How to find the right accountant for your business

No business is an island. Many small business owners (SBOs) turn to attorneys, bankers, insurance agents, staffing services, and so on, to support their growing businesses. But one professional tops the list in order of importance to small businesses – accountants.

An accountant can do many things to help SBOs manage their finances, some well known some less well known . At the end of the day, a good accountant is an invaluable resource who can help you make more informed decisions about managing your taxes, hiring, developing budgets, protecting cash flow, and more.

But where do you find a good accountant? What criteria should you use for evaluating one?

In this article, part of our Small Business Guide to Accounting series, we answer these questions and put you on the right path to a rewarding accountant relationship.

How to Find an Accountant for your Business

The first thing to recognize about finding an accountant is that the relationship is for the long haul. An accountant is a trusted advisor who will get to know and advise on the most intimate details of your business. Searching online for such a valued resource is like opening a can of worms, you’ll be bombarded with sponsored ads and listings with no real way of determining who’s worth pursuing and who’s not.

Instead, start your search with referrals. Pick the brains of fellow business owners, ask your lawyer, or banker. Your local chamber of commerce or Small Business Development Center are great meeting points for business owners. Attend a few networking or meet-up events, you’ll be surprised how eager your peers are to offer recommendations.

Understand the Difference Between a CPA, a Bookkeeper, and an Accountant

Not all accountants are created equal. So, it’s important to understand your accounting needs before you start your search.

A bookkeeper, for example, is someone who can help record transactions, such as accounts receivable and payable, pay sales taxes, etc. But a bookkeeper can’t offer financial or tax advice.

An accountant, on the other hand, does all the above, but they also prepare financial statements (profit and loss statement, balance sheet, etc.) and taxes.

However, a regular accountant is not recognized by the IRS as representing clients. For this, you’ll need a CPA or tax attorney.

A CPA is top of the ladder when it comes to accounting. They have passed exams and achieved certifications. A CPA is more knowledgeable in tax codes than an accountant and is eligible to sign tax returns on your behalf and represent you in front of the IRS in the event of an audit. In addition, a CPA can perform financial statement audits and reviews.

To find a CPA you can use your referral network or search the American Institute of Certified Public Accountants (AICPA) website .

How to Evaluate Candidates for your Accounting Needs

Once you have a pool of possible candidates, it’s time to find out which one is the right fit for your needs, business, industry, and preferred way of working. As you meet and greet accountants, have a list of prepared questions:

  • “Tell me about your experience with small business”. Small businesses have unique challenges and dynamic accounting needs. Focus can shift in the blink of an eye from cash flow concerns to taxes to hiring to needing help with a loan application. What experience does the accountant have with small businesses? Do they work much with businesses structured like yours, whether you’re a sole proprietor, LLC, partnership, or S corporation? Ask for references to back up any answers.
  • “How familiar are you with my industry? ” Accountants often specialize in certain industries. If you’re a franchise, for example, it would be helpful to have an accountant who understands franchise business models.
  • “What range of services do you provide? ” 71% of small businesses turn to an accountant to help with tax preparation. But that’s not all they do. Accountants can provide long-term strategic advice and help with important accounting tasks like budgeting, payroll, accounts receivable management, as well as informing growth decisions like hiring, financing, etc. In addition to asking what services they provide, don’t shy away from asking how they can help you grow your business too.
  • “How do you bill for services?” Most accountants charge by the hour. However, others may offer a monthly retainer. Dig deep to understand what the fee includes, are there any add-ons? Shop around to get an idea of a price point and model that works for you.
  • “Who’s my point of contact? ” Since an accountant is a trusted advisor, find out who you’ll be working with day-to-day. Smaller firms may team you with a senior partner which might be a better fit for you as you seek to build a lasting relationship. Larger firms may not provide this kind of personal touch.
  • “How will you get to know my business? ” Even if your accountant is just doing your taxes, they need to get to know your business so that they can help you make informed decisions. How will they approach this task? Other things to consider is how you’ll work together? What kind of schedule will they keep? How often will you meet (in person, by phone)? How quickly do they respond to questions and requests?

