A good accountant can save your business barrels of money and put your financial house in order. A bad accountant can leave you scratching your head, wondering why you paid someone to manage your money when you could have done it yourself. Since your accountant may be involved in several key aspects of your business and as well may be privy to sensitive business or customer information, it almost goes without saying that you should invest some time finding the right person for the job.
Below is the Frugal Entrepreneur’s guide finding a good small business accountant:
What Does an Accountant or CPA Do for a Small Business?
Before discussing the strategies for locating a suitable person, you should be aware of what you are looking for in the first place. Accountants and CPA’s (Certified Public Accountants) offer a broad range of services that go beyond simple bookkeeping and financial reporting. For those tasks, a qualified bookkeeper would typically be more than adequate. What gives accountants and CPA’s more value (and thus a higher price tag) are other areas of input, such as investment advice, retirement planning, strategic planning, and tax return preparation.
How to Choose a Good Small Business Accountant
Once you are clear what the needs of your business are, you can then go about finding an accountant who serves your individual needs. But how can you sort through all the accountants and CPA’s in the phone book or advertising online and be able to separate the wheat from the chaff?
- Recommendations: Ask your friends who seem financially sound for referrals. Ask them specific questions about the accountant’s bedside manner. Does the accountant answer phone calls? Listen to each customer’s needs? Or does he/she apply a boilerplate approach, simply punching numbers into a pre-existing computer program without creativity? You, too, can buy a tax computer program, so paying a number-puncher is a waste of money. You need someone who knows the ins and outs of tax clauses, and will apply them to recoup the maximum possible tax return for you.
- Credentials: If the friend route yields no winners, try the yellow pages/online listings. Pursue only those with the letters, “CPA” following their names. The CPA (Certified Public Accountant) credential indicates extensive education and training and continual re-certification.
- Interview: There’s nothing like a first-hand opinion. As an educated customer, take the time to vet the person whom you are going to trust with your personal information. Choose two or three candidates, and contact them to request an interview. You can easily pass on those who don’t respond to your phone calls quickly and professionally. During the interview, the accountant should show interest in your financial goals. Watch for questions about your savings plans, retirement needs, and charity interests. If you are seeking an accountant for your business, look for someone who has knowledge about your area of work.
- Consider size and age: Of the firm, not the accountant. An older, more established firm has probably built a reputation that you can rely on. On the other hand, the company reputation is worthless if you are unimpressed with the accountant assigned to you.
- Assess the overall package: After you have collected the above information, compare the contenders. Zero in on the one who is pleasant and responsive. Your accountant should be able to answer all your questions clearly and thoroughly.