5 Big Myths About Small Business Financing

When it comes to the ins and outs of small business financing, many small business owners are in the dark. According to a recent QuickBooks survey,  more than 40 percent of small business owners consider themselves financially illiterate. With so many small business owners not understanding even the fundamentals of business finance, it is little wonder why there are so many myths floating around about the small business lending process.

Below are five of the biggest myths about business financing that small business owners tend to believe and the mistakes these fallacies typically lead to:

Myth #1: Your bank will lend you the money because you’re a longtime customer. If you need a business loan, you can just head to your local bank, right? After all, you’ve been a loyal customer for years. Why not capitalize on the relationship? The reality is that most banks these days are still tight-fisted when it comes to funding the nation’s smallest businesses. Plus, the smaller and more local your bank is, the less likely it is that they’ll offer you funding.

Myth #2: You can’t get a loan if you have bad credit. This myth is based on an element of truth. If you or your business is struggling with bad credit, then you will have a hard time getting a decent loan from from most traditional lenders. There are some ways around this, however. For example, you could take out a series of short-term microloans in order to get the needed financing and help rebuild your credit. You could also tap into an asset-based financing arrangement, such as a merchant cash advance or accounts receivables financing.

Myth #3: You can just get a loan from the SBA. First of all, the SBA is not in the business of extending loans to small businesses. What they do is work with traditional lenders. The SBA offers a guarantee on any qualifying loans their lender partners extend to small businesses. What this does is significantly minimizes the risk associated with extending the loan in the first place. While this setup allows many more smaller businesses to get cheap, long term financing, the bar is still set relatively high when it comes to the requirements for approval, such as sales volume, time in business, and industry.

Myth #4: Alternative lending is for businesses that can’t get financing elsewhere. While this statement may have been true both during and immediately following the recession, today alternative lending is becoming more and more mainstream. Not only are business owners getting more comfortable with accessing financing from online lenders, but the lenders themselves have created feature-rich, sophisticated platforms that efficiently and effectively help them to finance a wide assortment of businesses. Some industry experts are even calling alternative financing the new traditional business lending.

Myth #5: Alternative lenders will try to scam you. While there are certainly some bad apples out there in the realm of alternative financing, the reality is alternative lending has come a long way over the past few years. Today, there are many more legitimate alternative lenders offering quality products and services. You just need to make the effort to educate yourself about your options and do your due diligence before agreeing to work with any particular lender or platform.

In short, business finance is one area you don’t want to be ignorant about. Take the time to educate yourself on the fundamentals of financing and of the current realities in small business lending. Not only will this help you to steer clear of some prevalent myths, but you’ll also be in the best position to find the optimal financing arrangements to suit your business.

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The Pitfalls of Using Personal Asset Loans to Fund Your Business

Even though the worst of the Recession has past us over, and there are signs that at least some parts of the economy have rebounded, the traditional credit markets are still closed to the vast majority of small business borrowers. While many types of alternative lenders have since emerged to help fill in the financing gap, lately the use of personal asset loans has been garnering a lot of attention and popularity. But, do the risks outweigh the benefits of this kind of short-term financing?

What Are Personal Asset Loans?

Should you use personal asset loans to fund your business?While most people have heard about home equity loans or securing a bank loan with a valuable personal asset, the new class of personal asset loans work a bit differently. They are short-term loans that are secured with “luxury assets,” things like boats, classic cars, fine art, antiques, gold, and jewelry. You can think of the lenders that offer these products as a kind of “luxury pawnbroker.”

To get started, borrowers will need to fill out an application in which they describe the asset and the estimated market value. After the item has been appraised, the lender will typically offer borrowers 50-70% of their asset’s resale value. Loans of this type tend to range between $5,000 and $100,000 dollars with a 2-4% monthly interest rate, and the repayment period is generally no more than six to twelve months. If borrowers accept the terms of the contract, then the money is usually wired to them within 24 hours.

Should You Use Personal Asset Loans to Fund Your Business?

The answer to whether or not you should be using this kind of financing for your business really depends on your situation. If you can’t repay your loan, you will lose your valuable assets. So, you would first have to be certain that you can either repay on time or be comfortable with giving up the item(s) used to secure the loan. Plus, since the average interest rate of 2.49 to 3.99 percent is monthly, personal asset loans are more expensive than they seem. A monthly interest of 2.5-4% works out to 30-60% annually. Finally, once your business starts generating income, you will likely have other, less risky financing options to choose from that are based on business assets as opposed to your personal ones. The most prevalent choices include: business cash advances based on future credit card sales or total revenues, invoice factoring, and equipment leasing.

