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14 min read

How to Choose a Small Business CPA

Starting a small business is exhilarating and the freedom to choose your own direction and set your own hours is a desirable prospect for many people. However, establishing a new business comes with several hurdles to overcome, and one of the most important is choosing a trusted accountant to help with accounting and tax needs. 

Hiring an accountant that understands your business needs isn't merely a financial decision. It also can affect your business's productivity and profitability, which means you need to put aside some time to conduct a thorough search and make an informed decision on who you put in charge of handling your finances. 

 

However, the process of finding a trusted business partner can be daunting, which is why we created this guide to help you understand why you need a CPA for your small business, important questions to ask before finding a CPA, and the process of choosing a CPA.

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Do You Need A CPA For Your Small Business?

A Certified Public Accountant (CPA) is essential for the continued financial health of your small business. CPAs are qualified in financial and tax preparation and provide valuable guidance on many issues such as taxes, bookkeeping, and getting financially organized. 

 

While you may want to cut costs by using business accounting software, CPAs can provide additional guidance that simple accounting software cannot. In addition, you could make mistakes or overlook something independently. Some of the benefits of hiring a CPA include:

 

Payroll - Maintaining a company's payroll is critical to your organization’s health. A CPA will ensure your employees are paid on time, for the correct amount, and confirm all payroll taxes, retirement withholdings, and insurance are deducted correctly.

 

Financial Tracking - Keeping finances in check is vital to the overall health of your small business. A CPA can help you keep track of revenue and expenses to better understand where money is coming from, how you are spending it, and how you should be spending it. 

 

Analyzing Financial Data -  CPAs will critically analyze financial data such as budgets, financial risk management problems, and tax implications of certain decisions. They can then utilize their findings to help make recommendations for your business.

 

Audits - Audits are an unfortunate part of doing business, but a CPA can help your business prepare for one. A CPA will ensure all necessary documentation is in order, help generate supporting evidence, and provide guidance on the likelihood of an audit.

 

Questions To Ask Yourself Before You Start The Search

Like any other business relationship, you must put a lot of thought into choosing the right CPA for your small business. Here are some questions to ask yourself before you start your search:

What services do I need taken care of?

  • Will the CPA be running your payroll, or will you still manage that process yourself?
  • Will your CPA provide only bookkeeping services, or will they also help you with financial analysis?
  • If you have a dedicated bookkeeper in-house, how will that person work with the CPA? Will your in-house bookkeeper be expected to work with the CPA to ensure your books are balanced? Will you need to pay for both services?
  • Some CPA firms only specialize in tax preparation. Others, however, will offer a wide range of services to meet your business needs. Be sure to understand what services are offered and included in the fee you will be charged.
  • Are you after a business coach offering payroll, bookkeeping, accounting, and tax and providing insights with in-depth knowledge of your business?
  • What kind of hours do you expect your CPA to work? Would you prefer a full-time, part-time, or consultant CPA? What are your expectations of the relationship?

These questions will help you scale down what kind of accountant you need for your small business.

CPA

A CPA specializes in personal financial planning, forensic accounting, and taxation. They will advise you on financial matters, create financial reports and prepare and file tax documents.

Business Coach

If you are after a professional mentor who offers education, support, and motivation, a business coach is your ideal candidate. A business coach will not be as involved in the day-to-day financial matters of your business but will instead provide recommendations for your business's growth and goals. 

Financial Advisor

Financial advisors offer you advice on managing your business assets and your personal financial situation. They will examine your business's financial history and suggest steps you need to take to meet your future goals. 

All the Above

If you need a range of services for your business, consider hiring an accounting firm. These firms will typically offer various services, including bookkeeping, accounting, tax preparation, and business coaching.

How To Choose A Small Business CPA

After you have answered all the above questions and understand what kind of accountant you're looking for, there are several ways to help you find the right accountant

Search Online

One of the fastest ways to find a CPA is to search online. There are a lot of websites that offer a list of CPAs, including AICPA Directory, CPA directory, State Board of Accountancy Directories, Association of Enrolled Agents, and CPA Finder.

References from Other Professionals

Recommendations are usually the best way to find a CPA. Ask your other professional service providers for referrals, or ask if your friends and family have used any accountants that they trust.

Check Their Credentials

CPAs are required to have a professional license and pass a four-part exam before using the CPA designation. You can check the CPA's certification through the CPA verify tool to ensure that it is up to date.

Talk to Them

During the discovery process, check how well they respond and answer questions you have. Some questions you may want to ask include: 

  •  
  • Are they excited & passionate about what they do?
  • Can they help you better manage your cash flow?
  • Will they review your prior-year tax returns for completeness?
  • What happens if you get audited?
  • What is the onboarding process?
  • Do they provide Initial Strategy Sessions?
  • Are they fixed fee or do they charge by the hour?
  • How will they help you get organized?
  • Do they have a team of Professionals for service continuity?
  • Are they tech-savvy?

Can You Represent Me in Front of the IRS

A reliable CPA should represent you in front of the IRS. This means they should be well versed in most types of tax matters. Make sure they are experts in your specific industry

 

Finding a CPA whose values align with your own is essential. A CPA with an inner motivation of care for their clients will be able to provide the best possible service.

The Bottom Line

Choosing the right accountant for your small business is crucial to your financial future. Consider all the options and compare them with your list of requirements before deciding. 

At Schwartz & Associates, we understand that every South Jersey small business is unique and requires custom strategies for success. We pride ourselves on being a premier accounting and consulting firm for South Jersey small businesses. We provide a personalized approach to your business's accounting and consulting needs. 

We believe the success of a small business is driven from within, and we are here to guide your business in the right direction. Contact us today to learn how we can help unleash your small business's earning potential.

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