Having a trusted and capable accounting professional in your corner is rudimentary to the success and growth of your business. Ask yourself the following questions, to make sure you make the best choice.
What do I need help with?
Do you need financial guidance on how to run and grow your business? Are your books a mess? Do you need assistance with managing bills and payroll? Do you need tax advice?
Accounting professionals can help you in all financial aspects of your business: they can advise you on growth plans, expansion to new locations and new product lines, and help you navigate through challenging times.
Before you even start looking for an accounting professional, you should know the difference between the main types of pros and what they can do for you.
Accountants can help you with your financial statements, tax filings and provide you with financial guidance on issues like cash-flow management. Bookkeepers can help you with recording, categorizing and reconciling your financial records.
A CPA (or a Certified Public Accountant) is an accountant certified by a state board of accountancy. CPAs have to fulfill certain experience and educational requirements and pass a certification exam. They are allowed to perform certain services that an uncertified accountant may not, such as preparing audited financial statements or representing their clients in discussions with the IRS.
So when meeting with a prospective accountant for your business, discuss your needs and mutual expectations, and ask them if and how they can help you, to ensure that the services they provide are in line with your business’s needs.
What experience do they have?
To be more specific, what experience do they have with businesses like yours and the industry you operate in?
Businesses may differ from one another in their financial operations, pain points, and business needs. For example, the way to calculate the cost of goods sold (COGS) varies between construction, food & beverage, and dental accounting.
That is why you may prefer an accounting professional who has an intimate understanding of your business and industry.
What do their clients have to say about them?
Do a little research, Google them, and go online for reviews. Many accountants & bookkeepers have testimonials on their website. It’s also perfectly fine to ask a prospective accountant to speak with one of their clients. The way they react to the request is in itself a possible indicator of whether or not you can trust them with your business.
It’s important to note that some accountants prefer not to provide references, for valid reasons (for example - they don't want to bother their existing clients). Therefore, the focus here should be the manner in which they react to your request, rather than the answer itself.
If you manage to talk to one of their clients, don’t settle on just asking them if they’re content. Use this opportunity to ask them specific questions that can give you real insights: How long have they been working with them? What type of services do they perform? Ask about their availability, the way they communicate, and the added value they bring with them.
What credentials and certifications do they have?
For an individual to be an accountant, they generally need an accounting bachelor’s degree. As mentioned above, CPAs are accountants that undergo a certification process. Meaning, all CPAs are accountants, but not all accountants are CPAs. As a matter of fact, 47% out of 1.4 Million accountants in the U.S. in 2020, were CPAs.
Bookkeepers don’t require certification to practice. However, there are formal institutions such as the AIPB and NACPB that offer accreditation.
Another credential you should consider asking about is a QuickBooks ProAdvisor certification. QuickBooks offers a certification program for accounting professionals. A ProAdvisor certification means, among other things, that the accountant or bookkeeper took the time to gain proficiency in the accounting software they use.
It should be noted that other accounting software, such as Xero, also offer certification programs.
What tech solutions are they using?
An accountant’s choice of tech stack can also shed light on their professional point of view: accountants who invest time in researching and choosing the best tech stack, demonstrate their aspiration to provide the best services for their clients and the ability to learn and grow with technology.
They also show that efficiency is paramount to them, as well as ensuring they have time to focus on the real value they bring as professionals - providing you with financial analysis and insights, helping you with financial challenges, cash flow planning and business growth.
Do they have a detailed engagement letter?
An engagement letter is a document containing all the details of engagement between the accountant and their clients - including the services they provide, the “who-does-what” responsibilities in the relationship, pricing and billing, the document handling process, and more.
Having a detailed and coherent engagement letter, customized for each client’s personal service needs, demonstrates that the accountant prioritizes clarity, certainty, and accountability with their clients.
Is their pricing right for you?
Accountants’ pricing methods and service packages may vary drastically. When choosing an accountant, do your market research. You can use this Intuit rate survey to get a general idea of how much you should be paying for the services.
Finally - how do you feel about them?
Nothing can replace a personal and unmediated impression. An accountant can be perfect on paper, but unsuitable for you and your business on a personal level.
The interrelations between accountants and clients require a high degree of trust and reliance, and therefore you should feel confident that your business, for which you toiled so hard, is in the hands of an accountant who - for the lack of a better term - gets you.
*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.