How To Find The Perfect Accountant For Your Small Business
Everyone wants their small business to succeed, which means everyone needs a small business accountant. Yes, even if you use accounting software and do your own bookkeeping, a professional accountant is indispensable.
But how do you even find an accountant? And once you do, how do you know if they’re any good?
In this post, we’ll provide five easy steps for finding an accountant for your business. We’ll teach you where to look and how to tell a good accountant from a bad accountant. We’ll also give you the top tips and tricks for choosing the perfect accountant.
|How To Find An Accountant For Your Business|
|Step #1: Pinpoint Why You Need An Accountant|
|Step #2: Choose the Right Type of Accountant For Your Business|
|Step #3: Know Where To Look|
|Step #4: Learn What To Look For|
|Step #5: Ask The Right Questions|
Table of Contents
- Know When & Why You Need An Accountant
- Why Picking The Right Accountant For Your Business Matters
- Where To Find An Accountant
- Factors To Consider When Choosing An Accountant
- Characteristics Of A Good Accountant
- Key Questions To Ask Before Hiring An Accountant
- Tips For Finding The Perfect Accountant
- The Hunt Is On
Know When & Why You Need An Accountant
The first step is knowing when to hire an accountant. Spoiler alert: the answer is now.
Sure tech-savvy business owners can use accounting software to manage their own bookkeeping, but when it comes to actual accounting, you’ll want the many advantages of having an expert onboard. As a small business owner, you should do everything you can to set yourself up for financial success; the best way to do that is to hire an accountant.
Accountants do so much more than just help you file your taxes. An accountant can give sound business advice when you’re setting up your business, analyzing your cash flow, trying to improve efficiency, facing an audit, and much more. Read our full post When Should You Hire An Accountant For Your Business to learn every instance when an accountant can help.
When beginning the process of hiring an accountant, it’s important to pinpoint why you want help and exactly what you want your accountant to do for you. Common tasks accountants can perform include:
- Basic bookkeeping tasks
- Verifying your bookkeeper’s work
- Setting up your business
- Offering business advice
- Creating reports
- Analyzing your business’s finances and assets
- Cash flow management and projections
- Providing tax advice
- Filing tax returns
- Maximizing your tax deductions
It’s important to know which tasks you want your accountant to perform before starting your search as services vary from accountant to accountant.
For example, if you just want tax advice and help filing your tax returns, you may want an enrolled agent (EA) instead of a full-on accountant. If you want business advice and tax advice, a certified public accountant (CPA) with expertise in your business industry may be a better way to go.
Take a careful look at your finances and your business’s current situation and create a list of problem areas where you would like help from a professional. Do you need help managing your cash flow? Are you worried you aren’t taking all of the deductions you’re eligible for? Are you simply overwhelmed by finances and need a helping hand with the day to day work? Pinpoint these concerns and write them down in a list. Later, when you interview prospective accountants, you can return to your list and determine if their services would be a good solution to address your business’s needs.
Why Picking The Right Accountant For Your Business Matters
As a business owner, you pick tools all the time that help your business — accounting software, a new ecommerce site, a file organizer for your office — you name it. One, if not the, most important tool you can pick is a good accountant. A good accountant will help you successfully manage your finances so that your business can be successful and grow.
But there isn’t a one size fits all accountant. The second step in finding the perfect accountant for your small business is knowing which type of accountant you need. There are three main types of accounting professionals: bookkeepers, accountants, and CPAs.
Bookkeepers handle the day-to-day finances and bookkeeping tasks of a business. Tasks can include invoicing, reconciling accounts, managing accounts payable and receivable, creating reports, entering data, and running payroll.
Accountants offer business and tax advice and handle the big picture finances of a business. Tasks can include bookkeeping, business advice and planning, tax advice, tax filing, cash flow management, creating reports, and analyzing business financials.
Certified Public Accountant (CPA)
A CPA, or certified public accountant, is and accountant who has passed a certification exam. Often considered more knowledgeable and trustworthy because of the education and work it takes to get and maintain their licensing. Tasks can include everything an accountant can do, plus the ability to create audit reports and represent your business legally before the IRS.
