One of the critical mistakes you can make when running your own business is solely relying on accounting tools. As a start-up business or a small company, it might seem more straightforward to purchase an accounting tool or two and call it a day. However, working with a licensed accountant will only take you a step further.
That’s why hiring a professional that knows the ins and outs of the accounting business is essential. A qualified accountant will not only help reduce your tax bill significantly, but they will also help you avoid any unwanted situations.
So, opt for not being one of those entrepreneurs that make the costly mistake of not hiring a professional. Opt for a person with first-grade accountancy services that will help take your business off the ground.
Once you do that, here are five questions to ask them.
The number one reason why small businesses hire an accountant is to help them with their taxes. Tax season is one of the most dreaded times of the year as preparing your documents for tax returns is tedious and time-consuming.
However, you can avoid all that by hiring smartly. Not only will you need a professional to save you from the burdens of filing tax returns, but you need someone that will leave an unblemished tax record behind. Why is that important? Well, nobody wants to deal with the IRS (Internal Revenue Service), and your business’s record will be spot-free.
An accountant can assist you in finding the latest tax laws that can help you take advantage of to maximize write-offs. So, that’s surely a question to be asked.
Similarly, ask the accountant to start gathering tax files on time and not wait until the last moment. Avoid the end of the year rush and start filing much before the April deadline.
Creating and keeping a positive cash flow is one of the biggest small business struggles. For that reason, asking your accountant to help manage your cash flow should be among your top priorities.
Ask your accountant to help you analyze problems, find areas to improve, make better plans to manage and organize the cash flow within the company. As a professional, your accountant should be able to construct a sufficient cash flow that will allow you to manage your operations as you see fit.
Accountants use the method called DCF (Discounted Cash Flow) — a common and effective way of business valuation. A professional will be able to examine your business’ financial plan and from there, estimate your company’s market value above your tangible assets.
Based on the initial value of your business, the accountant should be able to narrow down further the aspect of your business that has the maximum value. For that reason, it is essential to hire an accountant that has a deep understanding of your field of business.
However, do not expect an immediate response as most accountants will need to take their time with such an evaluation. After all, you expect an accurate and precise estimation. This answer will significantly benefit you in the overall scheme of operations.
Unfortunately, there are some inquiries that an accountant cannot help you with. This question pertains more to the legal matters, so you should ask your attorney to guide you through business negotiations.
Keep in mind that some financial matters regarding business negotiations or contracts should also go through an accountant. The best scenario is getting your attorney and accountant in the same room to determine both the financial and legal boundaries of a contract.
A collaboration between the two will definitely benefit you.
An expert should be able to understand all the nooks and crannies of your business and regularly keep you aware of any factors that might harm you, while simultaneously promptly and appropriately reacting to the same.
Financial modelling, corporate taxing, HR planning, and GAAP (Generally Accepted Accounting Principles) are just some of the areas your accountant should have detailed knowledge of. The accountant should be able to advise you on things like renting office space, hiring a full-time contractor, and similar.
The key is to find an accountant that will convey any information you might need without additional confusion and in a swift manner.