In short, personal asset loans are filling a need in the alternative business financing landscape, but they are definitely not for everyone. Once your business is generating revenues, you may have better options.

Should You Accept Bitcoins at Your Small Business?

It’s getting harder to ignore the rising popularity and ubiquity of Bitcoin, the most widely recognized open source, peer-to-peer payment system and digital currency in the world. As the digital “cryptocurrency” continues to generate serious attention, a lot of major companies and organizations have been taking notice.

WeAcceptBitcoinCurrently, there are thousands of businesses- online and off– around the world that accept Bitcoins as a valid payment for products and services. There are also countless supporting platforms that assist in the purchase and storage of Bitcoins as well as payment processing in the digital currency. Some of the big names in this space include Bitpay, Coinbase, and Bitstamp.

If you are enthusiastic about the Bitcoin movement and you are running a small business, you may have played with the idea of accepting it as a form of payment. But, on the logistical and legal side, such a move brings up a few, big important questions:

  • What is the right way to accept and account for Bitcoin transactions?
  • Is it legal? Will you get in trouble with the government?
  • How should you pay taxes on income received through Bitcoin?
  • How do you account for the currency’s volatility?

If you are going to accept Bitcoin, then you will need to use a third party platform to process the transactions in a safe and convenient way. If you are selling goods and services online, then you’ll want to use an online Bitcoin merchant solution. Some of these services allow you to automatically convert the Bitcoin to USD or any other major foreign currency. If you are running an off-line business, customers can pay using hardware terminals, touch screen apps, or they can use their wallet addresses through QR Codes.

In terms of the legality of Bitcoin and how you record your income for tax purposes, so far there is nothing illegal about processing Bitcoin transactions in your business. Most governments it seems are taking a “wait and see” approach to the digital currency and some of it’s major competitors, such as Litecoin.

For now, Bitcoin could be treated like a cash-based transaction. Consider how you normally record your cash transactions and then this process could be applied to your Bitcoin sales, and in order to decide what a Bitcoin transaction is worth, you could follow the IRS guidelines on how to value transactions made in a foreign currency.

Lastly, regarding Bitcoin’s volatility, the biggest factors to consider is what proportion of your sales you think will be processed in Bitcoins, and if your business can afford to sustain fluctuations in the value of those sales. Supporting the principles and ideals behind Bitcoin is worthy, but you don’t want to sacrifice your business for them.

In short, there are already thousands of businesses processing payments in Bitcoin. If you are considering joining their ranks, then make sure you have all the checks in place to do so responsibly.

7 Common Startup Financing Mistakes to Avoid

In the midst of all the excitement and effort surrounding the start of a new business is one of the most essential building blocks: startup financing. Yet, many aspiring entrepreneurs get this part wrong and in doing so, they cause significant damage to the business and even to their personal assets and credit.

dollarsBelow are 7 of the most common startup financing mistakes that entrepreneurs make as well as some tips on how you can avoid them within your own business:

1. Mixing personal and business accounts. Even if you are your business, and even if you will be relying on personal assets to help fund your business development and operations, keep your business accounts as separate as possible from your personal ones. This means having separate bank accounts, separate credit cards or other lines of credit, and maintaining detailed records of any personal funds invested in your business. If you are running a sole proprietorship or a straight partnership, then even with this separation, they’ll still be some overlap in your personal and business financial profiles, but it will still prevent you from many potential problems down the road.

2. Not putting enough money aside to cover personal expenses. When you start your business, you want to be in a position to make sound, long-term oriented decisions. But, this often means that you won’t see much of an income at the beginning. If you are desperate for money, you’ll be more likely to make decisions that may provide some short-term gain, but may cost your business in the long-run. So, before you quit your job to start your dream venture, make sure you have enough money set aside to cover your living expenses for the first 6 months to a year. If that’s not possible, then it may make sense to keep your job and make the startup process slower.

3. Not being realistic with time needed to become profitable. Right on the heels of the point above is the fact that many first time business owners fail to appreciate the amount of time and effort needed to really get a business up and running and generating some significant revenues. This is a major mistake than can lead to a number of other bad decisions, some of which are mentioned below. You should plan to not be profitable for the first year at least.

