They may seem supplemental to your small business operations, but tax services are very important to your success. Many small business owners only think about taxes when deadlines are near, they’re expecting a refund, or their bookkeeping/tax advisor calls (if they have one). The drawback with this mindset is that it is a reactionary approach towards tax compliance. It doesn’t afford you the best opportunity to manage those tax liabilities.
If you’re looking for a better solution—whether it’s the first time evaluating small business tax services or considering making a change—there are four key factors that will help you determine the right tax consultant for your business.
Whether you’re currently working with an accountant/bookkeeper, tax preparation service, or small business consultant – are you totally confident you’re being supported as a small business owner in the best way possible? How do you know you’re being provided with the kind of value that you should be receiving?
The answer to that question is largely driven by the depth of knowledge your tax advisor has about you and your business. You don’t want someone who simply gathers receipts and fills out your small business tax forms come tax time. You want a strategic tax partner who understands your particular situation, can find potential savings via tax deductions, will optimize your business expenses, and help you achieve your financial goals.
The small business accounting, bookkeeping or tax service you work with should possess the appropriate type of experience and qualifications appropriate for your operation. As a small business owner, here are a few things to consider:
If you work with someone who has far more experience with big business, you’re bound to become frustrated. You never want to be the smallest (or least important) client. You need someone to truly get to know your business. Work with a tax preparer who appreciates your business and can offer the attention you deserve.
Finding a tax consultant with experience in your specific field is much less important than finding someone who understands small businesses and their tax concerns. Tax codes are similar regardless of the kind of business you’re in; it’s how they are applied that varies.
You need a tax partner who can help you best apply these codes to your small business. It’s also very helpful if your advisor is familiar with your business expenses and other operational aspects of your business. For instance, if your employees make tips or your business involves inventory, you need someone who understands the related tax implications, like payroll taxes.
Your tax consultant should be capable of addressing all your tax needs—federal, provincial, payroll, income, sales, and beyond. Many tax concerns are interrelated.
Certifications may look impressive, but without the appropriate supporting resources, how much value will you receive? Look for credentials as a starting point, but don’t let them be the determining factor. A certification alone doesn’t make a tax advisor qualified to best help you.
Consider your specific needs and focus on finding someone who has the resources and knowledge necessary to support your small business. Comprehensive tax software is a valuable tool, but it doesn’t replace informed advice from a trusted advisor.
Most tax services will focus on a small business’s previous reporting period—the taxes to be paid on last month’s or year’s revenue. While it is always helpful to understand where your business has been, it is strategically more important to project where your business is headed.
Looking ahead provides you with the ability to proactively address impending tax liabilities. Informed decision making and proper planning can then help minimize those tax obligations. Search for a tax advisor who is looking ahead and strategizing for your best outcomes.
Offering tax services and tax planning is one thing; developing a strategic partnership is something more. The right tax partner works with you on a regular basis. They should be someone you can feel comfortable calling on to ask questions throughout the year.
How well do you connect with your tax advisor? Developing a strong relationship is important—one in which your advisor understands you on both a business and personal level.
Much of a strong relationship is dependent on communication. Your consultant needs to understand your business in the way you feel most comfortable talking about it. They should explain small business taxes, reporting, and compliance at a level you can easily comprehend.
Furthermore, are you confident that your consultant will promptly return calls? If you prefer face-to-face meetings to phone calls or emails, is he or she able to accommodate you? Ultimately, ensure that your advisor can deliver information in a way that you’re comfortable with.
Longevity isn’t always an indicator of credibility, but it’s helpful since it usually provides an opportunity to do more in-depth research on a particular small business tax service. What sort of reputation do they have? Are they recognized by their peers/industry in any way? Are they a supportive member of the local business community? What other local businesses are using their services?
What good is a tax advisor who isn’t around to provide you with advice when you need it? You should feel confident that any tax consultant you engage has the appropriate time available to address your concerns and answer your questions. As a rule of thumb, look for a 24-hour response time to your initial inquiry.
Tax issues don’t only arise between January and April. When you run into a concern, you should be confident that a tax professional is available to help you in a timely manner, any time of year.
Given the importance of communication, having a main point of contact who understands your business is essential. You want someone that you connect with as your contact.
Of course, having access to a knowledgeable support team is helpful when that tax advisor needs to address unique or complicated issues. A support team, or access to a resource network, may deliver alternate solutions to a tax problem. Consider the resources your consultant has available to maximize their efforts to support you.
The tax service that’s right for you and your small business might not be the one you talk to first. It’s worthwhile to shop around, but it can be difficult to find advisors worth speaking with in the first place. It helps to speak with other small business owners. These people have working relationships with tax professionals and have insight into those experiences. While you still need to do your own due diligence (as people tend to believe that their tax advisor is the best), collect some names of tax service providers your peers trust.
When you have several recommendations, narrow your search down to a handful of qualified candidates and set up interviews with them to get a feel for how well you connect. Some questions worth asking include:
You also want to understand any provider’s policy for charging clients, as you’ll need to estimate your costs to some extent. In general, flat-fee arrangements are far more advantageous than hourly rates.
A tax partner is just that—a partner. Anything less is an engagement that leaves you and your small business with unmet needs. In any partnership, you need great communication and a solid relationship. Assess your current support system and ensure that you have a partner who helps you achieve your long-term goals.
Need assistance finding the right tax advisor and services for your small business?
Padgett can help. We have extensive experience assisting small business owners navigate the challenges they face with small business taxes in Canada. Find a Padgett office near you to get the professional advice you need to help your company succeed.