If you are overwhelmed by daily financial takes and looking to save time, a bookkeeper might be the best way to go as they are often cheaper than accountants. However, that doesn’t mean you should hire just a bookkeeper and call it good. You still need an accountant. An accountant will provide insightful business and tax advice that a bookkeeper can’t.
So the real question becomes, does your business need an accountant or a CPA?
All CPAs are accountants, but not all accountants are CPAs. Here’s how accountants and CPAs differ and what advantages each can offer your business:
|Certified Public Accountant (CPA)||Accountant|
Must have a Bachelor's and have successfully passed the CPA certification exam
Generally has a bachelor's degree, preferably in accounting
Offers advice and insight about the big picture finances of a business, and can often offer deeper knowledge of tax codes
Offers advice and insight about the big picture finances of a business
Can create audit reports and review reports
Can only create compilation reports
Can legally represent a client
Cannot legally represent a client
Often an experienced CPA will charge more than a traditional accountant, but because of their rigorous education and certification, many business owners view CPAs as more qualified and trustworthy. Plus, a CPA can legally represent your business before the IRS in case of a tax audit. If these are qualities your business requires, you can narrow your search down to CPAs specifically.
Another thing to be aware of is that accountants can specialize in certain areas.
An accountant who analyzes books for fraud, inaccuracies, and discrepancies. Often tasked with figuring out if an employee is stealing from the business.
An accountant who helps businesses understand how certain decisions affect their finances. Tasks include planning, budgeting, business strategy, and risk management.
An accountant who focuses on current costs and how they can be improved. Tasks include cost analysis and budgeting.
An accountant hired on a project-by-project basis to manage and oversee a specific business project. Tasks include management, approving expenses, project invoicing, job costing, and maintaining budgets.
Knowing which type of accountant you need and what you need them to do will help guide your search.
Where To Find An Accountant
Step three: where can you find an accountant?
Well, there’s always the good ol’ Internet, but let’s face it — there are just some things you shouldn’t Google and an accountant is one of them. The best way to find an accountant is by getting a referral.
Ask your friends and family if they know of any good local accountants. See what accountant your fellow business owners use. Ask your local Chamber of Commerce or other local small business organizations and clubs if they have any recommendations. One tip from the accounting software provider Patriot Software is that oftentimes if you are a member of your local Chamber of Commerce, you’ll have access to accountants who partner with the organization and provide discounts for their services.
A personal referral is one of the best ways to find a trustworthy accountant, but if this doesn’t work, there are some trusted sources you can use to find and vet a potential accountant including:
- The American Institute of Certified Public Accountants (AICPA)
- The IRS Directory
If you use existing accounting software, you can often find referrals to certified accountants through your accounting software company. The nice part about this is that the accountants will already be familiar with the software you use.
Factors To Consider When Choosing An Accountant
The fourth and most important step to finding the perfect accountant is knowing what to look for. Here are some of the key factors to consider.
Pay attention to the prospective accountant’s credentials. Are they a certified public accountant? Do they have any additional credentials such as a CMA (certified management accountant) or CFE (certified fraud examiner)? Are they licensed to practice in your state? Find an accountant whose credentials you value and trust.
In addition to credentials, an accountant’s experience speaks volumes. Learn where they went to school, how long they’ve been in business, and what area they specialize in. Do they have experience with your specific type of business and industry? This expertise will be key in choosing an accountant who will help you grow.
Every accountant specializes in different areas and offers a variety of services from basic bookkeeping to taxes to audits to business planning and more. Learn exactly which services and tasks a prospective accountant will perform and make sure their work lines up with your business’s wants and needs.
Ask yourself if location matters. In the past, a local accountant was the only way to go. Now, with the rise of the internet, you could opt for a remote accountant. Ask yourself how important face-to-face interaction with your accountant is so you can find the right fit for your business.
As with anything, the cost can make or break your decision. Take a careful look at your budget (or take this time to create a small business budget if you don’t already have one) and see how much you can afford to spend on an accountant. When interviewing prospective accountants, ask them about their fees and pricing structure. You want to get a good deal, but more importantly, you want to get a good accountant, so don’t sacrifice quality for cost.
When choosing an accountant, analyze the prospective accountant’s reputation. Ask for referrals and speak to current clients. Do a little LinkedIn stalking and see how the prospective accountant interacts with their clients. Are they nice? Do they seem excited about their work? Are the customer reviews positive? These are all good signs.
