Running an SMB or a startup has its fair share of challenges. While you might be able to deal with risk management, team organization, and task delegation, handling the finances might be tricky. Although entrepreneurs and business owners need to have some basic money management skills, their knowledge in this field isn’t sophisticated enough.
For example, 82% of small businesses go under because of poor cash flow management according to a U.S. Bank study. This gloomy stat shouldn’t scare or discourage you from starting your own business though. It should only point to the importance of hiring a reliable accountant. Here’s a list of questions to ask before you pick the right person for the job.
What Services Do You Provide?
An accountant or an agency can provide a wide variety of services. You need to figure out whether you need them just for monthly bookkeeping services, taking care of payroll and doing your taxes, or you, for example, want someone who can represent you in case of an IRS audit. Although your business might never be audited, it’s of vital importance to be backed up by a certified accountant who has had some previous experience with the IRS and who knows the procedure.
How Much Do You Charge?
Don’t refrain from asking this question right away, because an accountant is a professional who takes money very seriously, and since they will be in charge of managing your finances, there’s nothing more natural than picking this as a conversation starter. Some accountants charge per hour, while some offer a fixed fee. When it comes to deciding on the payment plan, if you’re looking for more than just doing your taxes, it’s a better idea to opt for a flat rate. You can also request a quote estimate by providing an accountant candidate with your last year’s tax returns. Generally speaking, this isn’t the moment to be stingy, because an experienced accountant can save you a lot of money, so think of it as a good investment.
Will You Be Doing the Work?
This question might seem absurd, but if we bear in mind that some accounting agencies outsource their services, it starts making sense. You don’t want a randomly selected person to manage your financial affairs, no matter how skilled they are. The point is to ask exactly who will be responsible for your account and who will take care of your finances because that should be a person who’s familiar with your company. Another question similar to this one might be whether they have any prior experience working with companies from your industry. It’s true that this doesn’t have to be a requirement, but an accountant accustomed to dealing with the peculiarities and challenges of your industry might be just what you need.
How Often Should We Be in Contact?
All CPAs have more than one client, which means that sometimes you won’t have a short-notice meeting about something urgent. Just like in any other business, clearly established communication rules are essential for a successful relationship. Ask your accountant how often you will be in touch and agree on the preferred communication channels. While many companies find email a pretty convenient communication method, others don’t like it due to security concerns. If your accountant is situated in another town, you might take Skype and other teleconferencing options into consideration too. Also, knowing how quickly you can expect a reply when it comes to pressing matters is something that will most certainly influence your decision regarding hiring a particular accountant.
Can You Connect Me with a Couple of Your Existing Clients?
Referrals and case studies are a must in every business, especially one which deals with sensitive and delicate matters, and accounting most certainly does. Ask them to provide you with a list of their former and existing clients, and don’t hesitate to contact these individuals and companies and find out everything you want to know about the person whom you’re about to trust with your finances. This will give you valuable insight into how their clients perceive them, and help you assess whether a candidate is a good fit for the job, as well as for your company, because an accountant is another member of your team who works remotely, even if you don’t consider them one right off the bat.
Will You Be Able to Improve My Company’s Bottom Line?
A good accountant knows how to use all legal means in order to reduce your tax exposure. Bookkeeping and accounting services might be at the core of your arrangement, but helping your business grow and develop is also something that you should expect from your accountant. The same goes for useful advice regarding structuring your business and making sure that you’re compliant with all the laws and regulations. A seasoned accountant who has some experience in your industry will also be able to inform you about good practice when it comes to financial recording and reporting systems.
About the Author
Michael Deane has been working in marketing for almost a decade – and has worked with a huge range of clients, which has made him knowledgeable on many different subjects. He has recently rediscovered a passion for writing, and hopes to make it a daily habit. You can read more of Michael’s work at Qeedle, or catch up with him on Twitter.