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E-Myth – “Why most small businesses don’t work & what to do about it”

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Edmonton Accountant | Can Small Accounting Firms Offer A Wide Variety Of Services

Entrepreneurs who choose a single person Edmonton accountant firm because they assume that it is going to give them better service often make the wrong choice when hiring which accountant to work in their business. Entrepreneurs should base the decision on who to hire to work with based on the amount of services and the level of service that they want to get. By making the assumption that a single person accounting firm is going to be able to give them better service, business owners may end up disappointed, as well as at a disadvantage. Industry Canada says that the failure rate for entrepreneurs in Canada is very high. 15% of all entrepreneurs fail within the first year of business, 30% fail by this second year, and by the fifth year in business, 50% of all entrepreneurs have close the doors to their business. By making the wrong decision on which accountant to work with early on in their business, entrepreneurs are making themselves more susceptible to this problem.

One of the reasons why small person Edmonton Accountant firms are not able to give a higher level of service to their clients, is because they often get extremely busy doing all of the very necessary administrative work that needs to happen in an accounting firm. This admin work like filing tax returns, doing the bookkeeping, filing invoices and receipts, and catching up on correspondence are all extremely necessary in an accounting firm, and when the firm is only a single person, there is no one to help out with those admin tasks, and it can become very easy for a single person accountant to get busy doing all of those necessary but time-consuming admin tasks, while the higher level functions that are going to help entrepreneurs succeed in business are left undone.

By choosing to work with an Edmonton Accountant firm that has multiple accountants at it, entrepreneurs are increasing the chances that they will be able to have someone at that firm who takes care of all of the admin tasks, so that the more experienced chartered professional accountants can work on the higher level tasks that are going to help entrepreneurs minimize the taxes that they pay and grow their business. For example, larger accounting firms typically hire accounting students to article in their firm, these students need to complete three years of apprenticing under accountant, so it is extremely important that accounting firms hire students. They have already completed a four-year accounting degree, so they are extremely capable of taking on a variety of accounting duties, but because they can take on all of the admin work, they free up the tenured accountants time.

By looking for the right accounting firm, not just the smallest one because they think it will give them good service, entrepreneurs will be more likely to find the right accounting firm it is going to help them not only get their year end filing done, but grow their business through great business and tax planning.

Edmonton Accountant | Can Small Accounting Firms Offer A Wide Variety Of Services

Cost minimization is extremely important for most small business owners, especially when they start their business, however looking for the cheapest Edmonton accountant is not a good way to minimize their costs. A good accountant can help entrepreneurs grow their business and save money, so they should be looking for the best one that they can hire, not the cheapest one. Great accountants will be able to help entrepreneurs make more money and save more money than their accounting fee, so this is not the area where entrepreneurs should try to save costs.

Some entrepreneurs also believe that hiring a single person accounting firm will mean that is entrepreneurs will be able to save a significant amount of money they assume that larger firms have much higher overhead, which actually drives up the cost of their bills. However, and actually does not work that way. Smaller Edmonton accountant firms usually charge the same rate, no matter if they are working on high-level accounting functions, or are doing filing or answering emails. Therefore, even if they have at smaller hourly rate, the fact that they are charging that same hourly rate for everything that they do in their business, can mean that they end up charging out more for their services then a larger Edmonton accountant firm. Also, because they are a single person firm, it may take them longer to accomplish tasks, so they are literally charging out more hours than an accounting firm that is more efficient.

Larger Edmonton accountant firms are able to hire students to help with a lot of the administrative tasks, and the reason why this is important, is because the students need to work in an accounting firm as a way to get their accounting designation, therefore there three years of apprenticing is considered part of their schooling. That means their charge out rate is much smaller per hour than the tenured accountants. When they hire students to work on the administrative work of the firm, they can save a significant amount of money for their client, while freeing up their own time to work on the higher level accounting duties.

Entrepreneurs should consider all of these when making the decision of what Edmonton accountant to hire in their business. Not only are single accounting firms not able to cut their charge out rate when they are doing the administrative duties of the job, because they still need to get paid, their accounting bill can end up being much higher. However, if an entrepreneur is able to hire a larger multi person accounting firm, the be able to use students to help keep costs down for entrepreneurs, so that they can ensure that they are paying a reasonable rates for their accounting services. This way, entrepreneurs can ensure that the larger accounting firm that they choose to work with will be better able to get to the business and tax planning that they need in their business to become successful.