Most businesses with twenty or fewer employees choose to hire an external accountant to perform limited functions for the business. Below is a list of services that you should look for before deciding on a local accounting firm.
Accounting and financial statements
- Statement of Operations / P&L
- Balance sheet
- Cash flow statement
- Industry comparison (benchmark) report
- Cash Disbursement Journal
- Transaction Journal / General Ledger
- Payroll Journal
- Bank Reconciliation
Form filing to taxing authorities
- Sales Tax – Monthly or Quarterly prepared
- Payroll Tax Deposits – Monthly or Quarterly prepared
- Quarterly Payroll Taxes prepared – Form 941 and State
- Federal and State Unemployment prepared – Form 940 and UITR
- Withholding Statement for Employees
- W-2 Forms or 1099s
- Business Personal Property Tax
- Advise the client of the new tax laws that affect their business
- Quarterly Estimated Income Tax
Income tax preparation
- Personal Income Tax Returns prepared
- Corporate and Partnership Income Returns prepared
- Do they provide pickup and delivery?
- Do they provide software solutions as part of the service at no additional fee?
- Do they meet clients and prospects face to face at their place of business?
- What kind of support and expertise does the company have?
- Do they provide the service consistently, timely and accurately each and every month?
- How soon after receiving the documentation and data does the accounting firm take to return sales tax returns, payroll tax returns and financial statements?
- How long has the company been in business?
- Ask for a list of references and call some of the references.
There are many choices in the market place as far as an accountant. The highest level of knowledge and skills will be found in certified public accountants (CPA). With the many alternatives and it is difficult for someone to determine whether someone has matching qualifications for the needs of the business. However, by choosing a CPA you will have made a safe choice. CPAs are regulated by a state department of regulatory agencies, required to be licensed, required to continuously update their skills and knowledge through educational requirements every single year, have at minimum a Bachelors degree in accounting, have been supervised by another CPA who approved the CPAs skill level before becoming a CPA, passed the CPA exam and must follow high ethical conduct standards. No other type of accountant has any of these requirements. Unfortunately, by selecting a non-CPA, you run the risk of severely undermining your business. You may think that the hourly rate of a CPA is too high for your budget, but I think you will more often than not find that it will be less costly to hire a CPA than to hire a cheaper accountant.