At some point, you are going to have to hire an accountant to handle the bookkeeping and other financial tasks for your small business. It might seem like an overwhelming undertaking but honestly, if you ask the right questions, you will find the perfect accountant. Here are five questions that I recommend asking your potential new accountant.
1. Do you have experience with businesses like mine?
An accountant that works with similar businesses as yours is likely to understand the complexities of your business and advise you better than an accountant that doesn't specialize in your area. For example, an accountant that works with wedding photographers would understand the seasonality of the business and be able to advise you on how to manage your cash flow throughout the year.
2. How long have you been practicing?
Accountants with experience are less likely to make errors than someone with less years practicing. Also, accountants that have been working for years have worked with so many more businesses and are able to advise you better to make financial decisions for your business. While hiring a new accountant is not necessarily a bad decision, you should just be aware that they could be getting some on the job training with your business' books.
3. Can I talk to a few of your current clients?
It's always a good idea to get references when you are hiring anyone for professional services -- especially an accountant. Of course, the accountant will likely only give you the contact information for clients that are happy with their services, but you will get a sense of the quality of their work, responsiveness and overall work ethic.
4. Are you a CPA?
Not all accountants are Certified Public Accountants and that is okay. Actually, business accountants that are not CPA's tend to understand the day to day operations of your business better and are more effective partners to helping you run your business effectively. If you are looking for an accountant to handle bookkeeping, budgeting and cash flow projections on a monthly basis, then an accountant is a great option. CPA's are definitely key for helping you determine your quarterly tax obligations and preparing your yearly income taxes. Unfortunately some CPAs will focus on only the tax implications to make business decisions and not what is actual best for operating your business on a day to day bases.
5. Do you have a yearly contract for services?
Some accountants may require you to sign a contract to have them handle your accounting for a year at a time. Other accountants might only work on a month to month basis. A yearly contract may save you money in the long run, but you should ask this question up front. If you aren't sure the relationship is going to fit for long term, then you may not want to sign a year long contract.
I hope this helps you in hiring your accountant and honestly, I hope you ask me these questions very soon! Please contact me if you would like to chat.
Written by Tom Barnhill, co-founder of Business by Barnhill