As a business owner, you’re going to be working closely with your accountant so personality matters. Make sure a prospective accountant is someone you can talk with, work well with, and get along with. Figure out if they are fiscally conservative or aggressive. You want an accountant who pushes your business to grow, but you don’t want someone who is on the completely opposite end of the spectrum from you and makes you feel uncomfortable about your finances.
These factors will help you evaluate how well an accountant will fit your business and its needs.
Characteristics Of A Good Accountant
In addition to the key factors for evaluating an accountant, you also want to look for the qualities that make a good accountant. A good accountant should be:
Above all else, a good accountant should be trustworthy. Not only will you be turning to them for wisdom and advice, but they will also have access to sensitive information about you and your business. You want someone who you can trust and communicate with easily. You should feel confident in their ability to keep your information protected and private.
When looking for an accountant, you’ll want to focus on hiring a good communicator that will keep you posted on the status of accounts, taxes, and business reports. Since accountants often have to explain confusing accounting concepts, you’ll also want someone who is a good teacher and skips the accounting jargon so you can easily understand your business’s finances.
An accountant should value your time and perform the services you ask of them in a timely manner. A good indicator of this is if they show up on time for your consultation/interview with them. You can also ask existing clients about the accountant’s track record.
Detail Oriented & Organized
When it comes to accounting, it’s all in the details. Accountants have to be incredibly organized and detail-oriented to handle bookkeeping tasks and successfully analyze every aspect of your business’s finances.
A good accountant should be friendly and have a personality that you get along well with. You’ll be spending a lot of time with your accountant, so you want someone that is a good fit for your business.
Your accountant should be committed to their job as well as to your business. You want someone who is dedicated to his or her work and who is invested in the success of your business.
Knowledgeable & Wise
As accountants are a source of business advice, you want an accountant who is knowledgeable and wise. CPAs are often the most knowledgeable when it comes to accounting and taxes as they have to meet education requirements every year and stay up to date on the latest tax laws. You also want someone who is knowledgeable about your specific type of business and industry so they can offer sound advice to help your business succeed.
When you meet with a prospective accountant, try to get a feel for how well they display these key characteristics and be sure to talk to existing clients about their experiences with the prospective accountant.
Key Questions To Ask Before Hiring An Accountant
The fifth and most crucial step to finding an accountant is actually meeting with them face to face. You’ll want to set up a consultation to get a feeling of who the accountant is, what services they offer, and if they’re a good fit for your business. Accountants want you to work with them, so most offer free consultations.
Treat the consultation like an interview. Just as you’d perform a job interview to see if a potential employee is going to work for your business, interview a prospective accountant to see if he or she can fill the role you need for your business.
Here are fifteen key questions to ask before hiring an accountant:
What experience and credentials do you have?
Ask the accountant what experience, credentials, and licensing they have. Are they a CPA? Do they have any extra credentials like a CMA? And do these certifications match up with the needs of your business?
How long have you been an accountant?
Often, you’ll want a seasoned accountant who has a lot of experience with accounting and your business’s industry.
What made you decide to become an accountant?
This question allows you to get a feel for the accountant’s priorities and personality. Did they go into accounting because they love their work and want to help businesses or did they want a good paycheck? The answer to this can speak volumes about a person and be a good indicator of how well you’ll get along with them.
What types of clients and size of business do you work with?
You want an accountant who has experience working with your business size and type. For example, if you’re a freelancer, you don’t want an accountant who has never had to file Schedule Cs. The more experience an accountant has with businesses similar to yours, the better they’ll be able to help you succeed.
Do you have experience working with the IRS?
If having a CPA who can represent you before the IRS is important to your business, you’ll want an accountant who has previous experience with audits.
What services can you provide my business?
This question is key. Different accountants may perform different services and tasks. Before hiring an accountant, you’ll want to be 100% clear about what they can do for you. If their services match up with your list of business needs, great! If not, you’ll want to move on to the next prospect.
Which accounting programs are you familiar with?
This could be a make it or break it situation for your business. Not every accountant will work with every accounting program. Some require you use QuickBooks, some only work with Xero. Others may be more willing to work with your existing software. If you’re incredibly attached to your accounting software, you’ll need to find an accountant who works with it.
How much do you charge for your services, and how do you bill your clients?
