You want an accountant not only knowledgeable of the financial aspect of your business but also of your long-term goals. What makes a great bookkeeper or tax filer and a real partner may be the right accountant for you. With the right questions to your hire, you can be ascertained that they are in possession of the kind of expertise and vision that would help scale your business through. Here we are giving you a list of some right questions which may help you out to hire a good accountant for your business.
How Do I Manage My Cash Flow Well?
Cash flow is important for all types of small businesses as it covers expenses, pays employees, reinvests, pays off debts, ensures return on investment, and can withstand unforeseen circumstances. That is, if you are not managing cash flow, then even with a fine business model and healthy revenues, it may not suffice. Ask your accountant if he has any recommendations. They may like to tell you new KPIs or receivables collection procedures. Maybe they can also help you make a cash flow projection so that you can predict and prepare for any temporary cash shortages.
What is my core focus in Business?
Things are constantly changing. One day a small business owner might have to manage employees and contractors, market their products and services, serve clients, make hires, and many more in the same week.Are there things in your business that you know you should focus on, but somehow never seem to find the time or energy for, as you are constantly fighting fires?
Ask your accountant for their objective view on what you should be doing first. Chances are that you will find that some things you have been doing are not so urgent after all, and in fact, you should be delegating some of those projects to the other members of your team.
What Can I Help You With?
It would be my pleasure to help you find an employee or maybe hire a few contractors to complete the job or some of those hassle-prone, time-consumable tasks can be automated so that you and your team can get more work done.
Your accountant is likely to be very knowledgeable about how your operations work and who works on your team, so he or she will most probably be able to advise you exactly where you're going to need to fill in the gaps.
No business owner, regardless of how dynamic or gifted he or she may be, can do it all alone, so learn where you need the most help. More support frees up time to focus on your biggest business goals.
Might I Benefit from Another Business Structure?
The choice of business structure significantly impacts various aspects of a business, including income tax returns, taxes, and liability in case of lawsuits. The structure you initially chose may not be suitable for your business in the future, as circumstances may change.
For example, you may need liability protection from an LLC, or you may need to change your form to take advantage of tax benefits from an S corporation. There is no one-size-fits-all business structure, and your accountant can provide valuable insights. To make the right choice, research and consult a guide on how to choose a business structure.
What New Tax Legislation are Coming into Force that are Going to Affect my Business?
They change from time to time. You do not know when and how it would affect your business, but a good accountant should be aware of this. Ask him or her to explain better how those rules might impact you and your business.
What can I do to Protect my Business or my Financial Data?
For the ordinary man, talk of security cyber evokes the image of some IT consultant and certainly not your accountant, but the modern accountant today turns out quite conversant with data security.
An accountant has the onus of holding immense sensitive information of the client. So, they should maintain some good internal data security practices. Ask your accountant how they would protect your business's financial and personnel and client data from cyber theft. They can look at what you have in place and identify new software or best practices that can further increase the security posture of your business and data.
How is Growth or Expansion going to be Funded?
Entrepreneurs often face the challenge of funding growth plans without access to cash. There are two main financing options: debt and equity. Debt financing is the process of borrowing money from a bank or lender and repaying it with interest. Equity financing involves someone investing in your business in return for a percentage of ownership. Each option has its pros and cons.
Equity financing allows you to avoid paying a loan or interest, but may result in losing control over some aspects of your company. It's essential to consult an accountant to determine the best financing option for your business.
What Risks are there for Audit of Sales Tax?
Businesses in the United States often sell products or services in multiple states, and traditional laws only required businesses with a physical nexus, such as a store, warehouse, or employee, to collect sales tax in another state. However, most states now base their sales tax laws on an "economic nexus," meaning that if a business sells a predetermined amount of products or services to customers in a state, they must collect and pay the sales tax there.
Navigating through these laws can be a significant burden for small businesses, as it may result in notices from other states, lengthy audits, and penalties. It is recommended to consult with an accountant to identify potential economic nexuses and resources for compliance.
What's the Key to Increasing Profitability?
As a small business owner, you might assume the only way to expand your business is by increasing revenues. However, revenues are just one half of the equation. In fact, one of the most prominent metrics used to measure business performance can actually be profitability, and there are numerous ways you can increase profitability aside from increasing revenues or reducing costs.
Ask your accountant which ones he or she recommends. Here are a few ideas that you could implement:
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Raise prices to raise the break-even point
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Cut costs without sacrifice of quality
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Negotiate with suppliers
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Enter new markets
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Develop secondary products or services
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Become a subscription-based business
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New marketing effort
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Cross-sell and upsell to customers
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Tax planning
There is no one right way to grow a business. Your accountant can help you determine the most appropriate strategy for you.
What can I Prepare Prior to Tax Season?
This could be the toughest test you will ever have when managing a business: income tax. For instance, you may consult over how much you should put aside for paying your taxes, which business expenses qualify as tax deductions and tax credits, or which documents your accounting firm needs in preparing your tax returns. This way, you can ease some of the concerns by discussing your tax situation with your CPA to make sure, at the end of the year, you would not have surprises and be ready to file on time.
What Would You Do If You Were in My Shoes?
Meeting your accountant can help you think about the bigger picture of running a business. As a trusted advisor, your accountant has a comprehensive understanding of the business world and can provide valuable insights. If they were in your shoes, they would likely offer an objective opinion on what to do. While you may not necessarily act on their advice, understanding their perspective can provide valuable insights for your business. While it's important to consider their perspective, it's essential to take time to step back and think about the bigger picture when running a business.
Do you have Any Acquaintances?
Want a small business loan? Legal advice? Financial or estate planning? Insurance? Real estate? Chances are your accountant can't do all those things, but they may know someone who can. Accountants tend to know a lot of people in the business community, so ask them who they 'd recommend for any business resource you need.
For instance, a few accountants have referral relationships with other business professionals but may never have actually worked with them. Therefore, you may want to ask whether they personally have worked with them or someone who has had a good experience. This way, the most reputable referral depends on personal experience.
Conclusion
Conclusion Hiring accountant is so important that the choice can make all the difference between getting your business growing and healthy or not. Twelve strategic questions put into perspective the competency, experience, and approach to the management of finance by an accountant. It helps qualify what the vision is made to align with your business goals. A capable accountant who can show a proaction sense will lead you to strategic directions toward trimming the financial operations within your business and setting you up for long-term success. This will likely increase profitability, compliance, and sustainable growth for your business when getting the right partnership.
