Your Accountant

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Some experts say that a small start-up business does not require the services of an accountant. The answer is ”maybe. Before you attempt to handle your own taxes, answer this question: How good are you at handling your personal taxes? Do you prepare your own personal returns? Do you pay on time or ask for extensions? Have you ever been audited ? This is really the litmus test. Filing business returns is more complex than personal returns.

If money is an issue (as it often is in new businesses), then try to learn as much as you can about your tax obligations before getting started. There are many places to turn for advice such as the Service Corps of Retired Executives (SCORE), a national organization sponsored by the SBA. SCORE volunteers are actually retired business executives who are happy to provide financial counseling and workshops ”for free. You can find a SCORE office in your region by looking in the yellow pages of the telephone book. In addition to asking advice at SCORE, you can attend tax seminars for small businesses, do some research at the library and on the Internet, consult friends or other people in business, or buy computer software programs and books on the subject. There honestly is a lot of information out there.

Here's our advice to you: Unless you are well-versed in tax law, tax codes, home business deductions, and filing procedures and very responsible about staying on top of everything, then you are taking the risk of making mistakes by filing your own taxes. Mistakes will cost you time, aggravation, and potentially a lot of money lost in unclaimed deductions or in penalties because of filing errors.

Don't be cheap when investing in yourself and the success of your business. Be honest. Maybe you have good accounting skills, but are you prepared to stay on top of it? Are you knowledgeable and disciplined enough to know when to file certain tax forms, submit quarterly taxes, keep consistent financial records, and claim the right home business deductions? It can be a lot of information to stay on top of, especially when you're also managing and marketing a new business.

Your accountant needn't be from the biggest and flashiest firm in town to be competent. On the other hand, it also shouldn't be your cousin Lenny who's never done a business return in his life. A good accountant should have experience in handling small businesses. Ask those you trust or other small business owners who they use. Don't feel funny about asking an accountant for a few referral names . An accountant worth his or her salt should pass the information along willingly. If an accountant bristles at the suggestion of providing referrals then he or she is not right for you.

Accountants ' fees vary depending on location and client base. For example, you can assume that the accountant in Beverly Hills with entertainers as clients is going to charge more than a local accountant in the suburbs. In general, accounting fees can range from $75 to $200 an hour or higher.

Once you've put your finances into the hands of a reputable accountant, don't for one minute think that you can stop paying attention. While accountants are knowledgeable about bookkeeping, the role of an accountant is not to be a bookkeeper. The primary job of an accountant is to analyze your financial records and prepare your tax returns. If you feel like maintaining your books from week-to-week and month-to-month will get away from you, then perhaps hiring a bookkeeper is an option.

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