4. Not sticking to a budget. As I mentioned above, getting to the point where your business is generating profits may take some time. So, it is vital that you create and stick to a startup budget that covers at least the first year of operation. This will help to ensure that you spend money where it’s needed while avoiding spending more than your means.

5. Not properly estimating the costs of startup. Nothing in life or business always goes according to plan. In fact, most times it doesn’t. Yet, many aspiring entrepreneurs assume that everything will be smooth sailing with their startup process. Make sure you budget in extra funds to cover any “surprises” along the way.

6. Taking on too much debt. Even with the most well thought out business idea and plan of execution, there are no guarantees. Taking on a high level of debt in the hopes that future sales can be used to pay it off, can be very risky. It’s often better to start off small, start generating some revenues, and then slowly finance your future growth.

7. Not paying for professional advice and assistance. If there is one area where you really don’t want to be skimping, it’s in hiring a good account and lawyer. I know these professional services can get pretty costly, but if you’ve made the effort to hire good people, you will get more than your money back from implementing their advice and avoiding costly mistakes.

In short, if you really want your new business to be a success, you should make sure you are making the right moves in the most obvious areas, such as startup financing.

Three Alternatives to Square for Mobile Payments

Square recently announced that it is giving it’s flat fee the ax, making many of its small business customers wonder if there are any cheaper alternatives. The company credited for challenging the mobile payments industry stated that it will be discontinuing a monthly $275 flat fee for businesses processing less than $250,000 in credit-based sales annually. These Square customers will now pay the same 2.75 percent swipe fee per transaction that larger customers pay.

IntuitSo, are there any real options now that Square is not as attractive as it used to be? You bet! Below are three alternatives to Square that small business owners should consider:

PayPal Here. I know that PayPal may not be the most well liked company around-especially among small business owners. But, it’s mobile payments service, PayPal Here, definitely has some great features that make it an option to seriously consider. Like Square, PayPal has a free app and card reader that you can attach to your mobile device, and you can accept a full range of credit cards, such as Visa, MasterCard, American Express, and Discover. But with Paypal, you can also accept checks for electronic deposit as well as create and send electronic invoices. Fees start at 2.7% per transaction, which is actually a little cheaper than Square, while a manually entered transaction will cost you the same as Square, 3.5% plus $0.15 per transaction.

The money is instantly transferred to your Paypal account where you can either transfer it to your bank account (a process that could take a few days) or access it immediately via a PayPal merchant debit card.

Intuit GoPayment. Depending on the amount of transactions you generate per month as well as how often you manually need to key in information, Intuit’s GoPayment service may be a cheaper alternative to Square. There are two payment options. With the first one, there is no up-front fee, and the cost per transaction is 2.75 percent. For manual transactions, the cost is 3.75 percent with no 15 cent charge. So if you process less that $60 in manual transactions a month, then Intuit is the cheapest option. If you process over $1,300 a month, then Intuit’s second option would be the best deal. In this case, you pay $12.95 a month, which gets you a swipe rate of 1.75 percent. The biggest downside to Intuit GoPayment is that the money doesn’t reach your bank account for two to three days.

Spark Pay. Spark Pay is a relative newcomer to the mobile payments scene, but it’s definitely a something to consider since it offers the best deal in terms of pricing for many small merchants. Spark Pay, which is part of Capital One, charges 2.70 percent per swipe or 3.70 percent for keyed-in transactions with no monthly fee. Pay a $9.95 monthly fee and swiped transactions are 1.95 percent, while manual transactions are 2.95 percent. Reviews of the service, however, have been mixed, with many users complaining that their accounts were canceled and that the reader and app didn’t work properly. So, proceed on this one with caution.

In short, before you pick any of these services, make sure you read the fine print, since there are slight differences among each service that can end up costing you a lot of money, such as how the service treats rewards cards. You can also see a side-by-side comparison of each of the major mobile payments platforms would perform for your particular business with this handy tool over at cardfellow.com.

Can You Really Use Crowdfunding to Finance Your Small Business?

Over the past few years, crowdfunding has been steadily climbing the charts of ubiquitous Internet buzzwords. It’s inclusion in last year’s JOBS Act only added fuel to the fire and on the surface seems to give a nod of legitimacy to crowdfunding as a source of business capital.

teamwork-1-1254520-mAt first glance, it’s not hard to see the allure in harnessing the crowd to potentially raise significant amounts of money. But, if you were hoping that crowdfunding would bring the end to your financing woes, make sure you know all the facts. Raising money from this kind of model may actually not be an option for the vast majority of small businesses.

