3 Steps To Finding The Right Accountant For Your Business
Dan Levenson August 06, 2015
Business owner responsibilities include choosing an accountant when the business’s finances are in need of expert help. Sometimes you just want to improve the financial function of your business overall. Or perhaps your accounting software isn’t providing the type of data you need to grow your business.
No matter what the reason is for needing an accountant, you’ll want to take the right steps to ensure you hire the best one for your business. It is a critical decision, since you’re trusting the new accountant with the financial health of your business.
Here are 3 steps that will set you in the right direction.
1. Choose the Type of Accountant
The first step is choosing the type of accountant you want to hire. The proper accountant can help a business with not only tax returns, but with longer term tax planning, business planning, networking, and even personal tax planning.
Before you can find the proper accountant, you need to determine if you need an inside (in-house) accountant or an outside one (firm).
Small business owner responsibilities increase when there is a growth in revenue and transactions become more complicated. An accountant is needed to take care of all the increasing financial issues. Since an outside accountant’s fee grows with the size of the business, you may see some cost savings by bringing some of the work in-house.
An inside accountant’s duties usually include:
- General ledger/chart of account maintenance
- Responsibility for daily transactions
- Payroll and fixed asset accounting
- Financial statement preparation and analysis
- Cost accounting and variance analysis
- Cash management, such as bank reconciliations
An accounting firm will offer an hourly rate schedule. There may be different rates for different accounting functions depending on the level of complexity and who in the accountant’s firm is actually performing the tasks.
An accounting firm usually handles the following accounting functions:
- Analysis or problem-solving advice
- Tax return preparation
- Preparing financial statements
2. Decide What Key Qualifications Are Needed
The process of hiring an accountant can include choosing one with key qualifications that are specific to your company’s needs. An accountant mainly handles financial statements, analysis, and bookkeeping, but there are additional factors to consider.
A Certified Public Accountant (CPA) has an undergraduate degree, has taken the exam, and has met the experience requirements for state certification.
In addition to a CPA, a Certified Management Accountant (CMA) is trained to meet the demands of today’s accounting requirements in addition to participating on the company’s management team.
Young, growing companies in particular want an accountant who can help them manage financial business performance and have responsibility for the internal control function. A CMA is preferred in this instance.
The array of accountants and firms to choose from can be daunting—from sole practitioners to national, marquis firms. Some businesses feel more comfortable employing a large, name-brand firm.
Most importantly, you must decide what makes you comfortable as a business leader. You may feel more at ease with face time with a partner in a smaller firm.
Your decision on what qualifications to seek in an accountant must also take into consideration what services your business needs from an accountant. Maybe you only seek a firm to prepare your tax return and compile end-of-year financial statements.
But if you also want tax and financial planning advice, or retirement planning advice, you may need to seek someone with those particular qualifications or background.
3. Conduct Reference Checks and Interviews
Now that you have chosen the type of accountant you need and with certain qualifications, you can begin your search. Once you have narrowed down the candidates, you can conduct reference checks and interviews.
Small businesses cannot really afford to make a hiring mistake—especially when it comes to accountants. The accountant will have access to the company’s books, records, and other proprietary information.
Thus, conducting reference checks is very important during the hiring process. As a business owner, you must perform due diligence before making a decision that will greatly affect your company.
It is also imperative that you take the time to interview the individual candidates or firms. Check candidates in depth to see if they have experience in your industry, your size of company, and software sophistication.
Choosing an inside or outside accountant is a crucial part in your business owner responsibilities. You want to strengthen your business’s financial functions, improve its management reporting, and position it for growth. Therefore, taking the right steps to finding the right accountant for your business is a mountain worth climbing!