For many small businesses, finding an accountant is both crucial and a bit daunting. It seems, at least from afar, that accountants are pretty much all the same and yet most small business owners know in their heart of hearts that is not the case.
While selecting an accountant can be a vexing process, especially if you are a new business startup, it can be made much simpler if you approach it systematically and ask the right questions.
So to help you find the right accountant for you and your business, here are the 15 questions you should ask before you hire an accountant;
Work out what you want from an accountant
Before you talk to any prospective accountants, it’s important that you spend some time determining exactly what your accounting needs are.
Do you, for instance, need an accountant who is a specialist of some sort? Is your company one with international reach? Are you obliged to provide financial statements to a third party? Do you want an accountant simply to produce your annual accounts, or do you want regular management accounts too?
Once you have the answers to these types of questions, you can arrange for prospective accounting firms to come in for a chat and to answer these questions;
1. How long have you been in business?
A great accountant can make the difference between your company flourishing and just surviving. You’ll want an accountant who has a record of being there for small businesses and understands the unique challenges they face.
2. Do you have any references?
No references, no deal. It’s really that simple. You need to hear from other companies (and in particular, other companies similar to yours) that the accounting firm you’re considering can live up to their marketing.
If an accounting firm can’t or won’t provide references, your conversation with them should be a short one.
3. How do you typically communicate with your clients?
You need to be clear up front what form your communication with the accountant will take. Will there be regular face to face meetings or will everything be handled electronically, including the sending of financial documents and other relevant information?
4. Will my account be handled by a single person?
When it comes to the relationship between your small business and the accounting firm, nothing is more important to the formation of trust than knowing your account will be handled by a single person.
A good accountancy firm should understand this and will never subject your business to the accounting carousel.
5. Can you give me your thoughts on a certain deduction?
Do a bit of research and come up with a question to ask regarding a deduction relevant to your particular business or industry.
If the accountant you’re interviewing stumbles over the answer, it may be a red flag indicating they’re not the best match for you.
6. Can you provide feedback on my current accounting system?
Your current method of financial recording and reporting may not be the most effective one for your business. Ask your prospective accountant if they’d be willing to examine the way you currently do things and provide you tips on how to do it better.
7. What steps will you take to prepare me for tax season?
Avoiding any year-end crush should be a priority for your next accountant. They should be willing to assist you throughout the year in gathering accounting documents you’ll need at tax time and be able to provide you with information when new tax laws are enacted that could impact your business.
8. How will you improve my company’s bottom line?
The job of your accountant is to use all legal means to minimize your tax exposure. You should have provided the prospective accountant an overview of your financial situation and, if they studied what you provided, they should have formulated some basic ideas with regards to how you can hold onto more of your money.
9. How do you calculate your fees?
Some accountants charge by the hour. Others operate on a fixed-fee basis. Still others practice a value billing system.
You need to be absolutely clear before selecting an accountant for your business on how their fees are calculated.
10. How do you keep up to date?
While you certainly want an accountant that is grounded in the fundamentals, you also want one that has an eye open for new ideas.
What does your prospective accountant do to stay up on current trends and developments in their field?
11. What challenges particular to my industry concern you most?
This question is intended to determine how proactive the firm is in analysing current and potential risks. If they’re not aware of what’s going on at the heart of your industry they could be caught out by developments.
12. Which, if any, accounting programs or systems do they recommend?
Accounting programs can aid in mitigating some of the drudgery of record keeping, but you’ll want to be sure any systems you use are familiar to the accounting firm. They may have their own recommendations.
13. Do you foresee any conflicts of interest?
Hiring an accountant that has special knowledge of your sector is certainly something you’ll want to do. On the other hand you might not want to hire the same accounting firm that’s currently doing the books for your most rabid competitor.
14. Why should I hire you as my accountant?
You’ll want to hear a spirited and logical answer to this question, and not simply receive a shrug of the shoulders. If the prospective accountant can’t make a solid argument for why you should hire them – you probably shouldn’t.
15. Does the accountant speak your language?
Finally, this question is one to ask yourself. If you are not a whizz when it comes to financial lingo, your accountant needs to understand this and be able to communicate with you in a clear and concise manner. The accountant should not be the only one who understands where your company stands financially.
You can use these questions as a starting point for assessing the suitability of potential accountants. Consistent questioning will help you to spot trends and differences in the answers, giving you a firm basis to make your decision on.
You’re likely to be working with your accountant for many years, so it’s well worth spending a little time and effort to make sure you hire the one that best matches your needs.
About the author
This guide has been written for ByteStart by Greg Atkinson, a professional accountant with his family firm, Atkinsons Chartered Accountants in Brighton. With a proud history of 50 years, Atkinsons specialise in helping small businesses with all of their accounting needs, focusing especially on cloud-based solutions.
Business accounts – Further resources
For more tips and help on dealing with your business accounts, try these other ByteStart guides;
- How to choose the best online accounting software for your business
- How to choose an accountant for your small business
- Book-keeping basics every new business owner must know
- How switching from spreadsheets to cloud accounting can help small business owners
- Why you need a cash flow forecast and how to produce one for your business
- Cashflow Forecasting – top tips to produce a better cash flow forecast
More from ByteStart
ByteStart is packed with lots of help and great advice on all aspects of running your own business. Try some of our most popular guides and articles for starters;
- Sole trader tax – a guide for start-ups and the newly self employed
- 10 ways small business owners can pay less tax
- ByteStart’s Guide to the main business taxes
- Corporation Tax – How to reduce your bill
- Capital Allowances – A review of the various schemes businesses can use to cut their tax bills
- How setting up a salary sacrifice scheme can reward staff and cut your tax bill
Funding your business
- How to maximise your chances of securing a small business loan
- A Guide to ‘Alternative Finance’ – the new funding options for startups and small businesses
- Finding finance for your new business – funding advice for start-ups
- How peer-to-peer lending offers businesses a new funding option
- What to do when the bank says “NO”!
Going for growth
- Developing your startup’s greatest asset – YOU
- How finding a great mentor could help you to grow, and your business to flourish
- The 3 issues you’ll need to overcome if you want your start-up to reach £1m turnover
- How reverse mentorship can help drive fresh ideas, develop staff and help your business succeed
- How to avoid self-destruction and achieve your business goals
Promoting your business
- How to create business cards that make a big impression
- 7 Mistakes you could be making with your website
- Making your small business a BIG hit online – A Digital marketing guide for small business owners
- 21 killer ideas to get free publicity for your small business
- 10 Top tips for small businesses starting out with social media