Up until this point, crowdfunding platforms have mostly subsisted on a perks-and-gifts model. This is the version popularized by Indiegogo and Kickstarter in which individuals donate their money in exchange for small gifts, honors, or products, but not stock.

In theory, the crowdfunding provision in the JOBS Act was supposed to allow ordinary investors the opportunity to invest in small or early stage start-ups online in exchange for company equity. The provision provides for entities to connect companies raising money with people who want to invest. These can be existing securities brokers, or they can be so-called “funding portals.”

Currently, only individuals who meet certain wealth or income requirements are allowed to invest in private companies in exchange for ownership. The Securities and Exchange Commission was tasked with creating the rules surrounding the proposed new form of equity-based crowdfunding, but the “final product” as part of the JOBS Act was so watered down and warped that it caused industry experts to proclaim “Investment Crowdfunding in the U.S. is Dead Before Arrival.

In a nutshell, the resulting legislation on a federal level will do little to nothing to create a new capital market of non-Accredited investors nor help “formalize” and grow the friends and family funding market.

The good news, however, is that there has been a growing adoption of state-wide crowdfunding legalization. A handful of U.S. states have recognized the value of forging ahead with their own state-wide crowdfunding legalization, something they are allowed to do as long as the investors and businesses operate within their states. Georgia, Kansas, and Wisconsin have already signed off on crowdfunding legalization, and North Carolina and Washington have followed suit with their own proposals.

So where does that leave your small business? If you happen to live in one of the states mentioned above, and you are operating a small or early stage startup, then crowdfunding may be a viable financing option to look into. If, however, you live outside these states and your business is not related to the arts, your chances of drawing money from the crowd are pretty slim. Crowdfunding may not be your financing silver bullet after all.

How Can You tell If Your Bank Is Small Business Friendly?

I find it funny that some business owners may spend more time shopping for a $300 laser printer than they would shopping for a bank. Choosing a bank for your small business should involve more than just opening a new account at your personal bank or picking the nearest branch. You need to understand what services you require, how much they are going to cost you, and how open the bank is to working with small businesses.

Small Business Friendly Banks Actively Make Small Business Loans

handshakeOne sign that a branch is committed to small businesses is its history of lending money to business owners in the community. If you want to know how your local bank stacks up in the small business lending department, you should definitely check out this handy bank lending grader tool. The tool rates 6,800 banks in the United States based on quarterly FDIC call reports, as well as the total small-business loan balance for each bank divided by its total domestic deposits, and then assigns each bank a grade A through F. To get a good rating (A or B), the bank would need to use at least 10% or more of their deposits to make small business loans. The only thing to keep in mind is that this tool does not offer any insight into how much a bank gives back to a particular local community.

Other Ways to Rate Your Local Bank

What is the bank’s lending authority? What’s the largest loan he or she can approve without checking with higher ups? Relationship managers at community-based banks often have more discretion than those at a unit of a big institution. But, the distinctions between “large” and “small” banks have blurred with the industry’s consolidation. Many community banks have undergone mergers that now allow them to offer a wider range of services.

What is the bank’s underwriting criteria? Smaller, regionally focused banks tend to understand local market conditions more than big national banking institutions. Small, local banks often provide more one-on-one access to a loan officer and put more emphasis on a borrower’s character rather than just applying a credit-score model.

Does the bank make SBA loans or is it a non-SBA lender? Does the bank work with the U.S. Small Business Administration (SBA) loan system? Federally subsidized loans help protect the bank against default, which makes it easier for banks to lend money- that is, once they get through all the paperwork! SBA loans are available to businesses whose credit histories, cash flows or collateral would be inadequate for them to obtain traditional bank loans, and the SBA typically offers more flexible repayment terms. For a list of SBA preferred lenders near you, you can search their online directory.

What business services does the bank offer? Here is where larger banks may have a leg up on smaller institutions. Ideally, you need to think about the long-term relationship. Consider not just what you need today, but services you may require in 18 to 24 months out. See if your local branch offers added benefits such as online services that help save time and money. These may include sending invoices, collecting payments, payroll and loan applications. Some banks may have requirements in place in order to access these services, such as requiring employees to use direct deposit.

