Some entrepreneurs feel like working with an accountant is expensive, but when you think of everything a professional accountant can do for you, they’re actually priceless! Some of these things include staying current on tax changes so you can save the most tax, filing paperwork on time so you don’t get charged unnecessary penalties, and analyzing your business income and expenses to help improve your bottom line. In this post, you will learn how to find an accountant who will become your trusted business advisor.
1. Determine your business goals. Before you start interviewing prospective accountants, you need to consider why you want to work with an accountant. I recommend all entrepreneurs work with a professional accountant, but the one you end up hiring is going to be determined by what you want to accomplish in your business.
Because there is such a wide-variety of things accountants can do to help you in your business, they often specialize. Some accountants prefer to work with sole proprietors or only business owners from certain industries. Many accountants will prepare and file tax returns but would rather not keep track of your monthly bookkeeping or help you with hiring decisions.
Here are some goals to consider when you're first starting your search for an accountant. Do you want an accountant who can help with any of the following?
Tax return preparation and filing,
Tax planning (saving tax in the future),
Bookkeeping set up and training,
Payroll training and/or preparation,
Business growth strategy, and
Brainstorm some of the things you’d like help with in your business before moving to Step 2.
2. Research your options. The easiest place to start looking for an accountant is online. Start by looking for someone in your area. Try a Google search for your area and accountants or CPAs. Hopefully the results turn up some good websites for you. You can browse the websites to try and determine if the accountant provides the services you are looking for.
If you have friends that are business owners, you can ask them for a referral. This is a good starting point but keep in mind that depending on your friend’s business, their accountant may or may not be the right fit for you and your business. If you belong to a local business networking group, you may find there are some CPAs that also belong to that group. This is a great way to meet and get to know some accounting professionals in a less formal environment.
Some bookkeeping apps include a list of CPAs who are familiar with those programs. These CPAs may not be in your area but if having someone who is familiar with your bookkeeping system is important to you, this may be worth investigating.
3. Choose your top three prospects. Once you have done some initial research online or through your business contacts, choose the top three professional accountants that you would like to interview. This is where you will consider your goals from Step 1. Hopefully you were able to garner enough information from the websites you found to determine if the services the accountants provide line up with your goals. Sometimes this is difficult to tell from a website, but don't worry, in the next step, you will create a list of questions to ask your prospects.
So, how do you decide on the top three accountants to interview? This might be based on the look and feel of their website, their about page, or even their location in relation to your business. Don’t stress about it too much at this point. We will be digging a lot deeper to find the perfect accountant for you.
4. Create a list of questions. You are going to be interviewing potential accountants by asking them a lot of questions. This person is going to be an important advisor for your business. Ideally, you want to create a long-term working relationship with them. To prepare for your meeting, create a list of questions you would like to ask the accountants. These questions are going to be based on the goals you stated in Step 1.
For example, if one of your goals is to save tax, you will want to know if the accountant is up-to-date on tax law changes and provides tax planning services. This is important, not only because saving tax is one of a business owner’s major goals, but also because tax laws can change so frequently. If you're going to need help with your bookkeeping, you want to make sure the accountant is familiar with the bookkeeping system you will be using.
Because there are no regulations regarding who can call themselves an accountant, I always recommend business owners find out if the accountant has a professional designation. You will usually be able to tell this from their website or they may have certificates hanging in their office. Professional accounting associations exist to protect their members and the public, so you can also find out from your local association if the accountant you are considering hiring is a member in good standing.
If you need help coming up with questions to ask the accountants you will be interviewing, check out this free workbook I created for my book, Keep More Money.
5. Interview your prospects. Now that you’ve created your list of questions and you’ve booked some time to meet with prospective accountants, you’re ready to interview them. This is similar to a job interview only you are the one asking most of the questions. There are some key things to look for during an interview with a prospective accountant.
Are they taking notes? If the accountant is serious about taking you on as a client, they should be taking notes about you and your business.
Are they making eye contact with you? Eye contact is a sure sign that someone is interested in what you have to say. This is just as important when you are meeting with an accountant. You need to be comfortable sharing personal details with them so it’s important to feel like they are listening to you.
Are they asking you questions? The key to any good conversation is back-and-forth questions. This is another sign that the accountant is interested in you and your business. Even if they are taking notes, they will likely ask you clarifying questions and genuinely want to get to know you and your business.
