Finding someone you can trust.
Studies show that accountants are often a business person’s most trusted advisor. Your accountant will have access to your most personal financial information. Be careful.
This is where the Certified Public Accountant can help. The highly-respected CPA credential indicates that the holder has passed the challenging CPA exam and is licensed in at least one state. In most states, a CPA must now also earn 150 college credits (equivalent to bachelor’s and master’s of science degrees) and complete a working internship for at least two years. CPA’s must also adhere to ethics guidelines that are enforced by the AICPA and state board of accountancy. States also require CPA’s to take courses every year to keep current with new rules.
Before you can trust your accountant, however, make sure that they know what they’re doing.
Finding someone with knowledge and experience.
The CPA credential is focused on independent auditing of companies and financial reporting, rather than taxation or advising small businesses. Only a small portion of the CPA exam involves taxation and advising small businesses. Therefore, an accountant who is a CPA is not enough. You also need to make sure that your accountant is experienced and knowledgeable in both taxation and advising small businesses. A bonus is to find a CPA who specializes in your type of business.
The IRS requires tax preparers to “register” their services. However, IRS rules exempt CPA’s, and many other tax preparers from actually taking any kind of qualification exam. Therefore, registration with the IRS does not necessarily indicate that an individual is has sufficient knowledge and experience to prepare your taxes.
A tax attorney is usually well prepared to handle your tax situations, be they mundane typical filings or more difficult matters. However, tax attorneys can be more expensive than other accountants.
To find a good accountant, your best bet is to ask around. Ask for tips from colleagues in your industry or other local business people you know. Then carefully interview a prospective accountant, and ask him or her about the services that they typically provide, and for the names of other clients. Speak with some of those clients and other people who have known your prospective accountant for a long time. Make sure your accountant is familiar with local tax laws in your state and city.
If your business is small, your best bet will be either a sole practitioner or a small firm (typically two to five partners). A sole proprietor is usually more accessible. However, a small firm can usually offer a broader array of services, more thorough quality control, and access to a tax attorney.