Hiring an accountant is a huge step for a small business. You work long hours every day and don’t have time to figure out the tax and regulatory requirements on your business. If you don’t pay the right taxes, fail an audit, or run out of cash halfway through the year, there’s a good chance your business won’t survive. But what do you look for when hiring an accountant?
Gerry Anderson, CMA, is the President of Logicon Solutions. Logicon Solutions is a business process and consulting firm that helps organizations leverage technology and data to reduce costs and improve decision making. Gerry gave me six tips on what to look for when hiring an accountant.
1. Understands the business and industry you are in.
Every accountant is different and has different specialties. They will generally have worked in one field for a while and will know the ins and outs of that field. Make sure you get an accountant who knows your field. If you own a pizza parlor, you don’t want to be getting advice from an expert in accounting for construction companies.
2. Understands the various tax codes your company needs to comply with.
Sadly, taxation is a HUGE part of owning a business. A skilled accountant will know and understand all the taxes you have to pay as well as all the ways you can take deductions, accruals, and tax benefits. Don’t forget, the state and city tax code changes depending on where you live. Make sure your accountant has practiced in your jurisdiction. A great accountant will even work with you on taxplanning so that you can strategically pay taxes. This means less money taken by the government and more money in your bank account.
3. Understands variance analysis and benchmarking.
You may think you’re doing well, but how is the competing laundromat around the corner doing? If you can’t compare your business to the industry and your peers, you’ll never know where you’re strong and they’re weak.
4. Has a very good network for you to connect into.
Your accountant knows more than just accounting. He or she will also know lawyers, marketers, and other people who could be fantastic assets to your business. A good accountant is a good connector.
5. Has a professional designation.
There are some great accountants out there who are not certified, but you need to make sure your accountant is certified. A board (like the AICPA or state boards) certified accountant is more likely to know what you need and is always a safer bet. A CPA will usually be able to fill all your needs, but people with more specialized certifications like CMA (Certified Management Accountant), CFM (Certified Financial Manager), or even a CFE (Certified Fraud Examiner) are sometimes needed for special problems or projects.
6. Has a good reference base.
The accountant you hire should have a long work history and lots of recommendations to go along with. They should be able to provide eight to ten references that you can pick any three to check on. Make sure you check them too. An accountant may look great on paper and may interview well too, but they may have a problem with getting clients information in a timely manner or been difficult to work with. You will want to know this.
If you find all six of these qualifications when hiring an accountant, you may have found a winner.
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