While every entrepreneur and business owner is willing to invest to become profitable, establishing a financially stable business should be your priority. To achieve this, you will require prudent and thought-out financial management and audit, meaning that hiring an accountant should be at the top of your to-do list.
How do you know whom to opt for, though? Choosing an accountant is a tricky decision, particularly if you are new to the world of business, but even larger enterprises can often have trouble acquiring the right person or company to meet their needs.
Therefore, to reach a judgment, you will need to conduct a significant amount of research, conversation, and deliberation. To help make the process easier for you, we have outlined the most critical steps to take when finding the right accountant for your business.
1. Ask for a Referral
Seeking a referral from someone you trust – preferably from a business owner who is operating in a similar sector to you – is an excellent first step towards hiring an accountant. Having another professional vouch for your potential hire can provide you with unique insight and peace of mind.
Request that the referral is someone reliable, knowledgeable in your industry or niche, and can offer more than just management of the numbers that you present them with. If you receive any recommendations, then you have potentially sidestepped a series of convoluted pitches and promises that may not have your best interests at heart.
Of course, if you adopt this approach, be sure that you trust the professional opinion of the referrer, and don't commit to any decision until you've grilled the accountant in question first. Even with the best of intentions, it's a simple reality that just because someone is the right accountant for a friend, it doesn't necessarily mean that they will be an ideal fit for you.
2. Choose a Certified or Chartered Accountant
When running your own business, acquiring the services of a certified or chartered accountant is highly recommended. Even for a small venture, you need assurance that your financial operations are being overseen by a regulated and competent professional. Your chosen accountant will be inspecting your company's financial records and advising you on your legal and tax obligations, so it needs to be someone you can trust.
Besides, when using a tax preparer with no professional training or certification, you are essentially relying on a software programme, as opposed to human skill and years of knowledge from working in the field and gaining in-depth experience. Further, many of the individuals who are employed seasonally within uncertified tax companies do not primarily work in the bookkeeping industry; therefore, the expertise that you want in someone working directly with your business' finances would be minimal or non-existent.
3. Look for Experience
If you are hiring a certified or chartered accountant, then typically they will have been working in accounting and bookkeeping for an extended time. Ideally what you want, though, is experience (and proof of said experience) working with businesses in the same industry as you. For instance, if you receive (or provide) payment using cryptocurrencies, are they comfortable in how to manage this? If you’re looking to diversify or expand, can they provide you with useful, in-depth projections? Do they know how to optimise your cash conversion cycle within your niche?
Your chosen accountant should be well aware of any potential issues that may arise with regards to your specific sector, what can and should be expected come tax season (and throughout the year), as well as be able to answer any enquiries that you may have regarding filing taxes and financial management for someone in your niche.
4. Clarify Turnaround Time
As well as asking how long it will take to complete the filing of your taxes themselves, a critical consideration should be the amount of time that it takes for them to respond to your potential questions and concerns throughout the financial year. Be sure to choose an accountant who can assure you beyond a reasonable doubt that they, or someone in their firm, will be able to reply to both email and phone enquiries promptly. This is particularly important during peak times when a large number of their clients could be reaching out to them (such as tax season).
Also, be sure to enquire as to what documents you will need to provide readily, both regularly as well as during tax season. This will help you to stay aware of what needs to be done on your end, as well as better understanding the responsibilities of the accountant that you choose.
5. Request a Cost Breakdown
One of the key questions that business owners often ask in this regard is: how much will it cost?
Upfront, request an itemisation of how your accountant will determine their fees so that you are completely clear on the levels of cost you will be faced with during busy financial periods. Be aware of what tasks are needed to be completed by the potential accountant – especially if you conduct cross-border business or operate a complex business structure – as well as if you need assistance with less complex tasks, such as budgeting your business.
Factors such as these could potentially have a significant impact on the cost of what your accountant will charge you, so ensure that you get a transparent and accurate estimate. In asking these cost-related questions, you can be sure that you will not be surprised upon receipt of your newly hired accountant's bill.
6. Check References
If everything looks good and it seems like you have identified the right accountant for your business, ask to see their references. This final step is a critical one, as it enables you to hire them with confidence and insight into how they operate.
If a potential hire does not feel right to you, or their references are not good, then don't be afraid to politely decline their services and continue to shop around. Choosing the right accountant is an important decision, so don't feel pressured into giving up the gig lightly, even if the accountant in question represents a reputable or well-known firm.
Choosing an accountant is not always an easy task. As such a significant decision, it's vital that you feel assured in their ability to manage your company's finances legally and responsibly, while still assisting you as a business owner to receive as high a tax return as possible.
Following the steps outlined above will better assure that you are able to achieve this and that you will be able to do so with confidence, too.
For your basic bookkeeping needs, don’t forget to take a look at our breakdown of the best accounting apps on the market, too.
What else should you look for when hiring a new accountant? Let us know your experiences in the comments below.