How to Choose Accounting Services

Question: Yikes! I've had it! I can't go another year doing my business taxes and other accounting work myself. It's too time-consuming and complicated. How do I find the right kind of help to take this burden off my shoulders?

Answer: Before you became a business owner, keeping track of your finances and doing your own taxes was probably a cinch. Easy-to-use bookkeeping software such as Quicken and QuickBooks helps you keep control while doing it yourself.

But like many entrepreneurs trying to shepherd an expanding enterprise, it might now make sense to turn over tax, accounting and other financial chores to outside specialists. Choosing the right type of accounting help, however, is an important decision. An outside accountant can be one of your most trusted business advisors and a key to your success. Although many business owners work with big national firms such as Ernst & Young or Deloitte & Touche, most prefer to work with small independent firms or solo accounting professionals.

Keep in mind that accountants are not bookkeepers. They can only prepare financial statements and tax returns based on the numbers that you give them. Bookkeeping services, if offered, will be extra.

Most small companies don't need a full-time accountant - just someone to crunch numbers monthly or quarterly and prepare all of the necessary tax filings. But if your personal recordkeeping style leans more toward the proverbial shoebox full of receipts rather than crisp spreadsheets, you should also consider full or part-time bookkeeping help to keep you in fiscal shape.

Factors to consider when selecting a certified public accountant (CPA) or other financial pro include these:

1. Services needed. List the services you think you need, such as tax preparation, financial reports, balance sheets, invoicing, payroll services, general bookkeeping, someone to set up your books or suggest cost savings. Some firms may handle it all, or you may need to split the tasks.
   
   
2. Cost. Fees vary greatly, from $50 per hour to $300 or more. Some accountants will provide a specified list of services for a flat monthly fee, and may provide less costly help for bookkeeping and other tasks that don't require CPA-level training.
   
   
3. Who will you be working with? If you are considering a larger accounting firm, find out which people you will be working with directly.
   
   
4. Philosophical fit. Try to match your general philosophy with a firm that is as conservative - or aggressive - as you are on tax matters.

Here's where to find help:

• CPA Directory is a huge online listing of CPAs nationwide and can help you find an accountant in your area. The Web site also offers helpful advice on hiring and working effectively with a CPA. Visit www.cpadirectory.com.
  
  
• NetSuite Small Business is a Web-based service that offers complete "back office" financial solutions for small companies, from accounting and sales to fulfillment and support. Worth a look for fast-growing firms seeking more than just accounting help. Visit www.netsuite.com.
  
  
• Balance Your Books (BYB) offers online bookkeeping services for small and mid-size businesses. You deliver the data and their accountants and bookkeepers will process and analyze it and report back to you. Access your financial reports anytime via a secure Internet connection. Visit the Web site at www.balanceyourbooks.com or call (877) 211-1011. BYB is based in Clifton, NJ, but has clients nationwide.
  
  
• If you plan to hire your own bookkeeper, make sure the person you choose is qualified. How? Administer the "Bookkeepers Hiring Test" available free from the American Institute of Professional Bookkeepers at their Web site (www.aipb.org). The AIPB is based in Rockville, MD and has about 35,000 members. Call (800) 622-0121 or e-mail hiring@aipb.org.
  
  
• Pro Bookkeepers helps small business owners find bookkeeping solutions. Visit the Web site at www.probookkeepers.com.
  
  
• Enrolled Agents (EAs) are licensed by the Federal government to prepare tax returns. EAs have either worked for the IRS or have passed a rigorous IRS exam. They are savvy tax experts, but generally don't have the degrees of CPAs and tend to charge less. Visit the National Association of Enrolled Agents Web site at www.naea.org or call (800) 424-4339.