6. Understand how you will be charged. One of the big questions people are often afraid to ask an accountant is, “How much will it cost?” Don’t be afraid of this question. Accountants get asked this all the time. A better way to phrase this, “What kind of billing method do you use?”. There was once a time where all accountants charged an hourly rate. Although you may be able to differentiate accountants based on their hourly rates, this is misleading. People are different and it may take them different amounts of time to complete the same job. Just because one accountant’s hourly rate is lower, doesn’t mean the job will end up costing you less.
Charging by the hour is an old way of doing things and it really doesn’t help the client know how much a job will cost them unless the accountant can give them a clear estimate of how long the job will take. If you find an accountant you’d really like to hire, don’t be afraid to ask for an estimate to get a better idea of what the job might cost you.
A better way of charging is a fixed rate (also sometimes called a flat fee). This means that to have your tax return and financial statements prepared it will cost you $X, no matter how long it takes. It’s also becoming more common for accountants to bill large jobs monthly over the course of the year, so you can also ask if that’s an option.
7. Review your notes. After you’ve interviewed all the accountants you’re considering hiring, unless you already have a clear feeling about who you want to hire, you’ll want to review your notes and compare them to your goals. This will give you an idea about which accountant is going to be able to help you meet those goals the best. If you’re having a hard time deciding, you might want to make a pro and con list.
If you find there are two accountants you just can’t decide between, consider their office staff. Accountants are busy and there’s a good chance they won’t always be the person you are dealing with. Did you get a good feeling from the office staff? Would you feel comfortable working with them if your accountant isn’t available? If this is a concern for you, then make sure you ask about this during the interview.
8. Hire your accountant. Now that you’ve made your decision, it’s time to let the accountant know. If you need their help right away, and you didn’t discuss that during your first meeting with them, they will likely want another meeting to discuss the work you need done. They may ask you to sign an engagement letter. This is a fancy way of spelling out the terms of their service. It protects both you, the business owner, and the accountant.
An engagement letter typically states what the accountant will be working on. Depending on the accountant, the engagement letter may also include the price and due date. If the service is ongoing then the price and due date will likely not be included and there will be a paragraph describing how the terms of service can be broken (for example, with 30 days notice). You are usually required to sign the engagement letter so be sure to read it carefully.
Once you have decided on accountant, it’s a nice professional courtesy to let the other accountants you interviewed know that you won’t be requiring their services. If you are comfortable telling them why, then you can go ahead and do that, otherwise you can just say that you’ve found someone else.
9. Learn the processes your new accountant follows. Accounting offices have many systems they follow, including how they receive and process information from clients. Some firms still like to have paper copies of all your documents and others prefer digital methods of accessing your documents such as secure client portals online. If you have a preference one way or another, this is something you might want to add to your list of questions when you interview accountants.
Learning how to deliver documents to your accountant as well as how your financial statements and tax returns are given to you when complete will streamline things during tax season. Tax season is a very busy time at accounting offices so the more you can prepare for ahead of time, the better. Most accountants will meet with you to discuss your documents both when you drop them off and when your documents are ready to be picked up.
10. Check in regularly. Working with an accountant isn’t something you can set and forget. In many cases, your accountant will track deadlines for you, but you’ll want to make sure you confirm that. In order to have the best working relationship with your accountant, it’s important to check-in with them more regularly than once a year when it’s time to file your taxes.
At the very minimum, it’s a good idea to check-in with your accountant every time something major happens in your business. This includes things like buying a new piece of equipment, hiring your first employee, getting a major contract, or expanding into a new territory. If your accountant is handling your regular bookkeeping for you, then you should be checking in with them every couple of weeks. Some clients like to check-in every time they have a form to file with the government. These forms can include things like sales taxes, payroll remittances, and worker’s compensation.
Working with an accountant can be intimidating for new business owners but it doesn’t have to be. If you follow the steps above to research and take your time hiring the right accountant, you will be well on your way to cultivating one of the most critical relationships in your business.
Prepare to interview the accountant by considering the questions you want to ask them. Take lots of notes and don’t be afraid to ask anything that comes up that’s not on your list of questions. If you’re not sure what to ask, check out my book Keep More Money: Find an Accountant You Trust to Grow Your Small Business, Increase Profit, and Save Tax. I’ve included over 100 questions throughout the book that you can use to interview an accountant.
To learn more about working with an accountant and organizing your documents for tax season, check out my Skillshare class, Do You Need an Accountant? Get two months of Skillshare Premium with my affiliate link.