Choosing an accountant is one of the most important decisions an SBO will make. Take your time with your search, don’t just rush into a relationship during tax season, plan, assess your needs, but don’t put off this important milestone in your business growth until it’s too late.

Previously in the Small Business Guide to Accounting:

  • Which is the Best Accounting Method for your Business, Cash or Accrual?
  • What an Accountant Can Do for Your Business, and What They Can’t
  • 12 Accounting Terms Every Business Owner Should Know

Disclaimer: The information in this blog doesn’t replace the advice of a tax or legal expert. 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. If you have any questions about your small business tax situation, talk to a professional.

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As a small business owner, it’s important to consider all aspects of your finances. A reliable accountant can help you with bookkeeping, balance sheets, and so much more! The key lies in finding that perfect professional fit and working together for years to come. Here are some tips to find the right accountant:

Table of Contents

Establish Needs

Before looking to hire an accountant for your business, you need to assess what you require help with. A non-certified accountant or bookkeeper, for example, is more than adequate if you just need financial statements or bookkeeping tasks carried out. However, for tax related tasks and audits or company incorporation in Singapore always choose someone who’s either a CPA or a fully certified accountant.

Go Small Over Big

Don’t choose a big accounting firm for your business. You need the help of someone well-versed with small businesses, and if they happen to have accounting experience within your niche industry, they’re an even better fit! An accountant that has a deep understanding and experience working with small businesses will help your company excel and will offer the right advice for the growth of your company.

CPA Firm Vs. Accountant

Small businesses that are just starting out will often handle their own accounting. Modern technology makes it quite easy to do bookkeeping and tax preparation on your own using popular software such as Xero, Sage or QuickBooks.

How to find the right accountant for your business

As your business branches out and grows, it makes sense to delegate certain tasks to other professionals; this will include payroll, accounting, and taxes. Based on the volume of transactions carried out each month, you need to consider whether to hire a CPA or a solo accounting firm.

Gather Recommendations

Perhaps the easiest and most trusted method of finding an accountant is to use word-of-mouth recommendations. Get in touch with other small business owners or peers you know to ask them how they handle their accounting needs. Make sure to get details as well about how bookkeeping works and how much you need to budget for these services.

Comparison Shop

Accountants all charge fees in a different manner. Some will charge you a flat rate every month for their services and this will include tax preparation and bookkeeping. However, many charge separately for the different tasks being carried out. Understanding the billing process of a firm can help ensure that you hire one you can work closely with. It’s not uncommon either to find an accountant that charges an annual fee for given services. However, you will need to carefully look at your budget and outgoing expenses to figure out which accountant works for you.

Go Social

Social media is an indispensable tool in helping you narrow down your options. Whether you’re considering an accountant or a firm, check for social media presence on LinkedIn. Having a solid presence ensures they can backup their claims, and it also allows you to look at client recommendations. In this day and age, social proof is necessary in reaffirming your belief that you’re hiring someone with the experience and expertise they claim.

Know About Accounting Software

Some accountants still rely on old school software solutions, but you will need someone that can teach you the ropes of using the latest technology. There are many new types of software on the market that make accounting a breeze, and it is these professionals you should aim to work with. Bear in mind, the software your accountant uses is the one your company will need to adopt, so consider carefully.

Cloud Technology

Is your potential accountant using cloud technology? Many are making the switch to cloud computing as it offers a wide range of benefits such as data security, remote accessibility and electronic invoicing. Using an accountant well-versed in cloud computing allows you to have better communication. If you have a question that needs a quick answer, your accountant can respond in a timely manner using the cloud remotely.

Reporting Frequency

When you’re just starting out and looking to grow your business, it’s vital to your success that you choose an accountant who reports to you frequently. Constant communication and up-to-date financial statements can help you make better choices for the future of your company. Your accountant should really serve their purpose as a business advisor and not just someone you defer to during tax season. Know what you prefer and expect from your accountant in terms of communication and the frequency of updates. Having this established from the start, you can continue your search and easily rule out those that simply don’t fit this requirement.

