As a realtor in Calgary, your financial needs can be complex, from managing fluctuating income to maximizing tax deductions and ensuring long-term financial stability. Hiring a qualified accountant can significantly ease these burdens, but choosing the right professional is key. The right accountant will not only help you with tax compliance but also provide valuable insights to help your real estate business grow.
Here are the top questions you should ask when hiring an accountant for your Calgary-based real estate business.
1. What Experience Do You Have with Real Estate Businesses?
When hiring an accountant, it’s important to find someone who understands the unique financial needs of realtors. Real estate businesses have different tax structures, income sources, and deduction opportunities compared to other industries.
Why It Matters:
- Industry-Specific Knowledge: An accountant with real estate experience will be familiar with commission-based income, fluctuating cash flows, and the tax strategies specific to your business.
- Specialized Deductions: Real estate agents can claim several industry-specific deductions, such as marketing expenses, travel costs, and office expenses, which general accountants might overlook.
Follow-Up Question:
“Can you provide examples of real estate clients you’ve worked with and how you’ve helped them optimize their finances?”
2. How Will You Help Me Maximize My Tax Deductions?
Tax savings are crucial for realtors, especially when it comes to managing expenses like vehicle costs, office expenses, and marketing. A great accountant will be proactive in finding ways to minimize your tax liability while staying compliant with CRA regulations.
Key Tax-Related Services to Look For:
- Maximizing Deductions: Can they identify all the potential deductions specific to your real estate business?
- Incorporation Benefits: Do they understand how incorporation might impact your taxes, and can they help you decide if it’s a good option for your business?
- Year-Round Tax Planning: Will they offer guidance on tax strategies throughout the year, rather than just during tax season?
Follow-Up Question:
“What tax-saving strategies do you recommend for realtors, and how can I start preparing now for the next tax season?”
3. Can You Help Me with Cash Flow Management?
Realtors often experience fluctuating income due to the commission-based nature of the business. Managing this variability is critical to ensuring your financial health, especially during slower months.
Why It’s Important:
- Cash Flow Forecasting: An accountant can help you create cash flow forecasts, enabling you to plan for both high-earning and low-earning periods.
- Expense Management: They can also identify areas where you can reduce expenses or save money during lean months.
- Budgeting Assistance: An experienced accountant will guide you in setting up budgets for both your personal and business expenses, so you have a clear roadmap for financial success.
Follow-Up Question:
“How will you help me plan for months when my income fluctuates, and how can I improve my overall cash flow?”
4. How Will You Keep My Business Compliant with CRA?
Staying compliant with the Canada Revenue Agency (CRA) is a top priority for any business, but the rules can be complex—especially for self-employed professionals like realtors. Missing deadlines or misreporting income can lead to penalties or audits.
What to Expect from a Good Accountant:
- Timely Filing: Will they ensure your taxes are filed on time and all relevant deadlines are met?
- Audit Support: In case of an audit, can they represent you or provide the necessary documentation to support your claims?
- Compliance with Regulations: How will they keep your business up-to-date with changes in tax laws and regulations?
Follow-Up Question:
“What steps do you take to ensure tax compliance, and how will you handle an audit if it occurs?”
5. How Can You Help Me with Incorporation?
Incorporation offers potential tax benefits and liability protection for realtors, but it’s not a one-size-fits-all solution. It’s important to ask your accountant if they believe incorporation is right for your business.
Why Ask This Question:
- Tax Advantages: Incorporation can allow for tax deferral, income splitting, and access to lower corporate tax rates, but it comes with added responsibilities and costs.
- Liability Protection: Incorporating can also provide personal liability protection, separating your personal assets from your business risks.
- Professional Guidance: An experienced accountant can assess your current business and financial situation to help you decide whether incorporating makes financial sense.
Follow-Up Question:
“What are the pros and cons of incorporating my real estate business, and when is the right time to make that decision?”
6. What Technology Do You Use to Manage Finances?
Modern accountants use software and technology to streamline bookkeeping, tax filings, and financial reporting. Choosing an accountant who utilizes up-to-date tools can make your financial management more efficient and accessible.
What to Look For:
- Cloud Accounting: Are they using cloud-based accounting software like QuickBooks or Xero to give you real-time access to your financial data?
- Digital Communication: Can you easily collaborate with them online, access reports, and track financial progress digitally?
- Automation: Do they offer automation tools for invoicing, expense tracking, and tax filing to save time and reduce errors?
Follow-Up Question:
“What accounting software do you recommend for my real estate business, and how will it make financial management easier for me?”
7. How Will We Communicate and How Often?
Communication is key when working with an accountant. You’ll want to ensure that your accountant is available when you need them and that they’re proactive in keeping you updated on your finances.
Ask About:
- Frequency of Updates: How often will they provide financial reports, and will they schedule regular check-ins to discuss your business’s financial performance?
- Accessibility: Can they be easily reached by phone or email if you have questions, or do they only operate during tax season?
Follow-Up Question:
“How will we communicate throughout the year, and what level of support can I expect during busy periods?”
8. What Are Your Fees and What’s Included?
Lastly, it’s essential to understand the accountant’s fee structure. Will they charge by the hour, on a monthly retainer, or per service? Make sure you know exactly what services are included in their fee and whether there are any additional costs for specific tasks.
Be Sure to Clarify:
- Flat Fees or Hourly Rates: Do they offer a flat fee for certain services, or is it based on hourly work?
- Additional Costs: Are there extra fees for tasks like filing corporate taxes, providing audit support, or handling complex financial planning?
Follow-Up Question:
“What is your pricing structure, and can you provide a breakdown of what services are included?”
Key Takeaways
Hiring the right accountant for your real estate business in Calgary can make a huge difference in how you manage your finances, prepare for taxes, and plan for the future. By asking the right questions—focused on their experience, tax strategies, cash flow management, and use of technology—you can find an accountant who will help you optimize your business and ensure long-term financial success. If you’re looking for advice or guidance with your financial situation contact us for a free no obligation consultation.
