Four Skills to Look For When Hiring Your Next Accountant
Accountant Skills
Hiring an accountant can be one of the most difficult decisions your company can ever make. Hiring a good accountant can send the financial future of your business headed in a brighter direction; hiring a bad accountant can cause you to have nightmares.
Here are four skills you should look for when hiring your next accountant. Making sure that your accountant has these skills will help ensure the best possible future for your business.
Punctuality
Ever heard the quote that “time is money, and money is time?” That’s actually a fact. Time is money, and if your next accountant doesn’t value time and often shows up to meetings late, then they will not value your money. Punctuality is undoubtedly a skill you want your next accountant to possess.
Visionary
Believe it or not, a good accountant must be a visionary. Yes, a visionary. In order to take you and your business finances to the next level, your accountant must be able to see at the next level. A good accountant can literally look at where you are today and envision where you can be tomorrow with a bit of guidance.
Good Listener
Every good accountant listens before speaking. In order for an accountant to know what your financial goals are, how you wish to accomplish those goals, where you’ve been in the past and where you want to go in the future, he or she must first stop and listen. If an accountant always cuts you off or always speaks and never lets you talk, those are clear signs that your accountant doesn’t value you as a client.
Inquisitive
An accountant could easily look at your bank account and assume they know how to get you out of debt and into prosperity but a good accountant never assumes without evidence. Instead, a good accountant always remains inquisitive, asking questions that will help them do their job better and to get a better understanding of why your finances are as good, bad or mediocre as they are.
What skills do you look for in an accountant? Leave your comments below.
Image credit: www.cafecredit.com
Four Things to Know Before You Hire a CPA
Hiring a New CPA
Hiring a new employee for your team can be a very exciting endeavor for any business. Hiring a new employee for either a part time or full time position is a great sign that your company is growing and prospering. But while it can be exciting, it can also be nerve-wracking because nobody wants to waste money by hiring the wrong person for the job.
Here are 4 things you need to know before hiring a CPA:
Know Why You are Hiring a CPA
Before you hire a CPA, you want to make sure you know exactly why you’re hiring him or her. Some people hire a CPA because of the anticipated income they expect will come their way; others hire CPAs to help pull them out of their financial holes. Whatever your particular situation, make sure you know why you’re hiring a CPA.
Know What Your CPA Will Do
One of the first things you’ll need to explain to your CPA is what you’re going to expect them to do. This is not something you can simply wing on an interview. You should know beforehand precisely what you expect them to do.
Know Your Financial Situation
Be open and honest with your accountant. This means that you must let them know if your accounting is in good or bad condition. Let them determine if they want to take you on as a client or if they don’t have the capacity to handle the damage you have done.
Know Where You Want to Go Financially
There’s a famous quote that says if you don’t know where you’re going, any road will lead you there. This is very true. Before you meet your accountant, you need to have a clear idea of where you want to go financially.
Image credit: frankieleon
The Difference between a CPA vs. Bookkeeper
Bookkeepers & CPAs
If you stop and talk to business professionals across various industries, you will probably hear the words CPAs and bookkeepers used interchangeably. Upon first reflection, both job descriptions appear very similar; however, you would be surprised to know that CPAs and bookkeepers do have a number of important differences.
A bookkeeper, by definition, is an administrative professional whose primary job is to follow a set of procedures or tasks related to the financial management of a business. They generally do not need to have a particular certification in order to perform their tasks.
An accountant, on the other hand, is more specialized, and often handles higher level financial structuring and analysis. Becoming a CPA requires a four year college degree and a passing grade on the CPA exam. So while most companies do use the two titles interchangeably, it’s important to remember there are several key things which distinguish them.
If you really want to see your business grow to another level, it is recommended that you consider hiring both a CPA and a bookkeeper as opposed to trying to roll both of these jobs into one position. Be sure to allow each of these employees to actually operate based on their preexisting skill set. Hiring both a CPA and a bookkeeper will not only save you money in the long term, it will also help take your business to the next level. Many people may try to talk you out of hiring both on your team, but ultimately, at the end of the day, you cannot have a bookkeeper on your team without a CPA to guide your bookkeeper along the way.
Image credit: samuelallencpa
Four Ways You Can Help Support Your CPA
Assisting Your CPA
Hiring a CPA can be an exciting experience. Once you get a CPA on your team you will be able to see that hiring a CPA is one of the best decisions you can ever make as a business owner. However, you need to know how you can best support your CPA once you hire them.
Here are three ways you can assist your CPA:
Be a Good Listener
Being a CPA can be a stressful job, especially if your businesses finances are not in a good place. Your CPA may not ever express to you how stressful their job is; however, being a good listener is imperative if you’re going to be an effective boss. Instead of focusing on what they’re saying, focus on what they’re not saying so that you can better know how to support them.
