Here are 10 things you should know before hiring an accountant for your software business. Let’s get started!
Finding an accountant for your small software business can be an intimidating process. It requires research, an understanding of financial software, and knowledge about budgeting and tax information. But you can learn these concepts quickly, thanks to online resources.
What to Know Before Hiring an Accountant in a Tech Company
Whether you’re a blockchain developer or a video game dev, you’ll need an accountant. Here are 10 things to keep in mind before you hire an accountant for your software business.
Are They Qualified and Certified?
Verify that the accountant has a valid and up-to-date professional qualification, such as Certified Public Accountant (CPA). You may need to learn how to obtain a CPA license if you want to help a great employee level up their certification. Also, check if they’ve worked in your industry.
Are Their Services in Your Budget?
Many companies like to hire a freelancer as it can be cheaper than hiring a full-time employee, but they may not be qualified to handle your financial department. For this reason, you should hire an employee or outsource. Be sure to factor in the cost of new software and financial tools.
Are They Compatible With You?
Some accountants may prefer to handle everything themselves, while others are more of a facilitator, actively working with you and your staff in order to ensure the best possible outcome. If you express your needs openly, you’ll ensure they’re compatible with you and your goals.
Are They Able to Communicate?
Another thing to consider is how well the accountant communicates. Your accountant should be able to explain tax and financial laws in a way that makes sense to you. This will help you make more informed decisions. Look for a professional who is prompt in responding to your questions.
Are They Knowledgeable in Tax Planning?
Tax law is ever-changing, and it’s essential to have an accountant who stays up-to-date with the latest changes as well as helps you plan accordingly. Additionally, you’ll want someone who is able to review your tax documents and handle filing with the Internal Revenue Service (IRS).
Are They Knowledgeable in Payroll?
Payroll is the most tedious part of the accounting process, but it needs to be accurate and prompt. Your accountant should understand payroll forms, employee benefits, payroll taxes, and retirement plans and take them into account when calculating employee wages and bonuses.
Can They Make Financial Reports?
Good financial reporting is paramount in the software industry. Your accountant should be able to prepare monthly and yearly financial reports, such as profit and loss statements, balance sheets, and cash flow statements. With this overview, you can recognize areas of improvement.
Also read: 5 Tips For Onboarding Remote Employees
Are They Knowledgeable in Auditing?
An internal audit is essential for any business, and you’ll want to make sure your accountant is familiar with the necessary procedures. Your accountant should be able to provide a thorough analysis of your company’s financial statements in order to detect fraud or negligence.
Can They Track Your Inventory?
Your software business will likely carry a large inventory of items, and an effective inventory management system can help you monitor your current job costs. A good accountant should be able to assist with setting up an inventory control system that tracks and reviews expenditures.
Do They Have Industry Knowledge?
Last but not least, your accountant should have some surface level of understanding regarding your industry. While they don’t need to be interested in your products, they should know common financial issues in your industry. That way, they can warn you of potential pitfalls.
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