Interview Several Accountants

Perhaps the most important aspect of finding the right accountant or firm for your company is to conduct an interview process. Your accountant should feel a sense of loyalty and remain on your team while they work for you. This involves understanding your needs and fully respecting them, even during the interview process. When you’re first searching for your perfect accountant, you may feel a bit of discomfort gauging them to this extent. However, when you think about the distant future of your company, you will be glad you were this thorough in the initial stages.

Your business needs the best accountant you can afford, and in order to make wise decisions for your company, you need constant updates. An accountant that’s well-versed in modern technology and offers innovative solutions is the one you should aim to work with. Though finding the perfect fit is difficult, it’s not impossible!

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How to find the right accountant for your business

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With a variety of accounting apps and tax resources available at your fingertips, it’s easy to overlook the importance of an accountant when it comes to your business. Why pay for someone’s services when you can secure them for yourself for a fraction of a fee? But new and seasoned small business owners will admit that the right accountant can save your business thousands of dollars, help you avoid costly legal and tax mistakes, and offer strategic advice that can yield financial growth.

But even if do you know that hiring an accountant is the best option, how exactly do you find the right one for your small business? After all, your financial integrity is on the line, and you don’t want to entrust that to just anyone.

If you’re considering hiring an accountant, whether it be to file your taxes or act as a guiding force in your financial decisions, there are a few questions that can help you hire the best person for the job.

1. Are they a certified?

A Certified Public Accountant (CPA) is an accountant who has undergone rigorous state licensure requirements, including a multi-day CPA exam as well as professional experience and ongoing educational requirements. Both accountants and CPAs can complete basic accounting tasks, and in many cases, both can be highly skilled in their field, but there are some distinct advantages to hiring a CPA.

A CPA is typically well versed in the continuously changing tax law and, if specialized, industry specific requirements — something important to small businesses. Additionally, although accountants can create and analyze your financial reports, it’s a CPA that will offer strategic advice. Finally, and perhaps most importantly when it comes to your business, a CPA is the only one of the two who is eligible to represent you with the IRS, specifically during auditing efforts.

Hiring a CPA may cost a little more, but many small business owners find that it’s well worth it.

2. What type of experience do they have?

Without the right experience, even the most qualified accountant may not be the best one to manage your business financials. As you review candidates, it’s important to inquire about their experience, specifically as it pertains to your businesses.

The best person for the job will likely have experience working with small to medium-sized businesses. Similarly, an account that has experience working with businesses within your industry may also be a better fit as they will be familiar with industry-specific rules, regulations, and even growth strategies. This is particularly important if you’re seeking an accountant that will take on an advisory role.

How to find the right accountant for your business

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3. Are they highly recommended?

Finding an accountant can be overwhelming, especially if the first place you look is the internet. One of the best ways to kick start your search is by asking fellow professionals and business owners for a recommendation.

If you haven’t received a specific recommendation, you may also want to consider asking the potential candidates for references, which will allow you to contact existing or past clients for feedback.

4. Does location matter?

In the past, location often played a primary role in selecting the right accountant, but as time has changed and technology has provided us with a digital bridge to close locational gaps, location isn’t always a deal breaker.

If you’re comfortable primarily relying on email, chat and/or the phone to conduct a significant amount of your business, then you may not care how close the candidate is to your office. However, if you prefer more frequent face-to-face visits or want the opportunity to make office calls, then you will need to limit your search to a comfortable radius.

5. Are they accessible to their clients?

One factor that can really help you refine your search is communication and accessibility. Fruitful relationships are those that allow for open communication, and that means working with an accountant that can make themselves available to you or your employees, within reason, of course.

It may not be easy to determine this before you hire them, but there are some ways you can get a feel for their communication habits. For instance, emails and calls should be returned in a reasonable amount of time, and they should be willing and eager to take time to speak to you to determine if the potential relationship is a good fit.

If they don’t return your calls or emails, are hasty in their responses, or don’t have time to field basic questions, then they may not be the right fit for you. In short, if you don’t feel important in your initial exchanges, you likely won’t feel important once you begin your professional relationship.

6. What type of availability are you looking for?

In some ways, this question is similar to the one below, but in reality, it is more about your overall expectations. While some business owners are looking to hire an accountant to complete specific yearly tasks, others want accountant who is available to answer questions or offer advice year round

The right accountant can be a vital resource for your company, and as you search for one, you’ll need to audit your needs and expectations. By answering the questions above, you can filter through candidates and select an accountant who represents a good fit for your business.

