An accountant can either make or break your business. Even if you have some accounting knowledge or use an accounting software it is always advisable to hire a professional. Accountants are required to ensure that they stay up to date as accounting standards and tax laws change frequently. It is therefore vital that you hire a highly skilled and qualified individual to perform your accounting function; as they can influence the success or failure of your business. Not all accountants are created equal however, sod before you hire one you want to ensure that they are equal to the task at hand. Here are some tips that you should consider when looking for an accountant:
1. Knowledge
Your accountant should have an in-depth knowledge of the operations of your business; which will allow them to assess which accounting principle is best suited for your business needs. It is essential that accountants remain knowledgeable about the market, economy, and the industry in which you operate, in order to ensure that the processes run smoothly. A skilled accountant should be able to help you to make present and future decisions which will influence your productivity and profitability. He/she should be able to measure the feasibility of hiring decisions, and the acquisition of office space, equipment and supplies. Both of you should reach an amicable agreement to determine which issues he/she can resolve and how often a consultation session should take place.
2. Communication
Develop and maintain a harmonious relationship with your accountant. Both parties should set clear standards for communication, in terms of how it will be done, when it will be done and how often it should be done. You will also need to determine whether the accountant will have a virtual office or they will be stationed in-house.
Honesty is the best policy and a lack thereof could prove to be detrimental for your business. You should ensure that you follow the instructions from your accountant in order to make reasonable, strategic decisions. If you don’t understand what your accountant is doing and they cannot explain it to you then it may be time to look for another accountant.
3. Business Growth
Your accountant should be able to, based on your finances, identify areas in your business where you can earn more or cut costs. They should be able to help you to implement a framework for decision making and setting S.M.A.R.T. goals that will produce business growth and development. The best way for them to assist you with this is to have your accounting records up to date always. Monthly reports therefore are critical deliverables.
4. Preparation of Financial Statements
Most business owners dread the tax season as it can be quite tedious and cumbersome. However, if you hire a highly qualified and multi-talented accountant, you should have nothing to worry about. Do not wait until the last minute to start preparing documentation for the tax period, your accountant should ensure that documentation is generated throughout the year in an effort to avoid the ‘last minute rush’. If your accountant advises you to pack up for receipts until the year end, then you are probably talking to the wrong person.
5. Cash Flow
Your accountant should be able to develop an organized cash flow system that will minimize the risk of deficit, and improve your accounts payable and receivable processes. Find out how they would go about organizing your cash flow budget and what recommendations they have to improve what currently exist.
6. Break-Even Point
Your break even point at which your business is neither making a profit nor a loss. The breakeven point is a critical concept for all business owners as this will help them to determine the profitability of the business. It is recommended that accountants calculate the break-even point on a monthly basis in order to have an idea of the direction of the business. Accountants should be able to determine what financial decisions they should make in an effort to cover costs and remain profitable.
7. Business Valuation
Can you assess the value of my business? Knowing the true value/worth of your business is important in the decision making process as it will give you a guide of the best direction in which to steer your business. The net value of a business fluctuates over time and it is therefore essential that a valuation is done on a yearly basis. Some accountants have tried the tested method of assessing several aspects of a business and then comparing it with that of their competitors in order to estimate the true value of the business.
Do you have an accountant? If yes, how did you go about figuring out who was a right fit for your business?
