How to Find an Accountant For a Small Business

When it comes to handling finances some have chosen the DIY approach, cobbling together a mish-mash of self-service tax software and good old fashioned arithmetic. But as any small business owner knows, running your own thing takes work — a lot of it, and you’ve already got enough on your plate. Yet, for  a lot of business owners, it’s hard to loosen the leash and trust someone else with your hard-earned dollars.  If you’re ready to take the leap, here’s how to find the right accountant for your small business.

Steps to Finding a Small Business Accountant

  1. Pinpoint Business Needs

First things first, when beginning the process of hiring an accountant, you need to know exactly what it is you’re looking for.  Many businesses struggle with how to find a good accountant. The truth is there are lots of different kinds of accountants who specialize in a whole range of things. And often, most business owners are really looking for a bookkeeper who may have some accountant-like skillsets, but by no means are always certified CPAs. Let’s break it down a bit further. For example,  if you’re looking for tax advice and help filing your tax returns, you opt for an enrolled agent (EA) instead of a full-on accountant. However, if you’re looking for both business and tax advice, a certified public accountant (CPA) with specific expertise in your industry might be a better option. For reference, here’s a rundown of several common finance professionals and what they may help you with:
    • Enrolled Agent
Enrolled agents are tax advisors who are a federally authorized tax practitioner empowered by the U.S. Department of the Treasury. Enrolled agents represent taxpayers before the Internal Revenue Service (IRS) for tax issues including audits, collections and appeals.
    • Bookkeeper
Bookkeepers typically handle the everyday kind of finances and small business accounting tasks. These may range from invoicing and reconciling past-due accounts to managing accounts creating reports, data entry, and maintaining payroll.
    • Accountant
Accountants typically offer both business and tax advice and help their clients get a birds’ eye view of their financial outlook. Accountant responsibilities may also include some elements of bookkeeping along with business advice and planning, tax advice and filing, cash flow management, report creation, and business analytics.
    • Certified Public Accountant (CPA)
A CPA, or certified public accountant, is an accountant who has successfully passed several certification exam (four in fact). This is no easy feat, and for this reason CPAs are often considered more experienced and trustworthy. CPAs can do everything a non-certified accountant can do but they also may help audit reports and, if needed, they can act as legal representation on behalf of your business for the IRS. So, here’s the rub: does your business need a bookkeeper or an accountant? What about a certified CPA? If the day-to-day accounting of products or invoicing is completely consuming the other areas of your business (like completing the work/product that keeps you profitable) and simply just need to save some time, consider starting off with a bookkeeper.  Typically, though, a small business owner can’t go wrong  with advice from a professional CPA who can offer a broader range of experience and skills. Just keep in mind, all CPAs are accountants, but not all accountants are CPAs. If still in doubt about how to choose an accountant, start by taking a look at your finances and writing the top three financial issues your business struggles with most, such as cash flow, invoicing or future financial planning. Once you have a better idea of what your businesses’ pain points are, the easier it will be to pinpoint the type of financial help that’s best for you.

2. Research & Network

Before making any type of commitment or investment (especially one that involves your time and money) it’s really important to do your research. Luckily, it’s easier than ever to go online and read reviews through a variety of platforms. LinkedIn, Yelp and Thumbtack, among many other services can help you find the best rated accountants in your area.  But even better, really strong accountants will have no problem giving you a reference list so you can decide for yourself. Having a ten-minute interview with some of these references should help confirm some of the information you heard from the accountant and help you get a feel for how their clients feel about working with them. These conversations by no means have to be long. Keep them short and sweet and make sure to high the highlights. For interviews with accountants make sure to ask things like:
  • What’s their professional network like?
  • What are their qualifications?
  • What services do they offer?
  • Have they received recommendations? If so, could you connect with those individuals?
  • Have they received any recommendations from their clients?
  • What’s their tenure in the industry?
  • How do they label themselves: certified accountant, a bookkeeper, a financial advisor or something else?
  • What software do they use?
For interviews with references make sure to ask questions such as:
  • How long have you worked with the particular accountant?
  • How strong do they feel their small business accounting tips have been?
  • What industry does the reference work in?
  • How has the relationship changed/driven business outcomes?
  • Would they continue to recommend the finance professional?
You may also want to inquire about any details regarding response time or challenges they’ve experienced. Let’s quickly return to the software question. All accountants typically have a preferred software. Unfortunately, software issues can arise if your company uses a different kind of software than your chosen accountant. Exporting and importing data across platforms can lead to errors and all sorts of glitches, not to mention it could also lead to some security issues.  If possible, it’s best to go with professional who use accounting software that’s recognized in the market or even better, cloud-based systems.

3. Negotiate & Set Expectations

When it comes to moving forward with a professional, don’t forget to pack your poker face. As with any kind of business dealing, you don’t want to blindly accept the first offer given. If you’ve been thorough with your research you know what the competitive rates are and it will better allow you to determine where to push and where to draw the line when paying for certain services. You’ll likely find that all accountants charge differently. Some will charge by the hour and some might charge a monthly retainer. Meanwhile, other accountants may charge using a percentage system. Likely you’re already well-versed in the art of negotiation, but this is most definitely a case where it should be implemented. Before you get to this stage, it will be important to take the information you learned from your interviews and apply them to a range of financial scenarios in order to anticipate if a particular accountant’s fee structure will make sense for your business long-term. Keep in mind that things may shift.  That’s okay, but you may want to consider asking if the accountant would be open to a blended fee structure or a sliding scale, based on need and usage. The bottom line is: if you don’t ask, the answer is always no. Finally, once you’ve made an agreement, it’s always best to set expectations upfront. What kind of expectations? Well… start with the big ones and go from there. These may include what services they will assist with, how often they will communicate, when and through what medium (for example, perhaps you operate better in-person or over the phone, but because of their client load your chosen accountant operates almost solely through email). The more you can align on in the beginning the better!