How to find the right accountant for your business

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This article was originally written on January 22, 2019 and updated on February 1, 2021.

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ABOUT AUTHOR

Jennifer is a alum of the University of Denver. While in the graduate program there, she enjoyed spending time identifying ways in which non-profits and small businesses could develop into strong and profitable organizations that while promoting strong community growth. She also enjoys finding unique ways for freelancers and start-up businesses to reach and expand their goals.

How to find the right accountant for your business

Accounting can seem like a black-and-white profession. Numbers are numbers. Ten accountants should be able to assess the same financial records and come up with duplicate figures for cash flow, net income, profit and loss, sales and so on. Ditto for dealing with tax returns. Not so fast. There are “right accountants” and “wrong accountants” for your business. Here are some ideas for finding the “right” accountant for your business.

1. Clarify What You Want the Accountant to Do

Many business owners think that the purpose of an accountant is to help with taxes, balance sheets and the like—nothing more. Of course, that’s all that happens in some cases, especially for new businesses or businesses that don’t plan to grow.

However, an accountant can do so much more. For instance, having a third party do your business accounting is a way to gain perspective on your operations. The accountant can identify patterns, areas where costs can be trimmed and much more, and compile them in a report. In such a case, you probably want to interview only accountants who have experience in your industry. You may also want to consider only accountants who have the CPA designation.

This article explains the ways in which businesses can benefit from their accountants. Choose what works for your business.

2. Seek Referrals from Colleagues and Other Professionals

Explain to a few trusted colleagues or other professionals you work with that you’re looking for an accountant. You hope this person will have a, b and c credentials or be able to do x, y or z.

Your business lawyers are a good group to turn to for this type of referral. Business lawyers often work with accountants. They know who might fit well with your business.

3. Conduct Interviews

Now it’s time for interviews! Set up a small number to start with, perhaps no more than two to three candidates so you can keep the process efficient.

Discuss points such as:

  • What you’re looking for in an accountant
  • How the accountant tends to work with clients?
  • How often the two of you will talk. What is their availability?
  • If the accountant or someone else will be your main contact person
  • The accountant’s fee structure
  • Do they provide bookkeeping services as well as year end income tax returns?

You’ll also want to understand:

  • Some of the important tax benefits of carrying on your business through a corporation (like the small business deduction or the lifetime capital gains exemption)
  • How you will pay yourself from the company? Dividend or salary or some combination?
  • Whether you need an HST account and/or Payroll account?

It’s also helpful to explain your business situation in general terms. Accountants will often give you some ideas during the interview on how to save money or streamline your operations. Their ideas lend insight into your business and which accountants will work best for you.

Consider factors such as how approachable and how reachable the person is when choosing among candidates who otherwise seem equal.

5. Revisit Your Needs Periodically

Your business accounting needs may change. Your operations could outgrow your accountant, or you realize that you’d like someone different. It’s OK to change accountants as needed.

Business accounting isn’t just about a number-cruncher. It’s about finding the right mix of skills to meet the unique needs of your business. We at Ordower Law can help with the search.

How to find the right accountant for your business

Accounting can seem like a black-and-white profession. Numbers are numbers. Ten accountants should be able to assess the same financial records and come up with duplicate figures for cash flow, net income, profit and loss, sales and so on. Ditto for dealing with tax returns. Not so fast. There are “right accountants” and “wrong accountants” for your business. Here are some ideas for finding the “right” accountant for your business.

1. Clarify What You Want the Accountant to Do

Many business owners think that the purpose of an accountant is to help with taxes, balance sheets and the like—nothing more. Of course, that’s all that happens in some cases, especially for new businesses or businesses that don’t plan to grow.

However, an accountant can do so much more. For instance, having a third party do your business accounting is a way to gain perspective on your operations. The accountant can identify patterns, areas where costs can be trimmed and much more, and compile them in a report. In such a case, you probably want to interview only accountants who have experience in your industry. You may also want to consider only accountants who have the CPA designation.