In short, the search for the right business banking services should not be approached in the same way you would a typical supply or product purchase. This is all about finding the institution that is willing to build a relationship with you and your business. That’s a real value that can be leveraged in good times and in bad.

How to Use a Business Rewards Card to Save Big Money in Your Business

Business rewards cards are long time tools of the trade for credit card companies. Offering eye-catching rewards and money-saving opportunities is a tactic credit card companies use to lure small business owners into a new account. If you have good credit, you can be disciplined with your spending, and you make the effort to research the best deals, then the truth is that you can really earn a significant amount of money this way. There are plenty of pitfalls to this practice, however. After all, the credit card companies are in the business of making money- not giving it away for nothing. So, before you run to take advantage of the next great offer, make sure you consider the points below:

credit cardGet in touch with your current financial reality. Rewards credit cards are used to encourage business owners to put money on their credit cards in order to earn the rewards. Credit card companies know that when businesses and individuals spend with credit they tend to overspend. If you currently have a large amount of credit card debt, then most business rewards cards are not for you. Even if you are accepted the interest you’ll pay on the outstanding balance will completely eat away any benefits you receive. In this case, you’d be better off with a good balance transfer credit card offering a low introductory APR (annual percentage rate). Bottom line: business rewards cards are the best for businesses with good credit, a relatively steady cash flow, and the ability to pay off the outstanding balance in full each month.

Figure out where you can most use the savings. Different businesses spend money in different areas. Does your business involve a lot of air travel? Does it involve significant gas consumption via long commutes or deliveries? Do you spend a lot of money on office supplies and equipment? Rewards cards tend to target specific purchase categories. If you are not sure where the focus should be then look for cards that offer a versatile rewards point system as well as other, non-points benefits, such as cash-back on purchases.

What are your spending habits? Are there groups of purchases, such as standard overhead expenses, that you can put on the card? In order to get the biggest reward and avoid falling into the trap of over-spending, one tip would be to have two business credit cards, each of which is only used for specific categories of purchases.

Read the fine print! I probably should be putting this tip in bright neon orange. Rules and requirements will definitely vary, and they are often subject to change with little to no warning. Make sure you are clear about the kinds of rewards being offered, any requirements you need to fulfill before receiving them, as well as any limitations on their use. You also need to be in touch with the realities of keeping the account after a trial period has ended. What is the APR? Is there an annual fee?

Keep your eyes open for new deals and promotions. Many credit card offers are given during a trial period, as mentioned above, and once the trial ends, higher expenses may kick in. Many savvy cardholders cancel their accounts just before the trial period ends and simultaneously open another account with a different credit card company to take advantage of a new rewards program. If you plan on doing this, then make sure you send yourself some kind of alert or reminder to cancel the original account.

For more information on business rewards credit card offers, see our top picks for small business owners.

Why Has Bank Lending To Small Businesses Been Declining For The Past 15 Years?

Forget about what the media has been saying. If it feels like bank lending to small businesses has been on a decline over the last few years, it’s because it is really happening. Surprisingly though, this decline extends way beyond the past few years. According to data collected by the FDIC, small loans (those under $1 million) made to small companies have been a decreasing fraction of all bank loans for the past 15 years.

It’s an interesting find considering that the media has been quick to point fingers at the recent recession as the cause behind the sluggish small business lending rates. But if the recession isn’t to blame, then what is?

The answer is probably a few things. Scott Shane, over at Small Business Trends offers three possible reasons:

  1. Many big banks have gotten into the nasty habit of “securitizing” their loans, which basically means they’ve been making gobs of money by bundling loan products into bonds that can then be sold to third parties. Since small business loans tend to be unattractive as securitized products go, the banks have opted to reduce the number of these loans in favor or more securitizing-friendly loans. 
  1. A lot of small business lending happens at smaller, community focused banks. The problem is that over the past several years there’s been an overall consolidation of the banking industry and a lot of smaller banks have either closed down or were merged into bigger banks. With fewer small banks available to lend to small companies, the lending rate naturally went down.
  1. Lastly, the banking industry has become more openly interested in bragging rights and a bloated bottom line then in the customers their supposedly serving. Part of the shift in lending may be due to the fact that banks are simply focusing on their most profitable loans- you’ve got it, those over $1 million. These loans loans tend to be more profitable because they can rake in the revenues faster. 

