Graphic designers, web designers, and other creative individuals face unique challenges when it comes to filing their taxes. While many people only enlist the help of a professional accountant at the end of the year when taxes are due, you might be able to benefit from receiving the advice of an expert all year round. They can help you analyze your current financial data and advise on where to invest your dollars.
If you’re ready to hire an accountant for your freelance business, here is everything you need to know about the process:
Why Hire an Accountant for Freelancers?
The truth is that many small businesses struggle to justify the expense of hiring an accountant who will work for them full-time; there simply isn’t that much work to be done regularly. But, this might not be the right mindset to have.
An accountant plays a vital role in growing your business and making smart financial moves to propel you into the future. They can help you analyze your current finances, figure out how to more effectively reinvest money back into your business, and keep track of your payroll.
If you’re just starting a business, then an accountant should be one of the first professionals to consult. They can offer advice on what type of business structure is right for you, whether that means a sole proprietorship, partnership, or corporation. The business structure you select will play a huge role in your tax liability at the end of the year.
Freelancers can also benefit from having an accountant at tax time. Accountants are well-versed in the deductions and expenses that might help you out on what you owe the federal and provincial governments at the end of the year. This is essential to keep more of your income in your business bank account.
Keep in mind that there’s a difference between a bookkeeper and an accountant. Bookkeepers are there to record the transactions that occur in your business, but an accountant manages all aspects of your company’s financial well-being. While there is a time and place for both, hiring an accountant would be a smart first move.
How To Hire an Accountant for Your Freelancing Business
Now that you know why hiring an accountant is a savvy business move, it’s time to move on to the details of how to actually hire an accountant to help out. Here are a few of the top tips for those who are looking for accountants for creatives:
Be Specific About Your Needs
Accountants can do a variety of tasks, so you’ll need to figure out what your business needs the most before starting the hiring process. Much like training a new employee, you need to be clear on what tasks and responsibilities you feel they should accomplish if they will be on your payroll. Make sure that you list out all of the tasks you need them to complete, including:
- Year-end taxes and/or quarterly taxes
- Overview of the business’s finances conducted at regular intervals
- When you’ll be communicating (weekly, monthly, etc.)
- How you prefer to communicate
- Length of time you will need their assistance
- Any upcoming deadlines
Writing up this brief synopsis of what services your business truly needs will give you clarity on who to hire. You’ll know right away if an accountant can’t deliver on one of the key areas that matter to you and your business because you were clear on what you wanted.
While this may feel a bit like writing up a job posting, it is well worth the time spent.
Qualify Your Accountant
Once you know which accountants can provide the services you need as a freelancer, it’s time to do a bit of background research on the few you have selected. First and foremost, you should rate them on their professionalism. Ask yourself some of these questions:
- Did they respond to your inquiry in a timely manner?
- Were they friendly and easy to talk to?
- Did they take the time necessary to explain what they could offer your business?
- Was their staff helpful?
If you know that you felt comfortable working with them in the office, it is time to do a bit more digging. Look into their experience, where they got their degree from, and the number of years that they’ve been practicing.
While they may not have experience with graphic designers or web designers specifically, make sure to inquire what their experience is with freelancers as a whole.
Last but not least, check out their reviews online. Are there any red flags that you notice coming up again and again in their reviews, or is the consensus mostly positive? Keep in mind that you may encounter a disgruntled customer for any type of business. However, if you start to notice a pattern of bad experiences and reviews, it might be time to steer clear of this accountant.
Inquire About Rates
Once you have narrowed down your list of potential candidates, it’s important to know whether you can afford their services. In your interview process, you should always make sure that their rates are going to be affordable for your business. This doesn’t necessarily mean that you should choose the least expensive accountant you can find, though. Instead, you should be looking for value.
It’s common for accountants to charge a flat-rate fee for filing your taxes at the end of the year. For other work, they might charge hourly. The hourly fee often depends on their level of experience and the specific firm you work with. Accountants can charge anywhere from $40 to $150 per hour.
This is still often less expensive than bringing on a full-time accountant to your staff. Ask them how many hours they believe your list of requirements will take on a weekly or monthly basis. This will give you a better idea of how much you can expect to pay when the job is done.
Hiring an Accountant for Freelancers
There are several things you must consider if you want to hire an accountant for your freelance graphic design or web design business. Freelancers of all types can benefit from following some of the above tips, though. Compass Accounting’s services are perfect for small business owners and freelancers. Give us a call today to see how we can help you manage your company finances the smart way!