Accounting is an essential need of every business, big or small. It is not restricted to bookkeeping but also provides financial advice and a lot of decisions are based on the results of accounting. It deals with the most important part of a business; money. You may start your business thinking you will be able to do accounting by yourself. But sooner or later, you will be required to hire an accounting firm.
They help your business grow, understand your accounts better than you do and provide other financial services. Making a wrong decision while hiring an accounting firm can affect your business very badly. Here are five common mistakes that small businesses make while hiring an accounting firm:
- Price Based Choice
Small business takes time to find success and you may be reluctant to put more money at stake by hiring an accounting firm. You may try to hire a firm with the cheapest deal, hoping to save money. Accounting and financial analysis leads to important business decision. Hiring a cheap firm might put your accounts in the wrong hand. They may be inefficient to understand the financial needs and the actions required. This will affect the growth of your business, leading to wrong decisions and more monetary loss. Similarly, hiring a firm which is expensive does not guarantee good services. Make sure you look at past services and qualification before deciding.
- Hiring A Friend/Acquaintance
It is very tempting and easy to hire someone whom you know because it makes your workplace comfortable. You might also want to hire someone who is referred to you by a good friend. You should keep in mind that accounting is a complicated and tedious process. Hiring someone based on word of mouth or because you know them could lead to inefficiencies on the part of your business. Your business needs might be different from other business needs. You should choose an accounting firm based on what your business needs to grow and evolve.
This is the most important aspect of hiring an accounting firm. Qualification of the accountant that you’re hiring will make a big impact on your business. Accountants need to have a deep understanding of the business and how things will affect it. They should be able to communicate effectively with your fellow employees. There are different types of accounting . You should be clear about what kind of qualification your business would need. Don’t make the mistake of hiring an accountant with only tax or business background. You’re going to need an accountant to do both these works. Make sure their qualification is of accounting services and not just bookkeeping. They should be able to understand and do financial analysis as well.
Transparency while working with an accounting firm is important. Trust is a crucial part of any business relationship. You should be allowed to understand and control your business accounting. Handing over the entire control to your accounting firm would not be a great idea. It would also make you uncomfortable. Hiring someone to do your accounting need but in turn, is controlled by them would make you sceptical of their work. Accounting leads to a decision that affects your profit and future decisions. Make sure you have some amount of control over the accounts. It is your business after all. There are a lot of firms that provide you with an accountant. Visit K Partners website for an efficient and commendable service.
Experience is important to check the efficiency and the kind of work a person does. Make sure you know what you’re expecting from your accountant before you start the hiring process. When you’re reviewing the resumes, make sure not to ignore any experience that isn’t directly related to accounting. Those experiences would provide the accountant with greater insight into a business which in turn would help your business grow. Finance and accounting is a diverse topic. You should know exactly what your business needs before hiring an accounting firm.
Accounting is a time taking and professional task which should not be left to an unprofessional person. You should be diligent while choosing a firm. Think of accounting as a long-term investment and avoid these common mistakes.