CHOOSING AN ACCOUNTANT

While some small businesses are able to manage
their accounting needs without benefit of in-house
accounting personnel or a professional accounting
outfit, the majority choose to enlist the help of accounting
professionals. There are many factors for the
small business owner to consider when seeking an
accountant, including personality, services rendered,
reputation in the business community, and expense.
The nature of the business in question is also a
consideration in choosing an accountant. Owners of
small businesses who do not anticipate expanding rapidly
have little need of a national accounting firm, but
business ventures that require investors or call for a
public stock offering can benefit from association
with an established accounting firm. Many owners of
growing companies select an accountant by interviewing
several prospective accounting firms and requesting
proposals which will, ideally, detail the
firm’s public offering experience within the industry,
describe the accountants who will be handling the
account, and estimate fees for auditing and other proposed
services.

Finally, a business that utilizes a professional
accountant to attend to accounting matters is often
better equipped to devote time to other aspects of the
enterprise. Time is a precious resource for small businesses
and their owners, and according to the Entrepreneur
Magazine Small Business Advisor, ‘‘Accountants
help business owners comply with a
number of laws and regulations affecting their recordkeeping
practices. If you spend your time trying to
find answers to the many questions that accountants
can answer more efficiently, you will not have the
time to manage your business properly. Spend your
time doing what you do best, and let accountants do
what they do best.’’
The small business owner can, of course, make
matters much easier both for his/her company and the
accountant by maintaining proper accounting records
throughout the year. Well-maintained and complete
records of assets, depreciation, income and expense,
inventory, and capital gains and losses are all necessary
for the accountant to conclude his work; gaps in a
business’s financial record only add to the accountant’s
time (and to his or her’s fee for services rendered).
Such attitudes also reflect an ignorance of the
potential management insights that can be gleaned
from accurate and complete accounting information.
Many small businesses, noted Ian Duncan in CMA
Magazine, see accounting primarily as a ‘‘paperwork
burden. It is often delegated to the firm’s external
accountant, and it is designed primarily to meet government
reporting and taxation requirements.’’ But
Duncan and many others contend that small firms
should recognize that accounting information can be a
valuable component of a company’s management and
decision-making systems, for financial data provide
the ultimate indicator of the failure or success of a
business’s strategic and philosophical direction.
FURTHER READING:
Anthony, Robert N., and Leslie K. Pearlman. Essentials of
Accounting. Prentice Hall, 1999.
Bragg, Steven M. Accounting Best Practices. John Wiley, 1999.
Cornish, Clive G. Basic Accounting for the Small Business:
Simple, Foolproof Techniques for Keeping Your Books Straight
and Staying Out of Trouble. Self-Counsel Press, 1993.
Duncan, Ian D. ‘‘Making the Accounting System All That It
Can Be.’’ CMA Magazine. June 1993.
Fuller, Charles. The Entrepreneur Magazine Small Business
Advisor. Wiley, 1995.
Lunt, Henry. ‘‘The Fab Four’s Solo Careers.’’ Accountancy.
March 2000.
Strassmann, Paul A. ‘‘GAAP Helps Whom?’’ Computerworld.
December 6, 1999.
SEE ALSO: Certified Public Accountants