What questions should I ask an accountant when starting a business?
From “How can I reduce operating expenses for my business?” to “Which entity gives me the best tax savings and flexibility?”, here are the 8 answers to the question, “What question should I ask an accountant when starting a small business?”
- How Can I Reduce Operating Expenses for My Business?
- How Can I Set Things Up for Maximum Tax Advantage?
- What Do I Need To Be Doing Know To Scale My Business in The Future?
- What Are My Tax Obligations?
- What Can I Do to Improve My Cash Management?
- What Kind of Accounting Systems Do You Recommend?
- What Type of Business Structure Should I Choose?
- Which Entity Gives Me the Best Tax Savings and Flexibility?
How Can I Reduce Operating Expenses for My Business?
Businesses can cut wasteful spending and lower costs by continuously analyzing operating expenses; doing so can increase profitability. When starting a new business, it is important that you maintain low operating expenses. This is where your accountant can help you by keeping track of all your expenses and formulating a better expense plan. By maintaining a strict budget, you will be able to maximize your profits and stay within the bounds of your business plan
How Can I Set Things Up for Maximum Tax Advantage?
When talking to an accountant about starting a small business, you should start with a simple question: “How can I set things up to get the biggest tax advantage?”This question should prompt your accountant to talk about a few things. To start, a good accountant will walk you through how to structure your business legally. Should you be a plain LLC? Or should you form an LLC and then make the S-Corp election?
These kinds of decisions are important and can have major implications. The accountant should also address things like managing expenses and carving out a dedicated home office (if that applies to you). You may be able to claim certain expenses as “business expenses,” but you’ll need an accountant’s guidance. And you might need to set things up the right way to do it. A good accountant isn’t someone who just does your taxes. A good accountant is someone who helps you plan in advance to save on taxes.
What Do I Need To Be Doing Know To Scale My Business in The Future?
When you are starting a small business, you will need to know a lot of things. You will want to make sure your accounting is up-to-date, that your taxes are taken care of, and that your finances are in good shape. One of the best questions to ask an accountant when starting a small business is: “What do I need to be doing now?”This question can help identify gaps in your knowledge and allow you to learn new skills. It also allows you to take charge of your business by telling the accountant what you want out of the experience.
What Are My Tax Obligations?
Tax issues are among the most important that you should take up with your accountant when starting a small business. Find out what taxes you have to pay and the amount. Depending on the type of business you operate, your business structure, and your business location, you may be required to pay income, sales, employment, or excise taxes.
Let your accountant explain the various tax obligations and choose the most favorable one, depending on your business profile. When asking about tax obligations, consult tax deductions. You can claim deductions for certain business expenses, such as the cost of supplies, travel, and employee benefits. Consult that with your accountant.
Remember that mistakes or actions that don’t comply with tax regulations can cost you a lot. After all, you don’t want the IRS on your mind.
What Can I Do to Improve My Cash Management?
Any small firm depends on cash flow to survive. It gives you the ability to pay bills, pay your staff, reinvest in the company, pay off debts, get a return on your investment, and handle any unanticipated occurrences. A strong company concept and robust revenues might not be sufficient if you aren’t controlling your cash flow.
Ask your accountant if they have any suggestions. They might propose new key performance metrics or techniques for collecting receivables. They might also assist you in developing a cash flow projection so you can anticipate and prepare for any brief cash problems.
What Kind of Accounting Systems Do You Recommend?
When starting a small business, one of the first questions I should ask an accountant is what kind of bookkeeping and accounting systems they recommend. It’s important to me to know if they can work with my current software or if they recommend something else that could be more beneficial. I’ll want to know how often I should expect them to review my records and what will happen if things get complicated beyond the scope of their services. Finally, it would be helpful to understand what kind of advice and guidance they can provide regarding filing taxes and setting up employee payrolls. These details are essential for ensuring that my accounting processes are handled as efficiently and cost-effectively as possible.
What Type of Business Structure Should I Choose?
When starting a small business, it’s important to ask your accountant about the best type of business structure to choose (e.g., sole proprietorship, S-corporation, or C-Corporation). Each structure has advantages and disadvantages; the one that is right for your business will depend on your specific circumstances and goals. To get the best response, you’ll want to conduct some research and come prepared with details on your business. Some items to bring to your meeting include detail on your future expansion plans, your plans for partners and investors, and your estimates on initial capital investment. Then, your accountant will be able to outline the pros and cons of each structure and recommend the best one for your situation.
Which Entity Gives Me the Best Tax Savings and Flexibility?
When starting a small business, the consideration for an accountant should be approached from a team member mentality. The reason? Most will consult an attorney regarding the best entity to set up, and they should. However, attorneys primarily approach this from a protection standpoint.
That consideration does not take into account if the entity of choice is the best tax entity for this new small business. Attorneys and accountants should work collaboratively on entity considerations in the interest of a small business owner.
The question to the accountant would be, “Which entity gives me the best tax savings and flexibility?” The follow-up question would be “What should I expect for cost of compliance?”
We’re in a time where, too much cookie-cutter information is given on the internet, and consideration isn’t given to various state nuances, industry, and long-term objectives. Having an accountant at the onset is invaluable.
Submit Your Answer
Would you like to submit an alternate answer to the question, What question should I ask an accountant when starting a small business?