On the one hand, this makes expertise in any given field a valued commodity, but on the other hand, this can also lead to people being taken advantage of. This is one of the stigmas a CPA will always need to combat and it’s why many people turned to software like TurboTax. TurboTax does make taxes easy. It puts the jargon-laden, annual, government-mandated homework assignment into simple terms and for many individuals this is helpful. It streamlines a process that historically has taken Americans 12.5 hours (on average) every year. The simplicity of software is appealing, but if you’re looking to save money or make more money year over year, then you can’t shoehorn your tax situation into a scaled software funnel. You don’t know what you don’t know. We’ve seen this first-hand in the US where 20% of the people who qualify for the earned-income tax credit, don’t receive for it; don’t apply it; and likely, don’t know they qualify for it.

And this is partly why taxes are so complicated, if you don’t take advantage of your savings and the money that’s owed to you, then that means more government spending. If it’s jargon-laden, then more often than not, people accept the “bill” at the end of the year. You can comb through your bank statements with ease and know what purchase was made when, where, and with what company with any inconsistencies typically flagged by your banking institution. Your bank doesn’t email you asking you to bring all your receipts from the last 12 months annually, they keep track.

All this isn’t to say that you shouldn’t trust your government, it’s simply to illustrate why taxes are complicated. And most of the world knows the United States has complicated taxes. In the Netherlands for instance, the government sends your taxes pre-calculated. Your job is to simply, check their work, and if it’s accurate, then you sign it and send it back. Simple! And they’re far from the only ones that have it easy which is why so many other countries view our tax system as an archaic ritual.

This however, is where CPAs come in. CPAs are experts in our tax system. They look for deductions, savings, and keep you informed of law changes (for better or worse). CPAs investigate your tax situation with a fine-toothed comb; they’re meant to be your advocate in the tax system. Saving you money is in their best interest as it means more business for them, and it’s why if you’ve repeatedly owed taxes, now is the best time to use a CPA. Even if you still wind up owing taxes this year, a CPA can provide you with the insight and tools to save money each subsequent year.

With taxes, the simplest solution (software) isn’t always the answer. It’s the same reason so many entrepreneurs start their business as a sole proprietorship — it’s easy, simple, and straightforward — when the reality is, most small business owners would benefit from restructuring their business as an S Corp and giving themselves a reasonable salary so they wind up being taxed less and growing their business more.

No matter what field you’re currently working in, if you want an advocate to help you navigate the jargon-heavy tax system, then work with one of our CPAs. We’re as interested in saving you money as you are.

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Certifications and Experience

First is the certification and the experience. Choose a firm that has been certified and licensed by the relevant authorities, and that has qualified staff. In case you are hiring a firm or an individual practitioner, it is vital to check for proper documentation first. Inquire for their Certificate of Public Accountant (CPA) or Certificate of Management Accountant (CMA) certifications. If the individual has an undergraduate degree in finance or accounting alongside a good working experience would be a bonus.

Service Needed

You should be clear on the type of service you require. Is it book-keeping, financial planning, tax return, or audits? This will play a significant role in deciding which accounting firm to consult. It will also aid in comparing the cost offered by different firms.

Fees – What’s included and Who?

The cost should not overburden the entrepreneur. It should be reasonable and within the budget. Different accounting firms charge different rates, some offer packages at a fixed or hourly rate.

Where some business owners have wound up with unforeseen costs are when a tax return or offer in compromise is reviewed by multiple people within the firm. While this due diligence is admirable, it can also result in appearing as though you’re paying twice for the same work.

Make a comparison of the quoted fee with what you had planned for your budget. Make a reasonable judgment or opt for a cheaper alternative. However, do not compromise on the quality of work to be done based on cost. There should be a balance between cost and quality.

Business Specialties

Some accounting firms specialize in offering specific services such as auditing, financial analysis, strategic business management plans, or taxation. Choose a firm that specializes in the services you need or — and most preferably — is an expert in your industry.

Prioritize Referrals

Always ask fellow business owners about their CPA firms for first-hand accounts. If all else fails, online reviews (Yelp and Google) can help validate your feelings on a firm you’ve met with. See if others had a similar impression (positive or negative).

Availability

How frequently do you require accounting services per year? Is it annually, quarterly, or every month? At the very least, an annual assessment is recommended. Moreover, what’s the size of the firm? If you need help tomorrow, a larger firm may not have the time for a smaller business, but smaller CPA firms typically treat each client with greater consideration.

