Business Accounting

When you run a small to medium business, your accountant plays an important role. As well as helping you stay on top of your BAS and tax obligations, your accountant should be able to help you create a plan to grow your profits and secure the future of your business.

If you do not feel as though your accountant is giving you the right guidance to optimise your financial performance and financial position, you may want to consider changing accountants. You can change accountants at any stage during the financial year.

Why change to another small business accountant?

Your accountant plays such an important role in your business and should be working with you on the below:

Business forecasting – To help you plan ahead and create budgets and cash flow forecasts
Profit dissection – By examining your revenue streams, your accountant can identify where to focus on increased income
Expense analysis – Break down the costs of running your business to see where you can potentially save money
Asset advice – Which areas of the business should you spend money on and how can you make your assets work for you?
Liability analysis – What parts of your business are holding you back financially?
Regular financial health checks – A good accountant will keep in touch with you throughout the year, not only at tax time, to make sure you are on a budget and on track to achieve your goals
Education – To allow you to clearly understand what is going on with your numbers
Future planning – You and your accountant should work towards forming a strategy for the business in the long term, including selling the business or winding it down so you can retire
If your accountant is not covering the points in the above table, it is likely there are a number of areas where your business could be improved financially. In this case, it is a good idea to consider a new accountant.

Before you look for a new accountant, take the time to do some research. As well as meeting the above criteria in terms of the day to day management of your finances, there are some things to ask yourself about what you want from your accountant:

Communication requirements – Do you expect your accountant to respond to your calls quickly?
Expertise – are there areas of your business you need your accountant to focus on?
Reliability – will your new accountant meet deadlines for deliverables?
Technology – does your accountant use software which will integrate easily with your systems?
Values – what are the values of the accountant? Are they aligned to yours?
How to switch small business accountant

Before you move to a new provider, ideally you want to tie up all your loose ends with your current accountant.

Select your new accountant before you move on as they will need to communicate with your previous accountant.

From there, it is time to break the news. You may choose to give your current accountant a call and explain that you’re moving on. If they are professional they will part with you on good terms and wish you all the best.

It is the responsibility of your new accountant to get in touch with your previous accountant to request a transfer of your financial information. In Australia, it is ethical best practice for your old accountant to comply and hand over the information.

Once your new accountant has your figures and financial statements, make an appointment for the both of you to review your business. Now is the time to explain your trouble points. Talk about your business and personal goals

A small business is an enterprise that is usually small in scale in terms of number of employees and/or sales revenues. A large majority of the businesses in the United State are small business. These businesses are usually registered as sole proprietor, meaning one individual owns it, or partnership, meaning 2 or more people owns the business.

One of the problems facing a small business is in terms of accounting. With the limitation in funds, some accounting is done by the business owner. The entrepreneur is tasked to run the business and at the same time handles the day-to-day accounting requirements of the company. Because of this, the company is often penalized by the government for late payment of taxes, late submission of tax documents and at times, non-submission of tax forms. Also, the business can also be penalized for erroneous computations of tax dues. The business owner has his/her hands full with running the business that handling the accounting requirements can be turned over to another person.

A business owner can hire an in-house accountant or he/she can outsource the small business accounting work to a CPA firm like Desert Rose Tax & Accounting. An outsourced accountant can sometimes be more beneficial than hiring an employee because it is less expensive to outsource than to hire. Also, the outsourced accountant doesn’t need a designated space while an in-house needs his/her own space in the office.

In choosing an accountant to handle small business accounting for the company, some tips can be useful. Before opening a business, the business owner must have a ready accountant. Since a CPA requires a license before he/she can practice the profession, one has to make sure that he/she has a license. The accountant must have experience in the kind of industry the business is in.

Also in a small business accounting setup, before hiring an outside CPA make sure that one knows how much the accountant charges. Fees charged by CPA firms can vary widely. It is good practice to compare the accountant fees with industry standards. The accountant must be able to fill the needs of the company. Before hiring an accountant, one has to interview at least 3 or more prospective accountants so one can compare which among the three will best serve the company’s purpose.

In handling the accounting needs of the company, the business owner must ask the prospective accountant about other possible services he/she can offer to the company like sales tax and payroll tax reporting services. Some Certified Public Accountants offer business advice to help the enterprise grow.

Also, the accountant best fitted to handle the small business accounting is the CPA whose accounting firm is also small. Accountants who own small firms understand how small businesses are run. They also have the time and resources to share with the business owner. It’s one thing to have a fancy degree in business and another to have practical experience running a small business. In the event that the business owner sells the business, the accountant must be good enough to discuss with the owner how to go about with the sale so that tax liabilities are minimized.

Prior to signing up an accountant for the small business accounting, the business owner must ask the accountant for client references so that the owner can investigate. One must also make sure that the accountant establishes a business relationship with the owner, meaning the accountant has time to visit the company every now and then rather than just seeing him/her only when it’s tax filing season.