How to Get the Most from Your Accountant

Getting the most from your business accountant begins with hiring the right person for the job. Then, consult them prior to any major moves you make with your business that might have tax consequences, whether it’s hiring, employee benefit changes, equipment leasing or purchasing, property acquisition, or rental.

Here are a few key questions to help you choose an accountant with the skills to guide your business to the most tax-advantageous operating strategies.

• Ask about their qualifications. What training do they have, and what industry designations do they hold? You can check with The American Institute of Certified Public Accountants to see if they’re certified. Find out whether they’re licensed to practice in your state and learn how recently they were certified -- you want someone who has current knowledge of industry practices.
• Ask if they serve small businesses. A big CPA firm may seem impressive, but if you own a small business and the CPA serves mostly major corporations, you’ll likely end up low on the priority list. Find a small business specialist, ideally with experience in your industry. They should also have experience with businesses at your stage of growth, whether it’s a startup, fast-growing, or mature.
• Ask who will oversee your account. In larger firms, the partner you meet initially may pass you off to someone else. Make sure you know who will handle your account on a day-to-day basis.
• Ask about fees. Learn the hourly rate or set fee for handling your account; be sure to compare the costs of various candidates.
• Ask for references, and call them. Ideally these will be current small business clients you can contact to hear how satisfied they are with their service.

Once you’ve interviewed and hired an accountant who’s a good fit for your business, don’t wait until six weeks before your annual tax filing date to call them. Involve your accountant in your business year-round and notify them before any major business decisions.

For instance, they can advise you on whether your business would reap more tax benefits if you record business income on a cash or accrual basis, or whether your inventory should be accounted for on a last-in-first-out (LIFO) or first-in-first-out (FIFO) method. You also may call on them to create monthly or quarterly financial statements.

If you’re thinking about hiring, your accountant can advise you on particular categories of workers -- veterans and the disabled, for instance -- whose employment might bring you tax advantages. They also can set up systems to ensure you're deducting and properly paying payroll, unemployment, workers’ compensation, and required taxes. If you’re making an equipment purchase, they can determine whether you’ll earn a bigger deduction buying now or putting it off until the next fiscal year.

The tax implications of creating a company health or retirement plan are complex, and a good accountant can help advise you on how to establish a plan that will give you the most tax benefit. Leasing versus buying equipment or real estate is another set of decisions that may help you at tax time if you get informed advice ahead of time.

U.S. tax laws are highly complex -- the tax code is more than 60,000 pages long -- and change yearly. Sometimes, new tax laws are passed at year-end that apply retroactively to the entire year. One of the most important reasons to integrate your accountant into your business team is their ability to stay up-to-date on these changes and pending legislation and offer more sophisticated advice than you could get from studying the current tax code on your own.