Take Their Advice
If your CPA tells you something about your finances, take their advice. They will never tell you something that they don’t believe is in the best interests of the company. Do not discredit or undervalue their advice; be aware that whatever they tell you is probably going to eventually help your business grow financially.
Encourage Time Off
Good employees will work hard for you, but you also have to make sure they know they are appreciated. A great way to not only support your employees but keep them uplifted is by encouraging time off or even breaks throughout the day. Not only will giving time off help support your CPA, it will also help them perform at a higher level.
Image credit: Cydcor
Five Bad Money Habits Your CPA Can Help You Break
Money Habits
Let’s face it, we all have bad money habits that we need to break. While we may not want to admit it, it’s a reality that many of us face every day. If you want to know whether someone has bad money habits, the best place to check is their bank account. If their account is always in the red, you’ve definitely found a bad money habit.
Having bad money habits does not mean you are a bad person, nor does it necessarily indicate that you’re a bad business person either. What it does say is that you lack self-control as it relates to your finances. Sadly, this is a flaw many business owners across America share.
Here are five bad money habits your CPA can help you break. Breaking these bad habits can help get business on the right path.
- Spending Money Before You Get it
- Spending Money You Don’t Have
- Spending Money on Unnecessary Purchases
- High Interest Rate Credit Card Usage
- Failing to Calculate Taxes
Do any of these bad money habits sound like the habits of your business? Don’t worry, you’re not alone. 75% of businesses have one or more bad financial habits. With diligence and perseverance, these habits can be broken.
These bad money habits are exactly why it’s imperative to have a CPA on your team to help you break the bad financial habits which are extremely hard to break all on your own.
Image credit: Pictures of Money
How Hiring a CPA Will Positively Impact Your Business
CPAs & Business Growth
Hiring a CPA could singlehandedly be the best decision you ever make as a business owner. While you may not necessarily understand everything that the CPA does, you do understand that without a financially sound person on your team you may be putting your business in financial jeopardy.
Here are just a few ways a CPA can positively impact your business:
Eliminate Stress
The number one stressor for most businesses is, yes you guessed it, finances. Adding a CPA to your team will eliminate this source of stress by placing a trusted individual in care of your business finances to ensure you are making better financial decisions every day.
You Will Gain More Time
Much of the time wasted by small business owners is the time they waste doing things they aren’t equipped to do, such as financial planning and forecasting. By hiring a CPA, you instantly gain more time to focus on the things you care about most, growing your business and doing what you’re good at.
Your Company Will Begin to Grow
Having someone on your team manage your finances will put your company in a position to grow financially because you have someone who’s always watching and monitoring your finances. Not to mention, a CPA can also help manage the payroll for your company and show you if and when you’re ready to bring more employees onto your team.
Teaches the Importance of Collaboration
Teamwork makes the dream work and hiring a CPA could be the beginning of fostering that type of collaboration. Having a designated CPA proves not only to others but also to yourself that you’re willing to place your finances into someone else’s hands in order to grow in areas you’ve previously been unsuccessful in.
Image credit: Pictures of Money
What to Bring When You Meet With Your CPA to File Taxes
If you have never hired a CPA before to handle your taxes you may be a little overwhelmed during your first meeting. You can be overloaded with a great amount of information and terminology which may be unfamiliar to you. While this meeting can be overwhelming, it can be one of the best decisions you ever make as a business owner.
Tax Items
If you’ve ever wondered what exactly you should bring when you first meet with your CPA to file taxes, here are a few items to get you started:
Notebook
Bring a pen and paper with you and get ready to take notes when you go meet with your CPA. Every piece of information they provide you with is designed to help you as a business owner. If you don’t write it down, statistics show that you are almost guaranteed to forget it. Take copious notes during your meeting.
Pay Stubs
Your CPA needs to know exactly how much money you are bringing in each and every year, and the only way to demonstrate this is with a pay stub. Make sure you bring in the pay stubs from the last year of both you and your spouse (if you’re married) to help your CPA better calculate your potential refund.
Childcare Bills (if you have children)
Childcare bills (specifically for daycare and doctor’s visits) are important to include when you’re meeting with your CPA. CPAs can work with you to use these items as potential tax write-offs for you and your family.
Dependent Care Information
Do you have a parent or spouse or someone who is a dependent of yours who needs special care? There’s also a tax write off for you, but only a CPA can help you through that process as they’ll know more information about how to adequately navigate that situation than anyone else.
Business Related Travel Documents
As a business owner, it’s important that you always track your mileage when traveling. This will not only show you how much you’re traveling each month, but it will also be used as a business travel expense that you may be rewarded for at the end of the year by the IRS.
