What to Look for in Local Accounting Firms
Local accounting firms are around every corner, in many strip malls, and in office services locations. It is not difficult to find one, but it is a bit more of a challenge to find one that will become a partner in the growth and profitability of your business. You could be short-changing your business and paying the government too much money every year if you make the wrong choice based on limited services information.
The services that can be provided are often not included by some local accounting firms. They have their expertise and limit their services to that experience and ability to provide quality services. Consider seeking out local accounting firms that provide some level of the following services:
- Bookkeeping Services – While you can hire a bookkeeper for the company or seek out a bookkeeper as an independent contractor, efficiency and sometimes accuracy in reporting for taxes can be the result. Having the bookkeeping feeding the tax preparation service provides better planning and accuracy.
- Tax Preparation – Though tax preparation as a service is an annual event, it is a composite of activities performed throughout the year. With bookkeeping as a coordinated function, the tax return preparation will be more accurate and efficient, often saving money in fees and taxes.
- Tax Planning – Tax preparation is annual while planning is ongoing and extremely valuable in minimizing taxes for the business and the owner(s). Planning involves working with owners for actions involved in the growth of the business. From the purchase of equipment to real estate, the CPA in full service local accounting firms can advise the business in using delayed or accelerated purchases or income booking. Tax planning advice often includes decisions about depreciation of major expenses as well.
- Audit Avoidance and Representation – Local accounting firms that do not have a CPA, Certified Public Accountant, on staff lose one cog in an efficient tax minimization plan with audit protection through high level experience and planning. They can hire one, when necessary, but the hired CPA will enter the picture after possible mistakes that cannot be corrected once the IRS takes notice. The other benefit of an on-staff CPA is when they are accredited to practice in front of the IRS. They can represent your interests and handle IRS questions in the unlikely event of an audit.
- Entity Formation or Changes – Often the formation of a business is not considered until later in its growth. The business starts small, perhaps as a sole proprietorship or partnership, but grows and a change could be wise. Full service local accounting firms will have the expertise to guide the owner(s) of the business in a decision about initial entity formation or a change later to the LLC or corporate structure.
- Business Cleanup – If you are considering local accounting firms for a change or expansion after your business is up and running, you may already have some issues that are costing you money in taxes. The right firm will have the expertise to thoroughly audit your operations and accounting for areas that need improvement.
As you check out local accounting firms, keep this list of services in mind for an end-to-end solution that should save you a lot of money over time.