How to Choose an Accountant: 10 Things to Look For

If you’re a small business owner and realize that you need to outsource your accounting, the next step is to find an accountant; but what should you look for? Although there are plenty of options, it’s important to choose your accountant wisely because that individual will be an important asset to your business and help it grow. Conversely, a bad accountant could impact your business financially and even get you into legal trouble.

Two things you’ll want to think about as you start the process are: 1) what accounting tasks you need help with and 2) whether you need help on a long-term basis or on a one-time basis. Both of these considerations will affect who you choose. With this in mind, here are 10 things to look for in an accountant:

1. Specific expertise relevant to your business

   Depending on what your business is, an accountant who has experience in your industry and understands your specific needs is extremely important in finding someone who is not just a good accountant but also a good fit for your business. In fact, The Daily MBA lists relevant industry experience as one of the top five criteria you should consider when you’re looking for an accountant and says that, “Choosing an accountant is equivalent to hiring an expert on your team.” For example, if you are an online business owner, “the ideal accountant would be is one who is working with or has had an experience working with other e-commerce businesses.” These accountants will understand the various nuances of your business and can save your business time and money, especially when it comes to taxes. Government contracting is a very unique industry and knowledge and experience of regulations, pricing, and government auditors is vital.

2. Clarity of Needs

   It is important to be clear of your needs and requirements. Do you need the support of a CFO, senior accountant, or bookkeeper? The challenge is that as a small business the answer may be “all of the above.” But, you don’t want to pay CFO’s rates to get bookkeeping accomplished. If this is the case, you would want to seek a solution that provides a matrix of talent, experience, and billing rates.

3. Certifications

   You probably want a certified accountant – a CPA – for several reasons. In general, CPAs are more familiar with tax laws; but more specifically, CPAs are licensed by the state and required to stay up-to-date with tax and other accounting disciplines to maintain their certification. SmallBusiness Trends points out that “the biggest reason to use a CPA for your business taxes is that a CPA is eligible to represent you before the IRS in an audit, while an accountant is not.” Particularly as your business grows and your finances become more complicated – especially related to taxes and audits – you’ll find you really need a CPA.

   Some accounting tasks, such as bookkeeping, tax preparation, and general financial management don’t need a certification. If an accountant is not certified, they should nevertheless have the credentials to show they have experience in the areas you need help with. Small Business Trends suggests using a good portal like Phlexable to check the credentials for you.

4. Location

   Do you need your accountant to be where you are or can you work with someone in a remote location using cloud-based services? You’ll have to determine whether the location of your accountant matters to you or not. Your options for who you choose will expand if you’re comfortable using cloud-based accounting services; but if it’s important for you to have your accountant with you, you’ll be limited by location. Keep in mind that if you find someone outside your local area, you’ll need to make sure they’re experts in the tax laws that affect you and your business.

5. Client base

   Check the client base of a prospective accountant. Are the clients similar in size and scope to your business? Has the accountant been with certain clients as they grew in size? That can give you a sense of whether the accountant can adjust to a business that grows over time. Remember, too, that an established firm with a large client base may not meet your specific needs. As Inc. points out, “Some businesses feel more comfortable employing a large, name-brand firm. But while one of the Big Four firms might seem attractive, you have to ask yourself whether a small firm will be overlooked. You also have to know what makes you comfortable as a business leader. You may feel more at ease with face time with a partner in a smaller firm.”

6. Length of time as an accountant

   The longer someone has been working as an accountant, the more experience they likely have and the greater chance they will know the tricks of the trade to be able to do the job more effectively.

7. Type of software accountant uses

   Finding an accountant who knows and/or uses the same software you use, is important to prevent issues over sharing data. Exporting and importing data, even if it’s possible, can be time-consuming and lead to mistakes. You also need to be careful about the security of highly sensitive financial information as you send the data back and forth. One common solution in today’s world is utilization of cloud hosting services. Here, both you and your accountant would have access to your accounting data 24/7.

8. Recommendations and references

   The accountant you’re considering should be able to provide good recommendations and references that you can check. You may have found someone through your own network (your local chamber of commerce or business association, etc.), in which case they already come with at least one recommendation. Make sure your referrals come from a professional network or someone you trust. Once you find someone, it’s always important to verify credentials and see how well they worked with their clients, particularly clients that have a business that’s similar in size and complexity as yours.

9. Initiative

   The best accountants are proactive and go beyond the basic accounting tasks you’ve asked of them. They not only manage your finances and complete your taxes, but they also give you recommendations on how to save money or do things more efficiently. They make the effort to learn about what your company specifically does. Forbes explains that “The right CPA goes beyond just handling your case by the numbers; he or she will be able to answer questions and thoughtfully counsel you on mindful financial planning across all areas of your business.” This is what separates a good accountant from a great accountant.

10. Good Rapport

    This is an intangible quality that doesn’t come with a certification or any level of experience, but it speaks to how well you can work with a particular individual. Just like anyone you employ, you need to be able to get along and ideally, you should enjoy working with that person. With all the things that need to be worked out (i.e., how to communicate, what the work arrangements are) as well as the level of trust you need to have in that person (considering they handle your finances), having a strong rapport with your accountant is critical.

At some point in your business, an accountant will be a must. Taxes are not something you can afford to mess with, and accounting is way too time-consuming for business owners. When it comes to finding a good accountant, the options are numerous, ranging from large accounting firms to local mom and pop accountants. It certainly helps to know what to look for; and the key is to choose one you can trust with your finances, one who suits your needs as a government contractor, and one who has all the necessary experience, credentials and certifications to help your business succeed.

KDuncan & Company specializes in assisting small and mid-size government contractors. If you need accounting support, contact us.

KDuncan & Company is dedicated to providing knowledge and support for small government contractors about concerns regarding government contracting. For questions on areas such as as cost proposals, accounting systems, DCAA compliance, and incurred cost audits, reach out to KDuncan & Company.