Statistics show that the second leading reason why businesses fail (undercapitalization being first) is inadequate accounting procedures. There are many parts of a business that can be done "solo," but experts agree that few entrepreneurs are equipped with the knowledge and skill to do their own accounting. At least not to do it right. Besides, having a professional accountant can provide a valuable check and balance system for your ideas. A good CPA can point out flaws and opportunities that you might miss. He or she can suggest changes in your operations or plans that often literally save thousands of dollars. They can take away tax headaches, and leave you free to do what you need to do most - sell your product or service.
There are many kinds of accountants and many levels of service any accountant can provide. Do you want help only at 'tax time'? How about a regular internal audit, or inventory verification? Do you need help setting up your bookkeeping program? Understanding and using your computer?
An accountant can be invaluable when preparing a loan proposal. In fact many banks and venture capital sources absolutely require you to have professional CPA services for your business. They know that this means the finances will likely be cared for properly.
A CPA (Certified Public Accountant) is able to perform all normal business accounting services the small business will need. The designation as a CPA means that the accountant has proven knowledge and agrees to abide by generally established standards of practice and procedure.
Choosing an accounting firm is similar to choosing any other professional service. You can get recommendations from your banker or lawyer. You can ask other business owners. You can also obtain a directory of CPA's from the American Institute of Certified Public Accountants. The directory, titled Firm on Firm Review Directory, rates accounting firms on compliance with good accounting practices.
Some points to consider when choosing an accounting firm:
1) Make a list of accounting firms or CPA's to consider.
2) Schedule appointments with the principals (owners).