This article explains the ways in which businesses can benefit from their accountants. Choose what works for your business.

2. Seek Referrals from Colleagues and Other Professionals

Explain to a few trusted colleagues or other professionals you work with that you’re looking for an accountant. You hope this person will have a, b and c credentials or be able to do x, y or z.

Your business lawyers are a good group to turn to for this type of referral. Business lawyers often work with accountants. They know who might fit well with your business.

3. Conduct Interviews

Now it’s time for interviews! Set up a small number to start with, perhaps no more than two to three candidates so you can keep the process efficient.

Discuss points such as:

  • What you’re looking for in an accountant
  • How the accountant tends to work with clients?
  • How often the two of you will talk. What is their availability?
  • If the accountant or someone else will be your main contact person
  • The accountant’s fee structure
  • Do they provide bookkeeping services as well as year end income tax returns?

You’ll also want to understand:

  • Some of the important tax benefits of carrying on your business through a corporation (like the small business deduction or the lifetime capital gains exemption)
  • How you will pay yourself from the company? Dividend or salary or some combination?
  • Whether you need an HST account and/or Payroll account?

It’s also helpful to explain your business situation in general terms. Accountants will often give you some ideas during the interview on how to save money or streamline your operations. Their ideas lend insight into your business and which accountants will work best for you.

Consider factors such as how approachable and how reachable the person is when choosing among candidates who otherwise seem equal.

5. Revisit Your Needs Periodically

Your business accounting needs may change. Your operations could outgrow your accountant, or you realize that you’d like someone different. It’s OK to change accountants as needed.

Business accounting isn’t just about a number-cruncher. It’s about finding the right mix of skills to meet the unique needs of your business. We at Ordower Law can help with the search.

How to find the right accountant for your business

You might not have a full list of employees on the payroll yet, but many small business owners find they have a need to turn to an accountant for financial help from their very beginning of their new venture. Whether you need assistance filing taxes, want someone to act as a financial advisor, or need help compiling your financial statements, finding the right accountant can be a huge advantage to your business.

But how do you find the right accountant for you and your business? Every accountant has different specialities, interests, and qualifications. Finding the right person can be tricky.

To find the right accountant you need to ask the right questions. I talked to George Williams, the president and CEO of Boca Bookkeeping, an accounting services firm that offers support to businesses large and small, and together he and I assembled a list of questions to help you match an accountant to your business needs.

1. What does your company need?

To find the right accountant, you’ll need to start with a basic question: What does your company need? Decide what kind of services you need before searching for an accountant, not the other way around, Williams says. Do you need help with your taxes? Do you need someone to help with your daily accounting practices? Is financial tracking something you’re missing? Figure out the primary reason you feel like you need an accountant, and then look for someone with a set of skills to meet your needs.

2. Who are the main players?

Next, you’ll want to conduct a search for accountants. A lot of business owners look for someone who is local, but there are a lot of affordable services online too. You might feel more comfortable with an accountant who has an office just down the road, but online services can be just as accommodating provided you’re willing to communicate electronically. Either way, identify a small group of players that fit your needs.

3. What kind of reputation and experience does the accountant have?

Before talking with an accountant, do a little homework. Look online for reviews, or chat with local business owners to get some background on a particular accountant. This step should help you narrow your field.

Once you’ve narrowed your list of potential accountants to the final two, set up an appointment with each accountant. Go into the appointment prepared with a set of questions. Here are a few questions that you’ll want answers to:

  • What’s your experience with small businesses?

It goes without saying that you want an accountant with extensive experience, but you also want one who has experience with businesses that are structured like yours. In other words, if your business is an LLC, make sure the accountant is currently handling other LLC accounts.

  • What experience do you have with my industry?

It’s not enough to just have an accountant. You want an accountant who is familiar with your industry, and your industry’s unique issues and needs. Otherwise, they may be missing valuable tax deductions, or giving you advice on your financials that isn’t based on your industry’s standards.

  • Who will I be working with?

You want one point of contact. As a business owner, you want to know that you can pick up the phone at any time and get advice from the person you’ve developed a relationship with. Few things are more frustrating than constantly being rotated through a team of people and having to re-explain your questions and concerns.

