As you launch or expand a business, keeping track of the money, preparing tax returns and performing other financial tasks can quickly become a burden. If you need more time to do other things right, it might make sense to turn over tax accounting and other financial chores to outside specialists.
Choosing the right type of tax accounting, bookkeeping or other financial help is an important decision. An outside accountant can be one of your most trusted business advisers and a key to your success. Although many businesses work with big national firms, most small business owners prefer to work with small independent firms or solo accounting professionals.
L-A SCORE mentor Robert Kennelly notes, “Accounting services differ from bookkeeping services. An accounting firm prepares financial statements and tax returns based on the numbers you give them via your own in-house records. Bookkeeping services, if required, will be extra. If you plan to hire your own bookkeeper, make sure the person you choose is qualified. One way is to use the ‘Bookkeepers Hiring Test’ available free from the American Institute of Professional Bookkeepers at their website, www.aipb.org,” he said.
Before selecting a certified public accountant (CPA) or other financial pro, list the services you think you need, such as tax preparation, financial reports, balance sheets, invoicing, payroll services, general bookkeeping or someone to set up your books. Some firms may handle it all, or you may need to split the tasks. CPA Directory is a huge online listing of CPAs nationwide and can help you find an accountant in your area. In the Lewiston-Auburn area there are many such capable firms of various sizes. Contact and interview them with the specifics of your needs and degree of comfort.
And don’t overlook enrolled agents who are licensed by the federal government to prepare tax returns. They have either worked for the IRS or have passed a rigorous IRS exam. They are savvy tax experts, but generally don’t have the CPA degree and they tend to charge less. Visit the National Association of Enrolled Agents site at www.naea.org.
Fees vary greatly among accountants. Some firms will provide a specified list of services for a flat monthly fee, and may provide less costly help for bookkeeping and other tasks that don’t require CPA-level training.
Kennelly further notes, “If you are considering a larger accounting firm, find out which people you will be working with directly. Also, try to match your own general philosophy with a firm that is as conservative — or aggressive — as you are on tax matters.”
Additional advice on this and other issues for your small business is available from SCORE, a nonprofit organization of more than 12,000 volunteer business mentors who provide free, confidential counseling and low-cost training workshops. In the Lewiston-Auburn area, call L-A SCORE at 782-3708 for information and an appointment; in Rumford-Mexico call 364-3123; in Oxford Hills call 743-0499. Or contact SCORE at www.SCOREMaine.org.
This column is prepared by SCORE.