Business Advice and Goal Setting

Setting goals for the next financial year should be important. Your firm should advise you on how to maintain proper bookkeeping, compile financial records, and provide feedback from the analysis they have done.

Typically, if you’re a startup, there’s a learning curve to accounting which is all the more reason to outsource a firm. Let’s face it, you can grow your business or maintain it, but rarely can you successfully do both. Get the financial guidance you need to be successful.

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1. You’ll Save Money on Training Costs

One of the biggest expenses incurred by any business is the cost of training; getting your employees familiar with all of their responsibilities, as well as software and other equipment, takes time and money. By hiring an accounting service for your small business, your accountants will come pre-trained and armed with expert knowledge.

2. You’ll Benefit from the Services of a Team of Experts

If you hire an in-house accountant, no matter how good they may be, they will still only be one person. A professional accounting firm will bring years of experience to bear, from a team of seasoned professionals; having extra sets of eyes studying your finances will also reduce the incidence of error, greatly improving your peace of mind.

3. You’ll Save on Software Costs

Another expense that many small business owners grit their teeth and pay for is the cost of the newest technology; after all, it’s important to always have access to the latest software, whether it be QuickBooks or other programs. Hiring an accounting service for your small business will save you from expensive yearly updates; they will always have access to the latest technology.

4. You’ll Free Up Time for Other Projects

The old saying, “time is money,” is an absolute truth – any time you spend trying to figure out your finances is time you can’t spend doing other crucial tasks. If you’re constantly poring over QuickBooks trying to keep track of every dime that comes in and out, you will have a lot less time to handle the other daily aspects of running a business. By outsourcing, you’ll have a lot more time to do those important jobs.

5. You’ll Reduce the Risk of Financial Problems

There are a lot of potential financial problems that can plague a small company. Everything from tax audits to theft can severely impact your bottom line. By having a team of professional accountants keeping track of your money, you will rest easy with the knowledge that your finances are being handled by an impartial group who won’t allow anything to get by them – or you.

6. You’ll Be Able to Make Better Financial Decisions

With a professional team of accountants handling your money, you’ll have access to whatever financial information you need at any time. You will never be unclear on exactly where your business is in terms of income and expenses, allowing you to be better informed when it comes to staffing, equipment purchases, and other major decisions for your company.

7. You Can Change with the Times

Accounting, like anything else, changes with the times and by hiring an accounting firm, you’ll be able to stay up to date. If you have an in house accountant, or handle your finances yourself, you will likely be stuck with the information you had when you were originally trained. By outsourcing, you’ll be able to always have the latest in information, technology, and fraud prevention techniques.

8. Outsourcing Even Helps the Environment

For many businesses, going green is another great benefit of outsourcing your accounting firm. Hiring a professional accounting firm will save you a lot of money on disposables such as paper, printer ink, and other sundry costs. It will also reduce your carbon footprint and benefit the environment.

9. You’ll Be Able to Grow Your Business

By outsourcing to an accounting company for your small business, you’ll be able to upgrade easily once your income increases. Many business owners find themselves defeated by their own success, as your business becoming more popular and busy can leave you and your employees overwhelmed. With an accounting firm, you’ll be able to meticulously track the growth of your business, and adapt as needed. Best of luck in your business ventures!

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Once you are close to having your business up and running, it’s time to consider hiring a small business accountant. Many business owners balk at this idea, due to the fact that hiring an accountant seems like a costly step that they can avoid. However, if you take a step back and look at the grand scheme of things, you’ll find that securing the services of a small business accountant can actually save you quite a bit.
Here are a few ways you’ll save your business money by hiring an accountant:

When Starting The Business

A small business accountant can start saving you money right from the very beginning. One thing you’ll need to consider is your business structure. Will your business be best served by filing for sole proprietorship? Or are you looking for a partnership, or even to start a corporation? Choosing the right business structure for your particular line of work can be critical to saving money in the long run, and a qualified accountant can help you with this.

Once your business gets going, you will of course need to start a business bank account. As with choosing a business structure, you’ll have several options to choose from and your company’s financial future could be at stake. A credible, experienced accountant can give you a lot of help in this area.

Once Your Business Is Up and Running

After your small business accountant has helped you get your business up and running, it’s time to start thinking about managing the day to day finances. Choosing the right finance software can save you a lot of headaches when it comes to keeping track of your income and expenses; this is another thing your accountant can help you with. They can also help train you how to file taxes properly; for example, if your business makes use of independent contractors (as opposed to full on employees), they will need to be classified as such with the IRS. Having a qualified small business accountant can make tax season much less of a nightmare, and help you save money on unnecessary tax expenditures!

