For small business owners, hiring an accountant is usually money well spent. According to the TSheets 2019 Tax Season Debrief, 89% of self-employed individuals who hired an accountant to help them with their taxes said doing so was worth it.
According to the survey of 878 US business owners, accountants helped them save money (85%), time (90%), reduce stress (89%), stay compliant (85%), and plan for growth (84%).
If you’re growing your business, managing the financial side of things can be complicated and time-consuming. Beyond tax season, accountants can help in many ways, including protecting cash flow, managing debt, planning budgets, advising on business financing, counseling on the pros and cons of business deals, and more.
Working with an accountant is a long-term relationship, and finding the right fit for your business should not be a flash decision. We asked experts in the field what questions small business owners should ask when evaluating a business accountant.
Many different services fall under the banner of business accounting—from payroll management to tax preparation to financial planning. Peter Gurian, a CPA with Dallas, TX, firm Gurian, says, “Make sure the accountant you’re choosing to hire will save you from having to hire someone else to do a small portion of your business accounting.”
In addition to tax preparation, find out if the accountant you’re considering hiring would represent you in the event of an IRS audit. “You wouldn’t want to hire another accountant to represent you for another tax professionals work,” Gurian stresses.
Accountants sometimes specialize in certain industries or business sizes. Consider what experience they bring to the table, then verify it, says Logan Allec, CPA and owner of Money Done Right, an online resource that helps people make better financial decisions.
“Asking about experience is easy for anyone to bluff,” says Allec. “You must validate their experience by talking with their other clients. And don’t let them wave off your request with something like, ‘Oh, I couldn’t do that for client confidentiality reasons.’”
“It’s important to make sure that your accountant’s tax planning philosophy aligns with your business needs,” says Gurian. “This will be important when it comes to claiming deductions around tax time.”
Allec agrees. “While accounting principles and tax codes are robust, there are still areas for interpretation. Finding an accountant who matches your appetite for risk will ensure the relationship is not strained.”
Fee structures can vary among accounting firms. “Some firms charge by the hour and some firms charge a flat monthly rate,” explains Gurian. “This is important for the type of business you have because some months might require more work than other months. You don’t want to get hit with a surprise bill from your accountant.”
Shop around to get an idea of a price point and model that works for you, and always dig deep to understand if there are any hidden fees.
An accountant is a partner and trusted adviser to your business, making frequent check-ins important. Many business owners get into trouble because they leave everything up to their accountant and aren’t kept in the loop.
“You should be able to set an appointment with your accountant any time of the year to ensure that your accounting and tax needs are taken care of and to ensure they are still the best fit for your business,” says Gurian. “Good accountants won’t wait for there to be a problem and will prevent a future problem from happening by meeting with clients throughout the year to ensure that their business goal still aligns with their tax plan.”
How often should you meet with your accountant? Atiya S. Brown, a CPA and accounting director at The Savvy Accountant, recommends meeting monthly or more if there is anything pressing in the works.
“While I am an expert when it comes to the numbers and financials, I tell my clients they are the experts at their business and they should be aware of everything happening in the business, including the finances,” says Brown. “Make sure you are having regular meetings with your accountant so that you are in the know about what is happening. If you hear, ‘Don’t worry, I handle everything’—run!”
This question can quickly help uncover red flags. You probably want to avoid working with an unresponsive accountant or one whose schedule doesn’t align with yours.
“An accountant is a service provider and they are providing you a tax and accounting service that you’re paying for,” said Gurian. “Any good accountant will return a call, email, or text.”
In addition to gauging availability, find out who your day-to-day point of contact will be. “In larger firms, senior members typically focus on sales while leveraging junior staff to perform the work,” explains Allec. “Developing a strong relationship with the whole team is important for success.”
Getting to know an accountant before you hire is critical, advises Monique Swansen, founder of Massachusetts-based firm Automated Accounting Services. “Working with the right accounting professional is one of the best business decisions you can make. There should be a continuous flow to the getting to know you process. If the accounting professional is dodgy or unclear, speaking in jargon you don’t understand, they probably are not a good fit.”
Swansen offers sound advice for making the right choice. “Check social profiles and ask for references and ask questions. If you decide to engage an accounting professional, be sure you have an agreement in writing that covers the entire scope of work and outlines your expectations.”
Disclaimer: Fundbox and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Please consult a tax professional for information about tax laws and how they apply to your business.