Whether your business is your side hustle or your full-time hustle, you already know that in order to grow, you will have to eliminate the non-income producing, administrative tasks that suck your time and energy. How do you do that? As a freelancer or solopreneur, it is often easier said than done.
Money is limited and good help is often difficult to find. Building a team doesn’t happen overnight, but you should not wait until your business gets “big enough.” Start building your team one person at a time.
One essential team member is an accountant. An accountant can help you save time and energy and reduce stress by tracking all of your revenue and expenses. An accountant can also develop a tax strategy as part of your overall revenue plan. Delegating menial financial responsibilities allows you to devote more time to execute your vision, create, market and make high-level decisions. You won’t have to classify every transaction, update statements, create reports, do journal entries, or other administrative tasks.
When Do I Need An Accountant?
The best time to consult with an accountant is in the beginning stages of your business, while the workload is at a low volume. He or she will be able to help you establish business practices that will keep your business running smoothly as it continues to expand. It’s less expensive and practical to have things in order from the beginning.
Of course, your other alternative is to wait until business is booming, it’s tax time, and you have invoices and expenses scattered everywhere. Once you begin to realize your jot-it-down-in-a-notebook accounting system is no longer adequate, an accountant will have to charge you for a clean-up project, which could end up being more costly in the long run.
To help you with the interview process, we’ve compiled a list of questions that you can start with when you begin meeting with accountants. These questions address security, business development, and credentials. Use them as a starting point for any interviews you conduct. Even if you may not feel ready to start paying for accounting services for the next six months, the time to research is now.
What Questions Should I Ask?
What types of questions should you ask when interviewing an accountant? Here are 3 questions to get you started. For more, download the free accountant interview question list.
What systems and processes are in place to keep my financial data secure?
Your accountant will have access to your banking information, employees birthdays and social security numbers and more. They should be able to tell you exactly what measures are in place to keep your information secure. Most accountants’ offices have off-site backup of records, encryption software, whether cloud-based or physically at their office.
What documents and reports should I expect from you each month and how quickly?
Provided you submit necessary documents in a timely basis, he/she should be able to produce financial documents with a timely turnaround time. At the very least, Profit and Loss and Balance sheets should be available for you every month if you hire them on a monthly basis. You should find out exactly what their turnaround time. Keep this in mind when making “what’s my status” inquiries
What exact services do you provide for the price quoted?
Can you handle tax issues with the IRS if they happen? Who will be held liable if there are payroll tax issues, you or me? It’s always good to find out what exactly they provide because some accountants specialize in specific services or industries. You will need to know if you need additional personnel, like a tax preparer or a different accountant who can fill in and provide additional services to meet your needs. To cut down on confusion, the price that is quoted should tell you exactly what is included and excluded. You can decide if you need any of those services, now or in the future.
What Type of Accountant Do I Need?
You may have unique needs that a general accountant may not be able to handle. For example, if your company is publicly traded, you would need a CPA for your audit needs. If you are heavily invested in real estate, it would best for you to find an accountant who handles real estate companies exclusively. If you have an Etsy shop, Amazon sales, or make your living through online retail, it would be best to find an accountant that has experience in the online industry.
After hiring the accountant, regular communication and systems are vital to ensure a smooth relationship. It’s important to remember that this is not a set-it-and-forget-it type of service. Organization and awareness of your business cash flow and financial situation are essential to business growth.
Please remember, hiring an accountant does not mean you don’t need to be familiar with basic accounting principles or that you should take a “hands-off” approach to your business finances. You should regularly review basic financial statements such as profit and loss statements and profitability reports. You should ask for clarification about anything that is unclear to you, and make sure that you understand the numbers. You, the business owner, have the ultimate responsibility for the bills, tax liability, and financial decision making.
Tai Stewart is the founder of Saidia Financial Solutions, a full service accounting and tax firm that helps entrepreneurs organize, strategize, and analyze their business finances so that they can focus on running the business of their dreams.