How to Select an Accountant for your Business
Having an accounting software that is easy to use is not enough for business owners. Having an accounting software doesn’t make you an accountant. An accounting software only does what the person operating it enters and thus a good accountant’s skills go far beyond than just crunching numbers.
The accountants are not just taxpayers, having accountant’s wide knowledge base is like having an invaluable asset to the business. A general accounting practice covers four basic areas of expertise:
1. Business advisory services: This is aware accountants can earn their keep. Since your accountant is up to date about your business environment, your current tax situation and your financial statements, so it is but obvious that your accountant can pull all the pieces together and can help you to come up with business and financial plan that you can achieve.
2. Accounting and record-keeping: Accounting and record-keeping are perhaps the most basic accounting discipline. However, most business owners keep their own books and records. The reason is simple: If these records are examined by lenders or the Income Tax Department, the business owner is responsible for their accuracy; therefore, it makes more sense for the owner to maintain them.
Accountants can help in setting up bookkeeping and accounting system and can also explain you how to use it. A good system allows you to evaluate your profitability at any point in time and modify prices accordingly. It also lets you track expenses to see if any areas are getting out of hand. It lets you establish and track a budget, spot trends in sales and expenses, and reduce accounting fees required to produce financial statements and tax returns.
3. Tax advice: Help from accountants in taxing comes in two forms: Tax Planning and Tax Compliance. Planning refers to reducing your overall tax burden; while compliance refers to obeying the tax laws.
4. Auditing: Auditing services are required for many different purposes, most commonly by banks as a condition of a loan. There are many levels of auditing, ranging from simply preparing financial statements from figures that the entrepreneur supplies all the way up to an actual audit, where the accountant or other third party gives assurance that a company’s financial information is accurate.
Selecting an Accountant:
The best way to find a good accountant is to get the reference from your employees and from your business partners in the same industry. You can also get potential accountants from ICAI as they are the governing body for accountants in India.
When dealing with an accountant, you can only hope they’re well-educated and well-versed in your business’s needs. Passing the CA exam, however, is a guarantee of a certain level of ability.
Once you’ve come up with some good candidates, a little preparation is in order before you interview them. The first step is to take an inventory of what you’ll need. It’s important to determine beforehand just how much of the work your company will do and how much of it will be done by the accountant.
Once you’ve given some thought to your expectations, you’re ready to interview. Your principal goal is to find out about three things:
Most accounting firms will only offer tax and auditing services. But what about bookkeeping? Management consulting? Pension fund accounting? Estate planning? Will that same accountant will help you in designing and in implementing financial information systems? Other services a CA may offer include analyzing transactions for loans and financing; preparing, auditing, reviewing and compiling financial statements; managing investments; and representing you before tax authorities.
Make sure the firm has what you need. If it can’t offer specialized services, such as estate planning, it may have relationships with other firms to which it can refer you to handle these matters. In addition, make sure the firm has experience with small businesses and with your industry. Someone who’s already familiar with the financial issues facing your field of business won’t have to waste time getting up to speed.
Is the accountant’s style compatible with yours? Be sure the people you’re meeting with are the same ones who’ll be handling your business. In some accounting firms, partners handles the sales and any new business that comes their way and pass on the actual accounting work to others.
When evaluating competency and compatibility, ask candidates how they’d handle situations relevant to you.
Ask about fees upfront. Fees can vary as per accountants experience and skills. However, there are some accountants who work on a monthly salary. Figure out what services you’re likely to need and which option will be more cost-effective for you.
Get a range of quotes from different accountants. Also try to get an estimate of the total annual charges based on the services you’ve discussed. Don’t keep your decision stick only to cost, because an accountant who charges more will likely to have more experience and thus can work faster than a newbie who charges less.
At the end of the interview, ask for references—particularly from clients in the same industry as you. A accountant will always be happy to provide you with the references he/ she has.
- Posted on Dec 19, 2017
- By Dhruv Rudani
- 0 Comments