Add an Accountant to Your Business Team Let an accountant handle your complex finances so you can concentrate on building your business.

Introduction
If you think you only need an accountant during tax time, you maywant to think again. Good business accounting is not just aboutbalance sheets and tax returns. With the help of a competentaccountant, you can track your business's finances and makesure it's running at the optimum level.

And to take it even one step further, your accountant is a greatresource to tap into for business valuation and business consultingpurposes. Whether you need to get your financial statements inorder or an audit to present to potential investors, exploring thespectrum of services your accountant offers could help you turnthat once-a-year, tax-time meeting into an invaluable year-roundresource.

Luckily, there are quite a few effective options available thatwon't take a nasty toll on your budget.

What isaccounting?
Accounting refers to the practice of tracking a business'sincome and expenses and using those figures to evaluate itsfinancial status.

One of the most basic accounting services is bookkeeping, whichinvolves keeping a record of all financial transactions and thenpreparing financial statements such as balance sheets and incomestatements. Accountants can then take this information and roll itinto tax services, another basic accounting service.

But the business of accountants goes beyond just basicnumber-crunching. Accountants include a number of other services intheir repertoire: auditing services, tax planning, businessconsulting, business valuation, and financial planning, just toname a few.

Bookkeeping
In bookkeeping, an accountant keeps a comprehensive record of howmuch your business owes creditors and how much is owed to you. Therecords of these transactions also indicate how much you haveinvested in equipment and inventory.

Typically, accountants handling the books take care of accountsreceivable and accounts payable, put together financial statements(such as balance sheets, income statements, and cash flowstatements) and take care of bank reconciliation.

The cost climbs as the volume of work expands. The moretransactions and the more statements you expect your accountant toprepare, not to mention how often you want these financialstatements whether they be monthly or yearly, the more you'llpay.

Tax services
Taxes are one of those areas that can easily be underestimated.When tax time rolls around, a good accountant, in preparing yourreturn, can help ensure that the necessary steps have been taken tominimize filing errors that can trigger an audit.

But if you're just in and out of your accountant'soffice when it comes time to do your taxes, you could be missingout on a major money-saver.

A knowledgeable tax accountant can suggest ways your businesscan save thousands of dollars through tax planning and tax-savingstrategies. In tackling these issues, you and your accountant canalso look for ways to add value to your business.

Of course, the more complex the tax planning and the moreongoing the tax services are, the higher your bill. But in the longterm, the tax dollars saved makes this extra expense worth everypenny.

Audits
Audits are mandatory for public companies; private companiesdon't have to conduct audits unless a bank or an outsideinvestor requests one.

Accountants might handle an audit for a private company, forexample, that is looking for funding from investors who want tohave an independent opinion on the fairness of the company'sbooks, financial statements, and financial position.

Most audits can be divided into two phases: the accounting workdone to prepare for the audit, and the audit itself.

Make sure it's clear in the beginning what you're payingfor. While some accountants will give you cost estimates for thesetwo aspects of the audit, others will simply give you one estimatefor the audit and add-on costs at the end for the preparation.

Here are a few things to consider when trying to hold down thecost of an audit, one of accountants' more expensive servicesbecause of the detail and time that is usually involved:

• Do some of it yourself. Have your in-house staffprepare the necessary documents for the audit. This cuts down thepreparation time that your accountant would have otherwise spentjust getting things in order for the audit - time that you wouldhave been billed for.
• Hand over clean books. The cleaner and clearer thebooks, the less time it takes for your accountant to get throughall the paperwork.

Otherservices
There are also a few other more specialized services accountantscan provide.

Reviews
Reviews are less detailed than audits. For a review, youraccountant will determine whether the financial statements fairlyrepresent the company's financial status.

Reviews, which are smaller in scope than an audit and thereforeless expensive, are usually done on a quarterly basis for publiccompanies since it is not required that public companies havequarterly figures audited.

Unlike the more critical evaluation of an audit, however, thatactually tests the details documented, reviews simply touch uponthe reasonability of the statements and offer a limitedopinion.

Compilations
Compilations are even less detailed than reviews, and theydon't involve any opinion on the part of the accountant. For acompilation, your accountant will simply take the financial generalledger and create financial statements from it.

Businessconsulting
Business consulting is one of the more specialized services, so therate or fee may reflect that.

If you're exploring a specific aspect of your business, forexample looking to cut costs and improve your profit and lossstatement, it's a good idea to look for an accountant who notonly has experience in business consulting but one who is alsofamiliar with your industry and market.

Businessvaluation
Business valuation is also a specialized kind of service, so aswith consulting, you can expect the costs to go up.

Business owners might want a business valuation if they arelooking to sell the company or if they want to do some estateplanning. Business valuations are also useful when applying for aloan.

In any case, you'll want to find an accountant who hasexperience dealing with companies in your industry and market. Anaccountant with this kind of background will have more insight intoyour particular situation than one who is just stepping in with noframe of reference to draw from.

Financialplanning
Financial planning has really taken off in the past five to 10years for accountants. This service turns the focus from thebusiness to the business owner. The need for financial planningbecomes more pressing when a business owner starts to look atlong-term care insurance, wills and trusts, and estateplanning.

For instance, if one wants to pass the business on to his or herfamily, an accountant could suggest ways of doing so without havingthe family hit by a huge tax burden.

Pricing
While the costs can run the gamut depending on your company'sspecific needs, accountants usually charge a flat rate per monthfor basic bookkeeping services.

Rates can vary depending on your geographic area, the size ofthe firm, and the experience and seniority of your accountant. Buteven for the most basic of bookkeeping services, you can expect topay $1,400 to $1,500 per month.

Sometimes in the beginning, accountants will charge an hourlyrate until they get a feel for your business and how much time isinvolved in the work you want done. A few months into it, you canusually negotiate a flat fee for your long-term needs.

For more in-depth and complex services, such as financialplanning, accountants typically charge an hourly rate.

Focus groups are helpful because the participants can be probedfor the reasoning behind their opinions, and conversations can begenerated around a particular topic - giving you what's knownas "rich data" as opposed to, for example, the finiteanswers you get from survey questions.

Cutting costs
While costs will vary depending on your individual business and theaccountant you've hired, here are a few tips that can help youkeep your costs down.

• Keep records as automated as possible. This makesit easier for the accountant to access the information.
• Keep records as clean and clear as possible. If itis difficult for the accountant to decipher ledgers, it just meansmore time for them and more money out of your pocket.
• Do your homework. Do what you can as you can to getall of the simple paperwork out of the way on your own, especiallyin the case of an audit, which can be costly.
• Hire temps. If you need someone to only take careof running the books, you may want to consider hiring temporaryhelp. This is cheaper than going to a CPA for basicbookkeeping.