Hiring An Accountant: What You Need To Ask

We’ve gone from the most wonderful time of the year (the holidays) to the most stressful time of the year (tax season). If you’re a business owner and your books are less than organized, you know exactly what I mean.

As tax deadline looms, I get a lot of inquiries from businesses who need help cleaning up their books. They didn’t do a good job of categorizing expenses or tracking subscriptions over the last 12 months and now they’re worried about what that tax bill is going to look like.

While I don’t do taxes (I recommend a CPA that has experience in your industry), I do work with accountants on a regular basis. Some are incredibly organized and are a great resource for me as we help our mutual clients make the best possible financial decisions. Others, however, simply do what the client asks rather than what’s in their best interests.

If you’re looking for an accountant in this tax season, interview them as you would any new hire in your business. Here’s a list of some of the questions you should add to your list.

• What experience do you have in my industry? A good CPA will know the level of detail you need in your income and expenditures for your particular business. This includes identifying and tracking revenue streams, expenses for specific products and services in your industry.
• Have you ever worked with a business like mine before? There’s a big difference in expenses for a small brick and mortar retail store vs. a home-based service business vs. a large industrial shop. For example, a $12k ink or office supply expense is a no-brainer for a large print shop, but is clearly an error for a small retail store. A good CPA will recognize things like this and ask you about them.
• Will you work with my bookkeeper? Most CPAs don’t do bookkeeping work and rely on professional bookkeepers to keep up your books. However, some CPA firms do have bookkeepers on their team. With that being said, if you already have a bookkeeper be sure and let your CPA know. In addition, you’ll want to ask if your CPA will work with your bookkeeper and recommend any changes or adjustments needed to your bookkeeping records. Most CPAs will be happy to be work with your bookkeeper. And if they know you have a bookkeeper on your team, they will most likely provide you with adjusting journal entries at year-end.
• Can you explain your processes and your expectations of me? Your CPA needs needs to get to know you and understand your business–in essence how you make and spend money. Each CPA has their own way of getting data from you: a questionnaire that you fill out, access to your accounting software, financial statements and a copy of your general ledger report. It’s important to have an actual conversation with your CPA as well. Make sure you know up-front how you’ll be expected to share that information and if you are required to complete a questionnaire or upload your data securely to a program they use.
• Can you provide references? Everyone needs to start out somewhere, even accountants. But if a CPA can’t provide any client references, consider that a red flag. Get a few references and follow up with them. Be sure and check if they have experience in with your industry and how they are about responding to questions you might have.
• Do you provide tax planning? I think this is self-explanatory, but it’s important to ask the CPA how they will be able to help you lessen your tax burden. This is especially important if your business is on the upswing, adding team members, opening a new location or if you’re transitioning from side hustle to full time. You will want a CPA on your team that can advise you of what to do or not do to lessen the amount you’ll owe at tax time, and thus help you plan throughout the year.

Doing your own taxes as a business owner is like … as a rule of thumb just don’t do it. It’s not your expertise and laws and rules shift so quickly that it’s impossible to stay up-to-date. Instead, find a qualified CPA who has your best interests in mind–and who has experience in your particular industry. And one that can help you with tax planning too!