Image credit: Horia Varlan
Four Ways to Know When It’s Time To Hire a CPA
Hiring a CPA
In the course of running a business, usually there comes a time when it is necessary to hire an accountant. While you may feel as though your company cannot afford to hire a CPA, it is often better to make an investment before you need to hire one as opposed to waiting until you desperately need to. Here are just a few ways to identify when it’s time to hire a CPA.
Your Business Always Owes Back Taxes
Notice that you always owe money at the end of each year? Perhaps you are doing something wrong. Hiring a CPA will not only help you manage your budget better throughout the year but it will also help you with your end of the year taxes.
You Never Have Money To Pay Your Employees
Being unable to pay your employees could literally break your company into pieces. In a generation where practically everything is accessible online, when you choose not to pay your employees (or just can’t afford to) you can almost always expect online backlash.
You Don’t Know How to Manage Money
Don’t know how to manage money? Now more than ever is the time for you to invest in a CPA. While a CPA can’t make you manage money well, a CPA can easily guide you in the right direction to insure you are making good decisions for not only yourself but also for your business.
You want to Improve Your Credit Rating
Improving your credit rating can be a daunting tax especially if you don’t really know what you’re doing. Hiring a CPA can help you improve your rating by making sure you pay all of your bills on time. There are also several other tactics that CPAs can help you with in order to make sure our credit rating gets better before it gets worse.
Reducing Debt
Getting out of debt can be extremely challenging, especially if you don’t know how to negotiate with creditors. Serving as the middle man between you and creditors will not only save you time but is also one of the greatest assets that CPAs bring to the table.
Image credit: Corporate Traveller
Harvest a Break: Tax Deductions and Growing Your Own Food
Farming & Taxes
Growing your own food can be both financially and personally rewarding: not only can you provide food for your local community, but you could conceivably become self-sustaining. In addition, you can also deduct quite a bit of your operating costs from your tax liability. Before you start tilling, check the tips below to help maximize your deduction and start harvesting tax return dollars.
Profitable farms only
First and foremost you most prove to the IRS that you intend to generate a profit from what you reap: hobby farms or self-subsistence farms do not qualify. This doesn’t mean you have to immediately start turning a profit: you can claim deductions for business costs as you work to get established. For example, if you spent money on livestock, tools, manure, and so on, you can deduct those costs from your tax liability so long as they are pertinent to your farm business. The easiest way to do so is to maintain meticulous records of transactions. Do note, however, that if you don’t turn a profit for a least three out of five years the IRS may assert that your farm is a hobby and not a business.
It’s not just for food
The tax deduction is not just for food: you can claim the deduction to raise horses, cattle, bees, poultry, and even to produce building material for goods such as crafts or furniture. The same rules apply: you have to work to turn a profit and be able to demonstrate to the IRS that you intend to do so.
That also includes depreciation
Running a farm is no easy task, and accordingly you are likely to have lots of tools or machinery to help you out. Good news: major tools can be depreciated, and small tools are fully deductible. Again, you must have accurate records for the IRS to claim these deductions.
Not all states are the same
While all 50 states offer preferential tax rates to agricultural land, ease of claiming this break varies from state to state. Make sure you’re playing by the rules, obtaining any required permits and complying with zoning laws, and you should be able to reap the benefits on your return.
Image credit: barockschloss
4 Deductions Self-Employed Professionals Should Utilize
Being self-employed can often feel like having two jobs rolled into one: not only do you have your work or service you provide, but you often have to solicit new business, do your own marketing, bookkeeping, expense tracking and so on. Although you’d likely be best served by a CPA, here are a few deductions to help maximize your tax return.
Tax Deductions
Business travel costs
Track everything when you travel for work! This includes gas, meals, lodging, airfare, train tickets, even regular maintenance on a work vehicle. Remember that any non-business activities along the route cannot be deducted as a business expense. That means if you take a detour to see your parents on the way to a business conference, you cannot deduct any expenses incurred related to your detour.
Social security taxes
You can write off half of what you pay in social security taxes. This is only applicable if you’re self-employed and thus are paying the full 15.3% tax by yourself, instead of splitting the cost with an employer.
The home office deduction
Your business may have an office or facility, but odds are if you’re self-employed you do at least some work at home. While no one really enjoys bringing their work home, the good news is that if you have a dedicated business work space in your home, you can deduct that from your tax liability. This includes part of your rent, any associated utilities (e.g., your internet service fee), or you can use the simplified method: deduct $5 for every square foot that qualifies for the deduction.
Health insurance premiums
If you’re self-employed you can deduct medical insurance premiums for yourself and your family. Further this applies whether or not you itemize your deductions, but you’re automatically disqualified for the deduction if you are eligible for employer-sponsored health insurance through another job.
Image credit: www.rentvine.com