  • Do you offer the services that I need?

Make sure the accountant offers all of the services you need. There’s no sense in hiring someone who can only do a portion of the tasks.

4. How will you be billed?

Before moving forward with your accountant of choice, make sure you understand how the accountant bills for services. Billing structure can vary pretty widely. Some accountants charge by the hour, others have flat rates per service, and others use some combination of the two.

Don’t forget to ask about charges that could occur, that haven’t been discussed yet. That might seem like an odd question, but you could be surprised by the answers you get. Better to be surprised now, before you’ve made any commitments, than to be surprised by your extra-large bill.

Do you have an accountant? Are they a good fit or a bad fit for your business? Share your experience and advice in the comments!

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How to find the right accountant for your business

Lisa Furgison

  • How to find the right accountant for your business

Lisa Furgison is a journalist with a decade of experience in all facets of media.

As a small business owner, managing your cash flow and ensuring that you’re able to pay your bills is a hugely important responsibility. But at the end of each financial year, you also need to think about your tax liability for those past 12 months. And this can prove a colossal headache. Even businesses that are meticulous in their bookkeeping can struggle when it comes to fairly and accurately reporting to the Australian Taxation Office (ATO). You can handle all of your own tax compliance . But in our experience, it’s always best to defer to the expertise of an accountant.

An accountant can help to ensure that your small business remains tax-compliant, while also ensuring that you don’t overspend on your tax and compromise your future cash flow. A good accountant will almost certainly save you more than they cost. But with so many of these skilled professionals to choose from, how do you know which is the best for your business?

Fortunately, we live in the digital age, which means businesses can carefully vet and research prospective accountants online before entrusting their business’ finances to a stranger. Here’s what to look for.

They are qualified and registered

It goes without saying that you should only entrust your business finances to a fully qualified accountant who is registered with all the appropriate regulatory bodies. Check if an accountant is registered at the online tax and BAS agent register if you want them to handle your business’ tax returns. If you need help with something more complicated like a super fund that will look after your employees when they reach retirement age, you’ll need an accountant with an Australian Financial Services Licence.

They have experience in, and understanding of, your industry

An accountant doesn’t necessarily need to have a working knowledge of the unique tax compliance demands of your industry. But it’s definitely advantageous if they do. An accountant who has experience in, and understanding of, your industry can advise on what expenses can and cannot be written off. They can help you to accurately forecast profit and loss in light of industry changes. They are better equipped to understand the practical challenges that your business face, and help to make your money work harder for you.

They communicate clearly

As a small business owner, you’re a savvy autodidact with a diverse array of skills. But even the most intuitive and multi-talented of us can be bamboozled by industry jargon. And the financial sphere has more than its fair share of impenetrable esoteric lingo.

The right accountant will take the time to explain things to you clearly and concisely in plain English. They’ll keep you in the loop, and on the rare occasions where they’re not able to deal with you directly, they’ll have a network of trusted contacts with whom you can deal in their absence.

Transparent pricing

Of course, your accountant can’t be expected to work for free. And their pricing is an important factor in choosing the right accountant. That doesn’t necessarily mean that you should opt for the cheapest accountant that you can find. Instead, you should opt for an accountant who can demonstrate that they will provide exceptional value for their fee.

Furthermore, their pricing should be transparent with no hidden fees or dubiously worded charges. This is crucial in ensuring that you can factor the expense that they represent into your future profit and loss projections.

We can help

If you’re interested in finding out more about choosing an accountant, your tax liability, or any other aspect of your business finances then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments .

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Referrals Are Always a Good Place to Start

How to find the right accountant for your business

Elyse Lewin / Stone / Getty Images

You don’t necessarily have to be wealthy or own a business to benefit from hiring a tax accountant. It might be that preparing your own taxes is too stressful or confusing, or you might be facing a problem such as filing back taxes, paying off a tax debt, or fighting an IRS audit.

Finding the right accountant doesn’t have to be a challenge if you know how to go about it, but you’ll want to make sure you choose the right one for your needs.

