One of the most important advisors to your business, an accountant may save your business lots of money, potentially reduce your stress level and could make your business life much easier.
The right accountant can design strategies to both lower your tax liability and grow your company. You’ll feel better knowing you have access to a professional who understands your business and can be a sounding board on key financial management decisions, such as funding expansion plans or taking on additional partners. There are plenty of good reasons to hire an accountant.
Since you’ll likely be with your accountant for many years it’s essential to take the time to find the individual or firm that best suits you. Consider the following during your selection process:
Before you begin your search, decide on the level of service you require. Does your company need an accountant throughout the year or only when filing taxes at year-end? Will you continue to handle the day to day bookkeeping yourself using software? Also consider the size of accounting firm – some smaller firms offer extremely personalized attention, while larger accounting operations may bring a wider range of experience to their clients because they serve a range of industries.
Focus on what’s most important to your company to help you narrow your search criteria.
Tax reduction strategies
A competent accountant will find deductions to lower the amount of tax you have to pay on your current tax return. A great accountant will develop a tax reduction strategy for your business that will reduce your taxes well into the future. (In some cases, an accountant may want to file adjustments to previous tax returns to take advantage of missed opportunities.)
In addition to designing your longer-term strategies, your accountant should be available to you to provide advice on short-term day to day decisions – such as whether to buy or lease equipment. There are many business issues that confront entrepreneurs every day so make sure the accountant welcomes frequent interaction.
Experience with industry-specific tax credits
Every accountant should be familiar with standard business deductions such as rent, payroll and advertising. But your ideal accountant should know how your business can embrace rarer tax credits or deductions that are geared specifically to your particular industry or type of business. For example, a business operating in the Canadian lumber industry will want an accountant familiar with eligible logging tax credits.
Not all accountants are created equal. Interview a potential accountant to truly understand their background to make sure they possess the kind of industry knowledge that you need.
Watch out for promises
Accountants are not miracle workers. While a good accountant can help you to pay less tax, even the best accountant can’t make your tax bill disappear completely. No reputable accountant will make an outrageous promise to you just to win your business.
As you shop around for a professional accountant, ask for examples of situations where the accountant has helped the business owner to save money. Get references and check them out. And trust your first impression – you want to work with an accountant who knows their stuff and makes you feel comfortable.
Take your time to shop for an accountant – don’t let tax season deadlines rush you in to the wrong relationship. Your patience and due diligence will be rewarded when you find that perfect fit accountant for your business.
This article is for information purposes only and should not be construed as advice. Consult with a qualified tax specialist regarding any advice specific to your business.
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