These reasons definitely seem plausible, but there may be a few more as well:

  • It could be that for a variety of reasons small businesses are just seeking fewer bank loans. There has been a burgeoning of sorts of outsourcing and strategic partnerships over the past few years- both of which can effectively reduce operating costs. Smaller businesses have also been having a harder time trying to make a profit- especially over the last few years as costs in employment and healthcare have skyrocketed. Thus, they may be wary about taking on additional debt.


  • Over the past decade, alternative, non-bank financing companies, such as cash advance companies and accounts receivables factors, have stepped into the small business loan space. A fair about of small business lending is now being done by these alternative private lenders as well as credit unions, private banks, leasing companies, and private investors doing debt financing. Typically, these financing options are more flexible and easier to attain than your run of the mill small business bank loan so small businesses may simply be bringing their business elsewhere.
  • Finally, many more businesses may just be unable to meet the banks’ lending requirements and are thus not being accepted for financing. This lack of attractiveness may not just be a result of lower sales or poor credit (though they are probably playing a part). It could also be due in part to a broader shift towards intangible assets rather then tangible ones, as well as businesses sporting more flexible (i.e. less stable and known) setups- a situation that makes it harder to assess the risk of extending financing.

Whatever the case, the trend towards fewer bank loans for small businesses is an undeniable reality, and it’s something to consider if you plan on heading to the bank in search of financing for your small company.

10 Questions to Ask Before Hiring an Accountant for Your Small Business

Now that the 2013 tax season has gotten into high gear, you may be considering using the services of an accountant- whether to help you with your tax preparation or to get your financial reporting in order.

But where and how should you start looking for the right candidate? Making a poor choice with a hired accountant can cause more headache and end up costing you more money than many of your other employees can because this person will have the ability to access and manipulate any sensitive financial data. So how do you find the right accountant for the job, especially if your knowledge of finance and accounting is limited?

Here are ten questions every small business owner should ask a prospective accountant before bringing this person on board:

1. Who are your clients and what industries are you familiar with? You want to be certain that your accountant understands your type of business and has experience working with clients within your industry. Companies in the construction industry, for example, will have a different setup and methods of operation that includes dealing with contractors and buying heavy machinery, than a restaurant or a store that may be dealing with tips and perishable inventory.

2. What is your availability? Are you looking for an accountant or an accounting firm to only help come tax time or are you looking for year-round help? Make sure that your accountant of choice follows the same schedule that you are looking for.

3. What are your qualifications? One of the things that you will need to determine before you go about hiring an accountant is what you expect to get out of the arrangement. Many financial experts suggest that small businesses hire a certified public accountant (CPA), because CPAs must go through rigorous certification requirements and will likely have more experience with broader financial planning issues. But, you have other options, such as an Enrolled Agent (EA). EAs are certified by the federal government specifically to handle taxes and are often former IRS agents with extensive experience dealing with audits. In some cases, a bookkeeper or professional tax preparer will be more than adequate.

4. Who will be doing the work? Be aware that many accountants outsource work to third parties. This can become an issue if you want to speak to someone who is familiar with your accounts. If you are working with an accounting firm, you should also find out who exactly will be processing your financial data.

5. What is your approach to accounting? 
You want to find out how aggressive your prospective accountant is. Some accountants want to write off everything they possibly can, while others are more focused on avoiding the red flags that can lead to an IRS audit. Decide which approach appeals to you and your business and then make sure your hired account abides by the same philosophy.

6. How much do you charge? Some accountants have an hourly rate while others have a set fee for certain tasks. Make sure you are clear about their billing preferences and any other expenses before deciding to take someone on.

7. Can you give me advice about my accounting system? If your accountant has been working with businesses in your industry then he or she should have a working knowledge of what works and what doesn’t in terms of financial recording and reporting systems. This person should also be able to advise you on what accounting software programs to buy for business use.

8. How will we communicate and exchange information? Make sure you are clear about how you will send financial information and documentation to your accountant. Will you be physically meeting with this person or will the exchange of information and meetings be electronically?

9. How often will we communicate? Every accountant will be different when it comes to the frequency of communication as well. So make sure that you are clear about this from the beginning and that you can feel comfortable asking questions when you need to.

10. Can you tell me about such and such tax deduction? If the accountant you’re speaking with is unfamiliar with typical deductions or financial reporting terms, you should be wary because that might be a red flag that he or she isn’t knowledgeable enough to handle your business’ financial accounts and information.