When you become a landlord, you will need to get an accountant. Remember to consider your choice carefully, though, since the wrong accountant could leave you in a mess. Here are nine mistakes to avoid when choosing an accounting firm.
1. Not Understanding Fees
Some accountants charge one rate for each of the financial tasks they do, like preparing statements, compiling a new worth statement, or filing a tax form. Others charge for each minute, meaning every time you call them, you are going to be paying a higher bill. As a landlord, you want to know exactly what you are being charged.
2. Not Choosing the Right Accountant for You
There are accountants who specialize in several business areas so they can offer their clients a better service. A landlord should choose one that is going to work best with the business of renting property.
3. Not Considering Your Business Accounting Needs
There are a lot of firms that offer tax preparation services and use tax preparers to help people file their income taxes. However, as a landlord, your tax-filing needs are different. When you need more accounting help, you benefit from a firm that employs CPAs rather than general tax preparers.
4. Not Considering Your Financial Advice Needs
How much advice you want or need depends on the amount of financial experience and knowledge you have. If you require extensive help, you want to choose a firm that offers comprehensive financial counseling.
5. Forgetting to Look at Service Levels
If you’re in need of bookkeeping services, search for full-service firms that employ bookkeepers for handling their clients' daily transactions. If the firm doesn't employ bookkeepers, you will be charged more when the routine tasks are handled by a CPA.
6. Not Considering Your Availability Needs
Some people are happy to meet with an accountant annually so that they can file their taxes while others have business questions that require frequent contact. Ask if the accountant you choose can be reached by phone, or if you’ll need to go into the office and meet in person.
7. Sticking With Someone Who Makes You Uncomfortable
You might hire the town’s best accountants, but if you aren't comfortable talking about your finances with them, you aren't getting the necessary service. If an accountant’s not speaking in layman’s terms, or if you’re feeling intimidated, search for someone else.
8. Not Knowing the Accountant's Goal-Setting Policy
Some accountants are willing to help their clients with setting goals and monitoring their financial progress. This can be very helpful to a landlord, especially new landlords. Find out a firm’s policy about setting goals, and if it charges an extra fee for the service.
9. Choosing an Accountant Who Doesn't Offer Audit Support
If the IRS comes knocking, you want to have someone on your side to help you. A lot of small businesses are audited by the IRS, and it can be stressful and scary to face an audit. Some firms offer their offices for audits and supply accountants to represent their clients' interests.
Take your time when looking for your accounting firm to ensure you will be happy with its services. It's better to take your time than to make the wrong choice and have to start the process all over again.
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