Where to Look for a Tax Accountant

Some accountants are jacks-of-all-trades, while others specialize in certain areas. You don’t want to hire someone who has never handled an audit before if you’re being audited, but you probably don’t need an audit expert to explore tax-advantaged savings options for your child’s education.

Asking for referrals can be a good bet when it comes to finding someone who’s the right fit for what you need. Ask business owners, financial advisors, and attorneys, but don’t overlook family and friends, either. Pretty much everyone files taxes, so you should find a wealth of names out there.

Explain why you’re looking for an accountant and what you want the accountant to do for you. This will help people to steer you in the right direction.

Don’t hesitate to call the firm or the accountant to explore whether they have the expertise to handle your taxes if there’s anything unusual about your situation.

Beware of Red Flags

Be wary of an accountant who promises you a giant refund right from the start, before they’ve even analyzed your personal financial situation. The same goes for someone who says that you can deduct an excessive number of expenses before really talking to you.

No one can legally accept payment for preparing your taxes unless they have a preparer tax identification number (PTIN) from the IRS. The number should be entered on any tax return they file for you. Something might be amiss if you don’t see one.  

You can pull the plug if necessary. Don’t be afraid to shop around or to change accountants if you aren’t satisfied or comfortable with the service you’re receiving, even if you’re midway through the process and the tax deadline is looming. You can always request an extension of time to file your return by submitting IRS Form 4868 instead of your Form 1040, so you’ll have more time to find the right professional.

Those Retail Franchises

Retail tax franchises such as H&R Block, Jackson Hewitt, and Liberty Tax Service offer competent help if you just want to file a relatively straightforward tax return. Sometimes you can even find certified public accountants (CPAs) and enrolled agents (EAs) working in these offices.

Ask if you can meet with a CPA, an EA, or a senior tax preparer if you decide to use one of these services. You’ll usually pay the same price, but you’ll get to work with a more seasoned professional.

Types of Tax Professionals: Enrolled Agents

EAs are the elite, at least as far as IRS credentials are concerned. They’ve passed rigorous testing and background checks administered by the IRS. The testing involves three parts.  

Some EAs are approved without testing because they’ve actually worked for the IRS, but all have to complete continuing education requirements every three years.

Enrolled agents often specialize in certain tax areas, and they’re best for dealing with complex tax situations. They can represent you before the IRS if you’re faced with an audit or collection actions.

Certified Public Accountants

CPAs have passed the rigorous Uniform CPA Examination, and they’re licensed by the board of accountancy in the state where they work. They have accounting degrees from a university or college, and continuing licensing requirements involve meeting certain character and experience thresholds.

CPAs often specialize in areas specific to accounting. Some specialize in tax accounting, but not all CPAs handle tax issues. A CPA can also represent you before the IRS if you’re dealing with an audit or collections.

Tax Attorneys

Tax attorneys are lawyers who specialize in tax law, and they’re licensed by state courts and state bar associations. They often have master of law degrees in taxation, in addition to the required juris doctor degrees.

Attorneys are best at complex legal matters such as preparing estate tax returns or taking your case before the U.S. Tax Court. They’re also subject to continuing education requirements.  

Yes, You Do Need to Interview

You don’t want commit your personal business to anyone you haven’t met, so arrange to sit down the professional to discuss your situation and to ask some questions before your first official visit, even if you have to do it over the phone. Request references, just as you would from anyone you’re thinking of hiring—and reach out to those references to corroborate them.

Keep in mind that not everyone will feel comfortable talking to you, and keep it simple. Ask basic questions like, “Are you pleased with their services?” or “Did you ever have a problem with them?” The answers to these questions can tell you a lot, especially if you stop talking after you ask and let the other individual state whatever comes to their mind.

Questions to Ask

Asking the right questions can help ensure that you find someone who’s experienced and trustworthy. Some areas to explore include:

  • What licenses or designations do you have?
  • How long have you been in the tax business?
  • What tax issues do you specialize in?
  • Do you outsource any of your work, or do you and/or your staff perform all work personally?
  • Approximately how long will it take you to finish my tax return?
  • What are your fees? Are they negotiable? Can I have that in writing?
  • What is your privacy policy?
  • Do you believe that I’m paying too much, too little, or just the right amount of tax?

