Finding and Interviewing an Accountant

When you’re looking to hire an accountant to handle your small business tax return, it’s important to meet with that person first to make sure it’s a good fit. We’ve compiled some useful tips below as well as things to think about beforehand and questions to ask during your initial meeting.

But first, a note about timing…

Timing isn’t absolutely everything, but the WORST time to be looking for an accountant is during tax season.  It can be very difficult to get tax professionals to call you back between the end of January and mid-April. So if at all possible - AVOID trying to find a new accountant during this time. We think the sweet spot is Summer or Fall.

And now, on to those questions to ask when you do get an appointment…

Interview Questions

What services do you offer?

If you need help with tax filing, then a tax preparer is the way to go.

Do NOT assume that a tax professional will offer anything other than what you hire them to do. If you hire someone to prepare your taxes, don’t assume that they will do anything else for you. Be explicit about what you want/expect so there are no misunderstandings. Here are some other services to consider asking about.

Tax advice

Accountants that provide assistance with tax-related issues usually can do so in two areas:

Tax compliance - Compliance refers to obeying the tax laws.

Tax planning - Planning refers to reducing your overall tax burden.

 Auditing

These services may be required by banks as a condition of a loan or they may be required for tax-exempt organizations that utilize government funding. There are many levels of auditing, ranging from simply preparing financial statements to an actual audit, where the accountant or other third party provides assurance that a company's financial information is accurate. The latter can be quite expensive.

 Additional services

Many small businesses pay their quarterly tax installments through their accountant.

Some small businesses run their payroll* and sales tax payments through their accountant.

*If your accountant is going to handle your payroll, ask if they’ll be making entries in your QuickBooks; and if so whether it will be via transactions or journal entries. Be aware that the journal entry method creates a lot of extra bookkeeping work because the entries generally won’t match to transactions coming through your bank feed. So this method could end up creating quite a bit of additional expense for you.

What are your Fees & Charges?

Ask about this upfront. Most accounting firms charge by the hour with fees ranging from $100 to $300. Many have a flat fee for tax preparation - based on your business entity type and whether you will be filing a personal tax return that includes your business (sole proprietors, single-member LLCs) or whether you will be filing a business tax return (multi-member LLCs, partnerships, corporations). Others work on a monthly retainer. Try to get an estimate of the total annual charges based on the services you have discussed.

Don't base your decision solely on cost, however, as an accountant who charges higher hourly rate is likely to be more experienced and able to work faster than a novice who charges less.

Who will I be working with?

This question is mission-critical. Be sure the people you are meeting are the same ones who will be handling your business. At many accounting firms, some partners handle sales and new business, then pass the actual account work on to others. It is not a joke that some of the big firms will farm your return out overseas. A smaller firm, where a partner or owner handles the bulk of the work, is often a better choice for small businesses looking for a long-term advisory relationship.

Once you’ve determined that you’re meeting with the person who will do the work for you… here are some questions to ask that person:

What’s your experience with small businesses?

Sorry to say so, but some accountants just don’t like working with small business owners. Small business owners often have a lot of questions and would prefer some hand-holding when it comes to business finances and business taxes. (Of course!) This just is not always in the wheel-house of someone who has chosen to spend their career crunching numbers. It just isn’t. Also, quite frankly, small businesses not only ask for more support but provide less money into a firm than medium and large businesses do. For these reasons, small businesses are not always the ideal client for accountants/accounting firms. As a result, they’re often not prioritized - leading to issues of responsiveness, etc. It is SO helpful to work with an accountant that specializes in small business (and actually likes working with small business owners).

What experience do you have with my industry?

Ideally, your accountant should have knowledge of your industry. Many accountants specialize in certain industries such as franchising, real estate, construction or exporting. Again, get referrals from others in your industry.

 How quickly will they respond to queries or requests?

Again, this is super important. This is the number one frustration we hear from small businesses about accountants. “They don’t call me back.”

Other:

  • What are your professional qualifications and licenses? (CPAs are distinguished from other accounting practitioners by strict licensing regulations.)

  • What value-add services do you offer? (Consider services that you may want in the future, such as audit support or CFO services.)

Pay attention to what the accountant asks you

 These are some of the questions your accountant should probably ask you:

  • What is your business and how does it make money?

  • What are your immediate plans for your business?

  • What level of service are you looking for?

  • To see your prior year’s tax returns

    • This should include those of your business if you file a separate return for it.

    • They would likely want to discuss some of the items on it and ask you about some of the tax strategies used.

Assess personality

Is the accountant's style compatible with yours? Do you like them? Do you jive?

It matters.

References

Ideally, you were referred to the accountant by a fellow small business owner that gave you a glowing reference.

Check Yelp, Google, and other review sites for reviews.

If you’re interviewing without having being referred, you can also ask the accountant for references. Just keep in mind that those are likely to be somewhat biased as most people refer the clients they know will say good things about them. If you do get references, you can call them to find out how satisfied they were with the accountant's services, fees and availability.

 

Written from experience with excerpts from:

https://www.entrepreneur.com/article/217784

http://mywifequitherjob.com/how-to-find-the-right-accountant-for-your-small-business/

https://www.sba.gov/blogs/how-find-accountant-who-can-help-your-small-business-over-long-haul

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