone available year-round. But, if something comes up, you want to ensure they’re available for assistance in other months besides tax time.
CPAs can represent you at hearings and speak for your business if you’re audited by the IRS. They can also ensure that you have the required documentation and can prepare you with what to expect during the audit process.
When discussing a potential audit, ask the accountant if they have ever dealt with an IRS audit and, if so, what their experience was like. Experience with audits demonstrates their ability to handle complex tax situations.
It’s appropriate to ask about the accountant’s fees and how they bill for their services. Some services may be a straight fee charged by the job, while others may be billed on an hourly basis. Other accountants may request a monthly retainer. In each case, you can ask for an estimate to provide clarity and set expectations.
Many accountants specialize in certain industries, so it’s best to look for someone who has that expertise so that they understand the unique needs of your business. You can also ask about their experience working with businesses with the same structure as yours, whether that’s a sole proprietorship, LLC, partnership, or corporation.
Also, find out how their current clients have grown and developed over the years to get a sense of whether they’ll be able to handle your company’s evolving needs.
Ensure they offer the services you need, whether that’s invoicing, paying bills, categorizing your transactions, reconciling your bank statements, preparing your income tax return, or processing your employee payroll.
This question reveals the accountant’s level of organization and how smoothly the transition would be. It’s also important to ask if they offer consultations to discuss your specific financial situation. A proactive accountant will want to understand your unique needs before recommending services.
Tax laws are complex, and an experienced accountant can help you navigate them and minimize your tax burden. Their response to this question shows their understanding of industry-specific tax issues and how they can help you avoid them.
A good accountant can be a valuable asset when it comes to developing a financial plan for your business—and their expertise goes beyond just tax preparation.
They can guide you in setting realistic financial goals, both short-term and long-term. This could involve revenue targets, cost reduction strategies, or saving for future expansion. They can also help you create budgets that allocate resources effectively to achieve those goals.
Frequently Asked Questions (FAQs)
An accountant is often the primary business advisor for small businesses. They:
- prepare taxes
- examine financial records for accuracy
- prepare financial reports for individuals and businesses
- ensure that their clients comply with tax laws and regulations
- provide advice when needed
Accountants may be involved with creating business processes, which include controls to ensure that assets are managed properly. There are many specialties within accounting, such as tax accountants, cost accountants, and inventory accountants.
A small business accountant specializes in all of the aspects of financial management that impact a small business. You may work with your small business accountant on any level, depending on the needs of your business. It can range from monthly account reconciliations to annual tax compliance and quarterly statements. You may also have a more integrated relationship that includes support with payroll and employee tax withholding.
A small business accountant can be valuable at any stage of your company’s growth. This includes the formation of your company and the creation of a business plan to assist with loan applications or a tax audit.
An accountant can provide advice about your company’s legal structure, measure key business metrics, and manage your payroll. They can use your accounting software to analyze your cash flow, pricing, and inventory management. They can also provide guidance if you’re looking to buy or sell a business or if your company is growing.
The cost of an accountant varies greatly by the level of their expertise. CPA firms generally charge anywhere from $100 to $200 per hour for accounting and tax work, while you might hire a CPA with a couple of years experience starting around $80,000 per year. External bookkeepers start at about $30 per hour or $60,000 per year as employees.
Bottom Line
You know now how to find an accountant for small businesses. After you have decided what tasks you need help with, you have the option of hiring an in-house accountant, or one that performs work virtually. Many accountants have expertise in your niche industry, but it’s important that they have valid credentials. You can ask potential accountants the questions we have provided.
