Hiring an accountant is just one of several business relationships doctors of chiropractic should develop at the start of their business venture. And your accountant should do more than file your tax returns. The right accountant can help you establish sound policies for money management and offer strategies for growth.
by Jackie Hellrung in Choosing Advisors on Friday, January 15, 2016
The right one will help you plan your practice from the start – help you choose the right business entity, negotiate leases, establish sound money management policies, offer strategies for growth and help you plan for retirement.
Your accountant will advise you on the structure of your practice and tax implications. This person should act as both a sounding board and devil's advocate for any expansion plans you may have.
Finding the Right Accountant
The best way to find an accountant is to ask for recommendations from business colleagues (like your lender and lawyer) and other chiropractors. Check references and retain an accountant that you are comfortable with and whose practice style fits your business needs. You'll also want to look for the following attributes:
- Experience with other healthcare practices.
- Suitability to your business size – The issues are quite different between giant corporations, mid-size businesses, and small businesses. Your accountant should have experience representing practices of your size.
- Trustworthiness – Your financial survival may well depend on your accountant. Consider referrals only from people whom you trust, and pay attention to your own instincts.
- Check the Better Business Bureau for possible complaints and call the local or state licensing board to make sure the accountants whom you're considering meet all the proper requirements.
While the fees your potential accountant charges are a consideration, they aren't the most important concern. Rather, look at the range of services offered and what suits your needs.
Should You Hire a CPA?
As part of this process, you'll want to consider whether you need an accountant who is a CPA.
To receive the CPA designation, an accountant is required to have a certain level of education and experience and take a rigorous test to prove knowledge and competency. A CPA is also held to higher standards than an accountant who is not certified.
For most business situations, a CPA is not necessarily required: a non-CPA can prepare and file taxes, handle books, and help organize your office payable and receivable accounts. But you would need a CPA to assist you in the case of an audit or to represent you directly with the IRS.
The range of services an accountant offers is quite extensive – bookkeeping, setting up accounting systems, advising on computerized accounting, handling payroll, insurance and tax requirements, cash management, helping negotiate with your lender, income tax, tax planning, pension and general business advice. But what services are best for you?
In general you want to make sure you are covered for the following services:
- Annual audit
- Assistance with business planning
- Tax advice
- Preparing management accounts
What an Accountant Should and Should Not Do
All businesses should prepare management accounts at least once a quarter to ensure your business is on track per your projections. This should include a monthly cash flow projection updated against what actually happened the previous month.
Don't expect your accountant to do day-to-day bookkeeping chores. Handing your accountant a shoebox full of receipts would be an expensive mistake. Routine work should be done by a bookkeeper either in-house or outsourced. Your accountant should be working from up-to-date books and focusing on the bigger financial picture, such as taxes and business growth.
You should go in knowing what services you need and what your financial goals are. Ask for suggestions or present hypothetical situations. How the candidate responds will give you a good indication of what to expect in a working relationship.