As Your Business Grows

Eventually, when all of your hard work pays off and your business begins to grow, you will still find yourself saving money with the help of a small business accountant. If your goal is to reach a certain amount of growth for the year, you will need to budget for that and your accountant will be there to help you create that budget. As your business grows, your costs will go up as you find yourself needing to hire more employees and buy or lease more equipment. Once again, a qualified accountant can be invaluable during this process, helping you to avoid spending any money that you don’t need to.

Hiring an Accountant

With all of the benefits that come along with hiring a small business accountant, now is a great time to start looking for one! Choosing the right accountant, however, can be the true challenge. You will want to vet any potential candidates carefully, making sure they have plenty of experience and all of the proper certifications for your area. Don’t forget to ask for references; you will want to speak to other small business owners who have successfully made use of your potential accountant’s services. Good luck with your future business endeavors!

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You Will Save Money

Of course, hiring a CPA isn’t cheap; it can be one of the bigger expenses you incur when you go into business. Even so, securing the services of a good accountant will ultimately pay for itself. First, consider how much time you will spend poring over the finances for your business. Every minute you spend trying to balance your books is a minute that you can no longer devote to other crucial aspects of running a business. If you’re spending hours each day working on tax forms, you aren’t bringing money in. Not only that, you can rest easy knowing that you have a financial expert working to save your company as much money as possible. Even if you yourself are financially savvy, you might find yourself spread too thin as a result of taking on every other job a business owner must deal with.

A CPA Can Help You Deal With The Unexpected

Running a business always come with an element of unpredictability. Especially as your business grows, you may find yourself dealing with problems you never considered. As your business grows, and you hire more employees, contract out more work, order more equipment, and generate more income, a talented accountant will help you to get it all under control. They will also help you deal with any unexpected financial curve balls that may come your way and threaten your business.

An Accountant Will Help With The Legal Aspects

Depending on a number of factors, including your location and the type of business you are running, the laws that govern your company can vary widely. For example, the tax laws you are bound to will depend on what type of business structure you have. Will you be the sole proprietor? Or an LLC? Are you working from home? Or do you operate out of a storefront? But even if you are the sole proprietor of the business, a CPA can help you navigate the tangled web that is local business law. Ultimately, you will need the assistance of someone who is experienced in dealing with businesses of all types and sizes. They can also assist you should you face the unfortunate situation of a lawsuit being filed against your company.

When To Hire A CPA

As a CPA can charge up to several hundred dollars an hour, it’s important to be responsible when securing the services of one. Make sure to thoroughly research anyone you are considering hiring, and ensure that they have all of the proper certifications that a CPA requires. While many small business owners worry that hiring an accountant will be an expense they can’t afford, or force them to relinquish control of certain aspects of their business, the truth is that having a great CPA can increase your savings and your profits while also offering you greater freedom to manage the other aspects of running a business. With all of these considerations in mind, the answer to the question, “Do I need a CPA for my small business?” is almost always YES!

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nt accurately points out, tax payers opting for accounting software over actual accounting professionals “has hardly put Certified Public Accountants (CPAs) and other personal tax preparers out of business.” It’s not as if accounting firms don’t use accounting software themselves. A good answer to the question is that it all depends on your financial needs.

This begs the question when is an accountant a good idea? Well, if you’re a small business owner, still in the start-up phase, deciding whether or not to do your finances yourself, take a look at the following article, Do I Need an Accountant?

The article points out that as a small business owner, you’re already a wea

rer of many hats so taking on more responsibilities as a bookkeeper/ac

countant certainly isn’t going to make things easier for you and your lack of expertis

e may wind up losing you money.

The article boils it down to the basic considerations of time, money and knowledge. If you have the time, do you have the money? Have the money? What about time? Also, do you really understand how to do basic bookkeeping? Basically, pick two. Chances are you’re not going to have all 3 going for you at once. If you do, you’re probably an accountant. The key thing about hiring an accountant regardless of the services you are hiring them for is that accountants really know how to use all of the financial tools available to them to get the best results for you.

Finally, maybe you should look into outsourcing.

Of course, there is a solid middle ground between choosing an accountant and choosing to rely on accounting software. Hire an accountant to teach you Quickbooks. This is a service we offer at Huddleston Tax CPAs. Click this link to find out more about our Quickbooks services. We look forward to hearing from you at (425) 483-6600.

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How comfortable would you feel about your records if your were audited?