The law requires that accountants provide written statements regarding their privacy policies to all clients. Ask for a copy if you’re not offered one.  

Some Final Precautions

Perform a quick background check after your initial interview. You might even search for the professional’s name in social media. Find out what’s said on their own site, and what others have said about them.

Contact your state’s board of accountancy to check the status of a CPA’s license or to find out whether any disciplinary action has ever been taken against the accountant. You can ask the IRS Office of Professional Responsibility if an EA has ever been censured or subjected to other disciplinary action. You might also want to check with your local chamber of commerce.

And remember that you, not the accountant, are ultimately responsible for the accuracy of the information included on your tax return.

How to find the right accountant for your business

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How to find the right accountant for your business

A lot of questions, to be sure. But where do you start?

Below is a checklist of what to consider when looking for the right accountancy services:

  • Qualifications?
  • Do they have industry experience?
  • Fee structure
  • Is the size of the accounting firm convenient for you?
  • Are they in the right location?

Choosing the right accountant can be a very daunting challenge. Whether you’re a sole trader, limited company or multi-national company, it is likely that you will need the services of an accountant to prepare your end-of-year financial statements and tax accounts.

As a business owner, it’s important to choose an accountant that acts not only as a bookkeeper, auditor or tax advisor but also as a trusted financial advisor. The idea is that they can advise you on business risks and manage your finances effectively. The accountant will have access to your financial information, so you need to be able to trust your accountant.

Qualifications?

Anyone could set up their own business and call themselves an accountant. You can wake up in the morning and decide “I’ll be an accountant today”. It is in your best interests to work with a qualified accountant. Taking a gamble with an unqualified accountant is taking a gamble with your finances and the future of your business.

Accountants can only become qualified through one of the following UK bodies:

  • Association of Chartered Certified Accountants (ACCA)
  • Chartered Institute of Management Accountants (CIMA)
  • Institute of Chartered Accountants in England and Wales (ICAEW)
  • Institute of Chartered Accountants in Scotland(ICAS)

Once you approach an accountant, you must find out if they are a member of one of the above institutions – you request for proof of membership. Alternatively, you can check an accountant’s membership of these institutions and their qualifications directly with the relevant organisation.

Industry experience?

Accounting is a general field. In addition to certifications, you should look for accountants with expertise in your industry sector or in a similar industry. Some accounting firms may have experience in non-governmental organisations (NGO’s), recruitment or manufacturing businesses.

Accountants don’t offer just basic bookkeeping and auditing services; they also provide expert insights. An accountant with experience in your sector should fully comprehend the issues and challenges faced and could provide invaluable advice when needed.

Fee structure

How much does the accountant charge? For some businesses, this will be the main choice factor. Look for accountants that allow for fixed monthly fees, instead of supplying one lump sum bill at the end of the year. There’s no doubt that a fixed fee for accountancy services avoids any nasty surprises when the invoice lands on your desk.

Most businesses expect a reasonable charge for a good accountancy service during the financial year. The accountant may not feel inclined to offer additional support if they are making a loss by preparing your accounts. Remember, accountants can save you money and are more likely to do so if you have a good working partnership.

Size of accounting firm

It’s advisable to speak to an accountant that is similar in size to your business. For most start-ups, a small accounting firm is often a more attractive option than a large multi-national accounting business – large corporations feel more comfortable employing a large, name-brand accounting firm.

Location

Most people have internet access 24/7 so this might not be very important for your business. This applies particularly to businesses that prefer to meet their accountant. A locally-based accountant is usually more approachable as they should be more amicable to visiting you at your premises – after all, they are working for you. They can set up accounting or bookkeeping software on your PC.

Whilst the accounting industry is regulated by independent institutions, this is no guarantee that all accountants will be suitable for your business. Even if you find an accountant that ticks all the boxes in the checklist above, this is no guarantee that their services will be tailored to your business’ needs.

It’s advisable to speak to a commercial finance broker, as they’ve established relationships with a strong network of accountancy firms across the UK. The stand-out factors of the accountants they work with is that they provide a proactive service, are established, qualified accountants with excellent track records who work with your business 365 days a year…and not just at year’s end.