Things to Consider When Hiring an Accountant

Taxumo
Taxumo
Aug 9, 2017 · 3 min read
[Image: Pixabay.com]

When we start a business for the first time, one of the first questions we ask is, “Where can I find a good accountant?”

But before we even get to that question, there are two important questions we need to answer first:

1. What will the accountant do for you?

If you’ve never run a business, you might imagine the accountant doing all sorts of things that you would willingly pay to keep out of your hair: paperwork, bookkeeping, balance sheets, tax computations, tax filing, etc.

What you might not realize is that if you’re just starting your business — and especially if you’re running a service-oriented business — the bookkeeping is minimal. In your first few years, you may not need bookkeeping and balance sheets at all, because rather than itemizing your expenses, you can choose the heaven-sent optional standard deduction method of reporting tax expenses.

Also, the accountant might not even fill in your books of accounts. Instead, he or she might just tell you later (like three years later, when you see your books at her office for the first time and find them completely blank) that all you need to fulfill BIR requirements is to renew (and pay for) your books every year.

As for tax computations and filing, facilities like Taxumo make taxes so easy to compute and file nowadays — the forms are self-computing and you can often file and pay online — that you might not need an accountant to do them at all. (The entire process will likely take 15 minutes of your time, max, per month.)

So now, the question is, if you remove tax filing and bookkeeping from the accountant’s to-do list, will there still be other things you need your accountant to do for you?

2. Have you ever tried doing the things you expect your accountant to do?

So you expect the accountant to do monthly tax filing and annual permit renewals. Have you ever tried doing these yourself?

It may sound counterintuitive that you should first do the things you want to hire an accountant to do in your stead. After all, isn’t that your main reason for hiring an accountant — so you won’t have to do these things yourself at all?

What I always tell new business owners is that it’s fine to let the accountant do these things for you on a regular basis, month after month, year after year.

But it is due diligence on your part, as business owner, to at least try doing all these tasks once yourself before you hand them entirely over to your accountant.

Be warned: tax and business permit issues can very quickly cause the downfall of your hard-grown business.

If you do not have a deep understanding of tax and permit requirements, well, there are too many stories around of people missing these requirements because they gave their accountants free reign.

Remember, it’s your business, not your accountant’s.

If you miss government-mandated requirements because you did not take the time to fully understand them, then the government will be running after you, not your accountant.

Taxumo

Written by

Taxumo

Taxumo is a web-based tax submission platform that helps freelancers, professionals, and self-employed individuals file and pay for their taxes online.

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