Congratulations! If you’re an entrepreneur or business owner on the hunt for an NYC accountant, it’s a sign of growth. It’s also a smart move. In a survey of 393 small business leaders, an accountant was ranked as the most important professional used by their business.
From potential tax savings to improved cash flow, an accountant is worth the investment – if you hire the right one. Before hiring an NYC accountant, ask these 7 questions:
Question #1) Are You a CPA?
Ideal Answer) Yes!
This is the first and most critical question to ask. You deserve an NYC accountant that’s also a CPA.
Anybody can plug numbers into TurboTax, but that’s not what real accounting and tax services are about. The real work begins long before taxes are due. It’s about making smart decisions – suggested by your NYC accountant – that will help grow your business.
When it comes to managing your business financials, there are 4 basic types of professionals you can use. They’re outlined in order from least to most effective:
You! Many startups see dollar signs when they think of hiring an NYC accountant (see question #4). They opt to manage their taxes and financials themselves. The DIY approach may be tempting, but it’s a risky move. Do you know the new latest changes to the tax code?
Plus, time is money. Perform some simple math. What is your hourly rate for your services? Maybe an NYC accountant has a higher hourly rate. However, they can get the job done in half the time. Plus, your time would be better spent growing your business, right? Don’t be penny wise and pound foolish…
A bookkeeper, well, keeps your books! You hand over receipts, bank statements, invoices, etc. The bookkeeper records these transactions – usually using software like QuickBooks. Bookkeepers can track accounts payables and receivables, handle 1099 forms, and process payroll.
An NYC accountant will go beyond bookkeeping: preparing reports needed for taxes and analyzing your financials.
CPA (Certified Public Accountant)
For the most bang for your buck, hire an NYC accountant that’s a CPA. Why?
- NYC accountants with “CPA” after their names have gone through extensive training and are licensed by New York State to perform accounting services.
- Only a tax attorney or a CPA can officially represent you when dealing with the IRS. To the IRS, a non-CPA accountant is an “unenrolled preparer.”
- Most CPAs have bookkeepers on staff, so it’s a “one stop shop” – no need to hire a separate bookkeeper.
Question #2) Do You Work with Small Businesses and Startups?
Ideal Answer) We Do, and We Love It
In a perfect scenario, the NYC accountant you choose will be a CPA and have prior experience as an entrepreneur or small business. After all, the CPA is a business owner, too!
As a startup, solopreneur, or small business, the tax and financial decisions you make now can impact your future success. An experienced small business accountant can help guide those decisions.
Ask the accountant what percentage of their current client base consists of small businesses. It should be at least 50%.
You shouldn’t feel “second best” to big established companies. Any NYC accountant that makes you feel that way should be checked off your list – ASAP.
Question #3) How Often Are You Available to Work with Me?
Ideal Answer) Whenever You Need Us.
You should feel comfortable asking questions and seeking advice – at any time. An NYC accountant with small business experience should encourage you to contact them. Get even more specific with these questions:
- Can I email you questions? How long is your typical response time?
- Will I get facetime with you (the CPA)? Or, will I be meeting with a bookkeeper?
- Could we set up scheduled meetings either by phone or in-person?
Question #4) What Are Your Fees?
Ideal Answer (OK, It’s Actually a Question) What Are Your Needs?
If you ask an NYC accountant about fees and they give you a price immediately? It’s buyer beware.
A good NYC accountant will first set up an initial phone or in-person consultation to assess your needs. Then, they’ll provide a fee structure based on your budget.
If the accountant gives you a price that sounds too good to be true? You won’t be getting an NYC accountant who has your back. Instead, your accountant should be proactive – always looking over your shoulder saying: “You should be taking this tax deduction!” or “Have you thought about restructuring your business to free up cash flow?”
Beware of an NYC accountant who lowballs you over the phone. They may be trying to get you in the door where the nickel and diming begins.
Question #5) Do You Provide Quickbooks Training?
Ideal Answer) Yes, or You Can Use Our In-House Bookkeeping Services
An NYC accountant that specializes in small businesses is flexible. They understand you’re trying to save money wherever possible. While preparing your own tax returns isn’t wise, many startups do keep their own books. Your accountant should support that choice and offer initial training in QuickBooks for a set fee.
Question #6) I’m Just Starting My Business, Should I Set Up an S-Corp?Ideal Answer) That Depends, Let’s Talk
Unsavory NYC accountants will say “yes, yes, definitely set up an S-Corp.” Why? Because an S-Corp is a more complicated business entity. That may require more work (and more income) for an accountant out to make a quick buck.
An S-Corp might be your best option by providing significant tax savings that offset extra accounting fees. But it truly depends on your needs. Those needs can only be uncovered during a thoughtful initial consultation with your NYC accountant.
As a side note, an LLC may not even be the best business structure – especially if you’re in NYC. To become an LLC, you must first notify the public by purchasing ad space in a news publication, which can run over $2,000 in NYC where ad space is at a premium. If you’re unsure which business structure to choose, contact us for guidance.
Question #7) How Many CPE Credits are You Earning This Year?
Ideal Answer) More Than 40. Plus, We Require Our Staff to Attend Seminars.
For an NYC accountant to maintain CPA status, they must acquire at least 40 CPE credits each year (Continuing Professional Education credits).
To a good NYC accountant, those CPE credits are more than a requirement – the seminars and training needed to achieve the credits keep the accountant informed of the latest tax laws and codes.
The best NYC accountants go above and beyond, like Bob Russo, CPA, who is on track to achieve 120 hours. Bob and his team also regularly read the industry’s top publications like Tax Advisor, Real Estate Taxation, and Journal of Taxation. When searching for an NYC accountant, browse articles online at these 3 journals and specifically ask your potential accountant about something you’ve read.
To truly maximize the benefits of working with a CPA, there are more steps you can take as well – from staying organized to being 100% honest about your financials.
When it comes to finding an NYC accountant, do your homework. Use these 7 questions to interview CPAs until you find one who seems to genuinely care about your business – and your financial wellbeing.