This is probably one of the first questions that come to mind. It’s important to have a clear understanding of exactly how much an accountant charges and how they bill their clients. Some charge per hour, some charge fixed fees for tasks, and others use monthly retainers. Make sure you know exactly how much to pay ahead of time, but also remember that cost isn’t everything. The accountant’s experience and valuable services they can provide your business are just as (if not more) important than the cost.
Will you be doing all of the work or do you delegate or outsource tasks?
Oftentimes, accountants will delegate certain tasks internally to other members of their firm or even outsource certain tasks. Ask who you will be working with most often and what privacy policies they have in place for their outsourcing. As always, never do anything you don’t feel comfortable with, so if you want an accountant who will be doing all of the work themselves, that’s totally okay. There are plenty out there who do.
Will you work directly with my bookkeeper?
If you already have a bookkeeper, ask if your accountant is willing to work with them. Oftentimes accountants will have specific instructions for bookkeepers about how certain transactions should be recorded, and the two should work closely together to ensure your books are balanced and accurate.
When are you available to your clients and how would we communicate with you?
Make sure you know how and when you can reach the accountant if you need them. Choose an accountant whose availability and response times match your wants and needs as a business owner.
Accountants have access to sensitive information about you and your business, like your social security number. Ask what security procedures they have in place and how they protect your privacy. Verify that they will not share your information with third-parties.
How can you help me grow my small business?
This question can give you an idea of what the accountant can do for your business and how they can help your business succeed.
Do you have any references I can contact?
Contacting current clients and asking about their experience with a prospective accountant is one of the best ways to gauge the accountant’s reputation and work.
Is there anything else I need to know about working with you?
This question allows your accountant to mention anything you may have forgotten and gives them a chance to explain why you should work with them.
Do you have any questions for me about my business?
If they say “no,” it’s a red flag. You want an accountant who is interested and invested in your business. This question gives them a chance to demonstrate that care.
Tips For Finding The Perfect Accountant
Here are some of our tops tips and trick to help you in your search for the perfect small business accountant.
1. Ask For Referrals
Networking isn’t just about gaining potential clients but also accessing more resources. Put those networking skills to good use and ask friends, family, and other businesses for accountant referrals. This is often the quickest way of finding an accountant you can trust.
2. Cheaper Isn’t Always Better
We all like to save money, but sometimes cheaper isn’t always better. For example, an accountant just starting out might charge less to file your tax return, but an experienced accountant who charges more could get the tax return done in half the time. When choosing an accountant, don’t just look at the numbers. Look at quality as well.
3. Do Your Research
Choosing an accountant is one business decision you don’t want to rush. Don’t be afraid to take your time, meet a prospective accountant face to face, and ask questions. Check out the accountant’s reputation on LinkedIn and Yelp to see what customers have to say. View how they interact on their social media accounts. Do as much research as you can so you can feel confident in your decision.
4. Treat It Like An Interview
Choosing an accountant can seem daunting, so treat it like something you already know. Hiring an accountant is just like hiring an employee. You’re interviewing them to see if they’d be a good fit for your business. If you like them, great! If not, there are plenty of accountants in the sea.
5. Negotiate Your Fees
It’s always worth a shot. Test the waters and see how movable your accountant’s fees and pricing structure are. Try negotiating for lower fees or ask the accountant’s advice on how you can keep the fees low. Maybe they won’t change the rates, but they might tell you certain bookkeeping tasks you can perform to make their job faster (since most accountants charge by the hour, this can help save you some money).
Bottom Line: Trust Your Gut
When choosing an accountant, it all comes down to trusting your intuition. Trust your gut, listen to your instincts, follow your heart, and so on (don’t make us sing a Disney song about it). Seriously though, if you have a bad feeling about someone, or even if your personalities just don’t mash up, move on and look for an accountant you can trust and work well with.
The Hunt Is On
It’s as simple as that!
- Step 1: Know what you need your accountant to do for you.
- Step 2: Know which type of accountant you need.
- Step 3: Know where to look for an accountant.
- Step 4: Know what to look for in a good accountant.
- Step 5: Know what questions to ask a potential accountant.
Follow our tips and tricks to help you find the perfect accountant and read our comprehensive accounting reviews to find the perfect accounting software to work with them.