Questions to Ask Before Hiring an Accountant
When we started looking for an accountant for our business, we quickly realized how overwhelming the process can be. There are countless options, and choosing the right one is crucial for keeping your finances in order and making informed decisions. Since we aren’t experts in accounting, we did a lot of research to understand what to look for. We put together this guide to help other business owners navigate the process and make a confident decision.
Types of Financial Professionals
You (DIY Approach)
Many new business owners attempt to handle their own accounting to save money. While this may seem cost-effective at first, it can lead to costly mistakes. Tax laws change frequently, and keeping up with financial regulations is time-consuming. Plus, your time is valuable—what’s your hourly rate? If an accountant can complete the work faster and more accurately, the investment is well worth it.
Bookkeeper
A bookkeeper helps track income and expenses, manage payroll, and handle financial transactions. They often use accounting software like QuickBooks to keep financial records organized. While they provide valuable day-to-day financial management, they do not offer strategic tax planning or financial advice.
Accountant
An accountant goes beyond bookkeeping by preparing tax documents, creating financial reports, and analyzing business financials. They help with compliance, budgeting, and strategic financial planning but may not be able to represent you before the IRS.
Certified Public Accountant (CPA)
A CPA has undergone extensive education and certification, making them the most qualified financial professional for businesses. They provide comprehensive accounting services, tax preparation, and financial strategy development. Additionally, they are licensed to represent you before the IRS, and may offer bookkeeping services in-house, making them a one-stop solution.
Key Questions to Ask When Hiring an Accountant
1. Are You a Certified Public Accountant (CPA)?
While anyone can claim to be an accountant, a CPA has met rigorous educational and licensing requirements. A CPA can provide expert financial advice, assist with tax preparation, and even represent you before the IRS. Although bookkeepers and general accountants can handle financial records, hiring a CPA ensures access to a higher level of expertise.
2. Do You Work with Small Businesses and Startups?
The financial needs of a small business differ greatly from those of a large corporation. An accountant with experience in small businesses will understand common challenges and provide relevant solutions. Ask potential accountants how many of their clients are small businesses and whether they have experience in your industry.
3. How Accessible Are You?
Your accountant should be available when you need them, whether it’s for a quick question or a detailed financial review. Consider asking:
- How quickly do you respond to emails or phone calls?
- Will I be working directly with you or someone on your team?
- Can we schedule regular financial check-ins?
4. What Are Your Fees and Billing Structure?
Reliable accountants assess your business needs before quoting a price. Look for an accountant who offers a clear and transparent fee structure. Be cautious of accountants who provide instant quotes without understanding your business, as this can indicate hidden costs or generic, one-size-fits-all services.
5. Can You Help with Bookkeeping or QuickBooks Training?
Many businesses use accounting software like QuickBooks for financial tracking. If you manage your own books, you may need an accountant who can train you in best practices. Some accountants also offer in-house bookkeeping services, which could be a convenient option depending on your business model.
6. How Do You Stay Up to Date with Tax Laws?
Tax regulations change frequently, and staying informed is crucial. CPAs are required to earn Continuing Professional Education (CPE) credits, but a great accountant will go beyond the minimum requirements. Ask how they keep up with changes in tax law and financial best practices to ensure you receive the best advice possible.
7. For Startups: What Business Structure Is Right for Me?
Choosing between an LLC, S-Corp, or another business structure has significant tax and financial implications. A knowledgeable accountant will analyze your situation and provide recommendations based on your specific needs rather than automatically steering you toward one structure.
Final Thoughts
We aren’t financial experts, but through our research, we learned that hiring the right accountant can make a big difference in our business’s success. An accountant should be more than just a financial consultant—they should be a strategic partner invested in your business’s growth. By understanding your options and asking the right questions, you can find an accountant who aligns with your needs and helps you achieve financial stability. Good luck!
