Small business owners frequently face the challenge of keeping their financial books in order while also aiming for business growth. While doing so, it’s not uncommon for them to try to do everything themselves to cut costs, but this can sometimes lead to poor financial management and even contribute to the business’s failure. That is why certain tasks, such as tax accounting, should be outsourced.
Poor in-house financial management is said to be the cause of 70% of business failures. Hiring a tax accountant allows small business owners to focus on growing their company while also having peace of mind that their financial records are in order.
So, how can businesses ensure that they hire the best tax accountant for their unique and complex needs?
In this blog, we will go through some of the crucial steps to ensure business owners hire the right tax accountant for their business.
Select an experienced accountant who specializes in your industry
Accounting can vary greatly depending on the industry, so it’s critical to find a candidate with relevant industry experience. Businesses should not only consider the number of years of experience a potential accountant has but also the types of businesses they have worked with. An accountant who has primarily worked in the auto industry, for example, may not have insights into a business if the company is based in the hospitality industry.
Hire accountants with membership in a professional association
In addition to relevant qualifications from a recognized institution, looking for an accountant who is a member of a professional accountants’ association is an excellent idea. These associations typically test applicants to verify their technical skills and theoretical knowledge and also require ongoing professional development to maintain industry standards. This is a great way to ensure that the candidate being considered is up to date on the latest accounting practices and standards.
Place importance on good communication skills
It is critical for small business owners and their accountants to communicate effectively. Business owners need to be able to sit down each month and review key financial reports, such as the profit and loss statement, balance sheet, and cash flow statement. The accountant should be able to explain complex accounting concepts in simple terms so that the business owner always understands their financial position.
Asking the candidate to explain a few key concepts, such as gross and net profit, job costing, or deferral transactions, during the interview process might be a good start. This will give business owners an idea of their communication skills and ability to make complex concepts, data, and information understandable.
Assess Integrity and Trustworthiness
When hiring someone to manage a business’s books, business owners are putting a lot of faith in their integrity and trustworthiness. These traits can be assessed during the interview process by asking open-ended questions that get the candidate talking about ethical challenges they have faced in their previous workplaces.
For instance, it may be worthwhile to ask:
“Tell me about a time when you made a mistake. What did you learn from the situation and how did you handle it?”
“How would you react if someone else took credit for your work?”
“What would be your course of action if you discovered an unethical or fraudulent accounting practice at work?”
These types of questions can reveal the candidate’s ethical values and how they deal with difficult situations.
Hiring a tax accountant entails much more than simply finding someone who can crunch numbers. An accountant is critical to the success of a company. As a small business owner, you want to make certain that you find the right person to assist you in managing your finances and providing valuable insights not only for the present day but also for years to come.
If you are looking for experienced, qualified, and reliable accountants in Melbourne, look no further than Lotus Smart.
Lotus Smart is a team of highly skilled bookkeepers and accountants committed to delivering high-quality professional services. Contact us at firstname.lastname@example.org for a consultation right away or call 0426 267 484!