An accountant for a small business can do more than simply prepare a tax return – and if you do not discuss your individual needs you may find he or she plans to provide a full audit service which will cost you much more than you expect to pay and for services you may not even need.
On the other hand, if you’re expecting a full financial and business audit by your accountant, and he or she expects you want just a simple tax return prepared – you’ll also be left disappointed.
Accountants are one of the most important professional service providers for a small business owner, but they offer a variety of services. In order to get the most out of your accountant, you’ll want to discuss your expectations and make sure your both on the same page.
Choose Your Accounting Services
When you hire an accountant, you’ll want to talk about what you expect them to do. Some will only provide tax return preparation services unless you discuss your other accounting needs with them. Even tax return preparation has a couple different levels of service you could receive; for example, do you expect your accountant to help you estimate your quarterly tax payments and then file your annual business tax return? Or do you expect that the accountant will also create financial statements in the proper format from your data or shoebox of receipts?
Accountants can also work with your financial information to help you review and analyze the data to uncover anything which may be out of ordinary or an error. The accountant will not give his or her opinion about whether or not your financial data is in accordance with the General Accepted Accounting Principals (GAAP). These services are generally considered “review” services, but can be taken a step further to a full “audit.”
If you request your accountant audit your information, this is the most comprehensive level of accounting service your small business could obtain. At this level of service, your accountant will provide his or her opinion whether or not your financial statements are free from errors and are in accordance with GAAP. They will go as far as confirming all of your assets and liabilities with your accounts, evaluate your control systems, business documentations and financial transactions in detail. While small businesses can benefit from audit services, this level of accounting is generally used by larger corporations and is fairly expensive.
Have a major tax problem? If you have been audited by the IRS or don’t have enough funds to pay the taxes owed in full some accountants may be able to help with this. Accountants have many different specialties and many accountants are not a once size fits all tax solution. If you have a major tax problem you may have to get a specialized tax problem accountant or a tax attorney with experience . Things they can help you with are IRS audits, penalty abatement, payment plans, hardship filings and more.
Communication is Key
The different services provided by an accountant for small business owners means you may have a difference in opinion as to what services are being provided. When hiring or working with your accountant, be sure to discuss expectations in detail, and ensure you both agree to what documents will be prepared, created, or reviewed and to what level. The amount that you pay for your accountant will vary depending on how involved your accountant is in your financial situation.