If the thought of the IRS paying you a visit gives you a miniature heart attack, you may be able to find some comfort in hiring a CPA. First of all, compliant bookkeeping will reduce your chances of being audited and having an accountable professional will help you retrace your footsteps in a worst case scenario.

Are you spending too much time with bookkeeping?

Businesses grow when the principles are out there interfacing with customers, developing products and improving the core competencies. If all of your time is consumed with paperwork, payroll and bookkeeping, then it might be a good idea to hire someone else to handle this relatively mundane aspect of the business.

Are you losing money and you don’t know why?

Having a clear financial picture of your company is key to improving your business. An accountant can give you an accurate snapshot of your cashflow and areas that need attention so you know where to focus your energies.

Are you thinking of restructuring?

Being a sole proprietor works for some businesses, but as you grow, you might want to think about incorporating. Choosing the right structure for your business can save you lots of time and money. A CPA can advise you on what’s best for you.

The bottom-line is that you should hire a CPA if you aren’t completely confident and comfortable with the numbers side of your business. This is a reality for many small business owners, since most entrepreneurs get into the business by following their innovation or passion and give little thought to bookkeeping. But accounting practices can make or break a business, no matter how ingenious your product is.

John Huddleston
Seattle CPA  

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1. Have you met all the requirements to be considered a Certified Public Accountant in my state?

The first step when vetting a CPA is to determine whether or not they are a genuine CPA in your state. You can actually answer this question on your own via your state’s professional licenses website. You can find a list of CPA institutions by state at aicpa.org. Make sure your CPA is up to date with their requirements and are not suspended or inactive.

2. How many years experience have you had as a CPA?

The road to becoming a CPA is marked by years of education and training, so even a freshly minted CPA won’t be completely inexperienced. But it’s still best to choose a CPA who has considerable hands-on experience as a practicing CPA.

3. What is your financial expertise in?

There are a number of CPA specializations, including Assurance and Attestation, Corporate Financing, Corporate Governance, Estate Planning, Financial Accounting, Financial Analysis, Financial Planning, Forensic Accounting, Income Tax, Information Technology in accounting and auditing, Management Consulting, Performance Consulting, Tax Preparation and Planning, or Venture Capitalism. Make sure your CPA is well-versed in the area where you need the most help.

4. I need (state the requirements of your business) and I’m wondering if you have the necessary knowledge and experience to help me with this type of accounting?

Chances are, you know what part of your tax return is the most complicated and potentially problematic. Be up front about this issue and make sure they can address it with confidence.

5. What are your hours and availability? What kind of contingency is there if I am audited?

Lastly, you’ll want to make sure that your CPA firm will be there for you when you need them. Make sure they can meet with you when you are available (i.e. do they only operate during business hours when you are also at work? Are lunch meeting feasible?). You’ll also want to be sure that they’ll be accountable (no pun intended) in the case that you are audited. Otherwise, you’ll have to reverse engineer their work in order to answer all of the IRS’ questions.

These five questions should just get you started. Choose your CPA carefully and ensure that you feel comfortable and confident in their experience and expertise.

John Huddleston
Seattle CPA  

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The tax preparer won’t sign your return.

There’s a designated area on your tax return for your preparer to sign. No matter what, you will be responsible to pay fees and penalties if there are mistakes, so there’s no reason a tax prepare should refuse to sign the return. By doing so, they put their stamp of approval on it. By refusing to do so, it’s clear that they have something to hide.

The tax preparer promises you a specific amount on your return.

If someone says they can guarantee you X amount of dollars on your return, they are blowing smoke. No one can know for sure how much you will receive until they’ve done all of your paperwork.

The tax professional bases the fee on the amount of your refund.

This is also suspect, since it may motivate the tax preparer to artificially inflate your return amount. Tax professionals should charge according to the complexity of your return, not on how much you receive from the IRS.

The tax accounting firm doesn’t have a history.

The IRS may initiate an audit up to 7 years after you file your return. If that happens, you’re going to want to talk to your tax preparer – make sure they’ll still be in business if you have questions. Watch out for accounting firms that set up temporary store fronts or just suddenly appeared right around tax time. One last bit of advice: You may be better off choosing a CPA. Aside from being the best fit for complex tax situations, you can easily verify a CPA’s license online. For example, you can check the status of a Bellevue or Seattle CPA’s license at the Washington State Board of Accountancy website with just a few clicks. It’s illegal to call yourself a CPA if you aren’t one, and if they don’t show up in your state’s database, that’s a deal breaker.

John Huddleston
Seattle CPA  

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