Choosing an Accountant
You need an experienced accountant who specializes in small business and works with other owners like you. As your business grows, the duties of the accountant will become more numerous and demanding and will ultimately involve designing customized accounting systems for your business. This member of your management team should be a good business adviser as well as a skilled tax planner. He or she should understand the importance of building and managing sound cash flow documents, should be able to provide assistance in securing loans, and should become a good source of business contacts as your venture grows.
Shop around for a competent accountant and consultant. This member of your management team will become one of your most trusted and most frequently used advisers. Ask other business owners in the retail trade about accounting people they would recommend. Call your banker, lawyer, or trade association for additional recommendations.
If you are planning a significant expansion of your business, seek out an experienced certified public accountant (CPA). If you think you might be a candidate for raising venture capital or going public, contact an accounting firm with an established track record in initial public offerings or private placements. Typically, these firms search for new small ventures that will become the leading businesses of the future. If they are interested in your business, they will most likely charge less than their usual fee until you become more profitable. Then their charges will rise accordingly.
Hiring a nationally recognized firm will lend credibility to your financial statements and enhance your chances of attracting growth capital. Also, major accounting firms have a number of professional manuals, books, and other programs to assist new founders. These materials are usually available free or at very low cost, since accounting firms want your continued business as you grow.
If you do not feel that you need a national accounting firm, look for an experienced independent accountant or retired accountant who could work part-time. Local colleges and universities with accounting departments are another source for referrals. Finally, contact the society of certified public accountants in your state. Most have referral banks.
After collecting a list of potential accountants, interview each one. Check the chemistry and make sure you are compatible. Ask about services and fee structures. Fees will vary significantly according to the experience level of the accounting expert and the size of your venture. As with other members of your infrastructure, do the routine work yourself and use your accountant for professional expertise.
Setting up and maintaining your books at the beginning is critical to successfully managing your venture as it grows. Many entrepreneurs hire bookkeepers to perform the routine accounting work and then utilize a CPA to review their financials on a monthly or quarterly basis.
You need to become familiar with the day-to-day numbers associated with managing your business. Don’t just wait for the prepared financial statements at the end of the month or quarter. You must have a feeling for the money going out and the money coming in-your cash flow. Carefully track your sales and expenses, and how much money you are owed and owe. Do not delegate this function to your accountant.