How Business Accounting Works

Do You Need a CPA?

CPAs can provide a wide range of services, from setting up and administering your accounting system to consulting and tax preparation.

If for no other reason than tax planning, it is a wise move to consult an accountant. Accountants can help you generate the reports and financial statements you'll need to manage your business, as well as help you keep up with tax laws and reduce tax liabilities.

You need to find an accountant that you can build a friendly and trusting relationship with. Here are some things to look for when hiring accountants or CPAs:

  • Are they licensed to practice in your state?
  • Do they have experience with your size and type of business?
  • Do they have good references? (Remember to ask for referrals from your banker, associates, or peers.)
  • Will they be accessible and return your calls promptly?
  • Can they provide insights into other areas, such as human resources or operations?
  • Are they respected in the community?
  • Do you trust and feel comfortable with them?
  • Do they represent themselves in a professional manner?

In addition to helping you set up your accounting system and assisting you with tax planning and preparation, you may also want to consider hiring an accountant or CPA to:

  • compile financial statements
  • review the statements you've generated yourself to find any problems or questionable items
  • perform an annual audit of your books to ensure everything is being maintained accurately

For help locating an accountant or CPA, there are many searchable databases on the Internet, but the best bet is to get referrals from friends, business associates, your legal advisors, bankers, or other trusted sources.