QUESTION: I am a relatively new business owner and use the QuickBooks accounting software system by Intuit. Do I also need the services of a bookkeeper or a Certified Public Accountant?
ANSWER: It appears that you feel confident in keeping track of your monthly income and expenses using the software by Intuit. This software is a useful and inexpensive record keeping vehicle for a small business.
As you grow and expand your business, keeping track of cash flow, preparing tax returns and performing other financial tasks can quickly become a burden. You must decide if it continues to make sense to do it yourself or turn over these chores to outside specialists. Yes, this will cost money but, if it frees up time for you to do more productive income producing activities, it may be the right choice.
Choosing the right accountant, bookkeeper or financial advisor is an important decision. An outside accountant can be one of your most trusted advisors and a key to your success. While some business owners work with big national firms, others prefer to work with small independent, local firms, familiar with the community in which they operate.
Accounting firms differ from bookkeeping services. An accountant prepares financial statements and tax returns based on the numbers that you give them via your own in-house records. Bookkeepers are usually full or part time employees, although some may work as independent contractors. Skill sets vary but usually involve basic record keeping, payroll and tax reporting.
If you plan to hire a bookkeeper, make sure the person you choose is qualified. One way is to use the “Bookkeepers Hiring Test” available free from the American Institute of Professional Bookkeepers at their web site http://www.aipb.org/testrequest.php. Generally their fees may be less than those of a Certified Public Accountant.
Before selecting a Certified Public Accountant (CPA) or other financial professional, list the services you believe you require. These may include tax preparation, financial statements, balance sheets, payroll services, and general bookkeeping. Some firms can handle it all, or you may want to split the tasks between a bookkeeper and a CPA. Visit www.cpadirectory.com to help you find an accountant in your area.
A word of caution…never assume that your CPA is an expert on all tax matters or sensitive to your particular situation. It is incumbent upon you to read various publications that deal with the changing tax codes. If you read something that may apply to your situation, make a note and bring it to the attention of your accountant. The Kiplinger Tax Letter is an excellent resource, written in plain English. Visit their web site https://taxletter.kiplinger.com/pcd/Order?iKey=I**W00
Gray Poehler is a volunteer with SCORE Naples. Business counseling on this and other business matters is available, without charge, from the Naples Chapter of SCORE. Call (239) 430-0081 or visit https://naples.score.org/mentors .The SCORE business office is located at 900 Goodlette Road North, in the Fifth Third branch bank building. Office hours are 9 a.m. to noon, Monday through Friday.