Important Questions a Small Business Owner Should Ask Before Hiring an Accountant

Accountants bring order to one of the trickiest, most stressful parts of your business: finances. With a professional accountant, you can save your company money, stay compliant with governing agencies, and budget for the future. The financial performance of your company is primarily dependent on the informed decision-making of your external accountant. Therefore, you need to hire a reliable & trustworthy accountant. 

As a business owner, you will be able to breathe easy knowing that your business’ finances are in skilled hands. However, before you can relax, you have to find the right accounting professional for the job. While some prefer to hire in-house, others choose to hire an accounting firm or service to handle their business’ finances. It doesn’t matter what path you take; you still need to ask the right questions.

Questions to ask an accountant

1. Which Accounting services Do you Specialize In?

Just like other professions (like law and medicine for example), all accountants are not equal.  Some have spent their careers doing tax and audit, while others have focussed on business performance. Accounting is a vast industry with various specializations. Not every accountant can perform every duty. That’s why you should focus on specialty areas as part of what you ask before hiring an accountant. 

Some accountants focus on tax preparations, while others handle essential business reports. First, figure out what your accounting needs are, and then seek an accountant with a track record of tackling those particular tasks. Make sure your small business accountant offers what you need.

2. Do you Have the Right Qualifications and Certificates?

Depending on what they do, accountants require specific certificates from governing agencies. For example, accountants need a certified public accountant credential to write an audit report about their company’s finances. If a prospect can’t show you the credentials, it’s a red flag that your accountant may not be the right choice for you.

3. Do you Have Experience with Small Businesses?

When you hire for any position, you need to look for relevant experience. In this case, you should investigate if the accountant has experience working with small businesses.

Some accountants have only worked with corporations. They may not realize that small businesses can do accounting differently.

4. What industries do you specialize in?

Business needs are different depending on your industry. If your chosen accountant has specific experience in your industry, it is usually helpful. An accountant with experience in your industry:

  • Should get up to speed on your business more quickly
  • Will understand the language around your business and your industry
  • Will be able to share industry best practices 
  • Will understand the cultural differences between your type of business and a business that serves a different industry

5. How Long Have You Been in Business?

More experience is always a good thing, especially if an accountant has worked with comparably sized businesses in your industry. Be sure to ask for references from similar clients.

6. How Comfortable Are You with Accounting Software (and Other Apps) You Use?

Chances are, you’re probably already using accounting software. The accountant you hire should already be familiar with the tools your business uses. If not, is he or she willing to learn them?

To save time and reduce the risk of errors, most of today’s modern accountants also use tools like payroll software. The software can automate tedious tasks, streamline reporting, and in many cases, enable employees to access pay stubs and tax information. But it can also cause headaches if your systems don’t mesh. Make sure all your back-office software is compatible with theirs before making a choice.

7. How can you help me grow my business?

Make the accountant or accounting firm sell you on the fact that they’re good at what they do. A qualified accounting professional will help a small business expand over time. Strong financial management is one of the many steppingstones to business growth, and an honest accountant will be able to tell you how he or she plans to make that happen.

8. How Risk-Averse Are You?

When you interview a prospective accountant, it’s important to understand how they might treat risky circumstances.

If your small business is brand new, it’s likely to have a lot more expenses than income. Is your candidate comfortable with that? How much debt might she suggest you take on to get your company on a firm footing? It’s important that your small business accountant has a spirit of entrepreneurship and is willing to weather the challenges of a younger company. 

Another consideration is how risky or conservative candidates are when it comes to everyday decisions like small business tax deductions. Point out a few deductions your company could claim: Do they tend to be reckless, overly conservative, or somewhere in between?

You may not find an accountant who’s exactly as risk-averse as you, but it’s important that you’re both in the same ballpark. That way, there aren’t major disagreements down the road.

9. Who Will Handle My Tax Work?

Who at the firm will take care of your tax work? Is it the main accountant, or will they be passing you off to a junior colleague? You should know who's looking after your books.

10. Will You Help Outside of Tax Season?

Preparing your return is an important job, but what if you need help outside of tax season? Can you consult your accountant? Will they give you advice on how to grow your business? Will they keep an eye on your books for financial problems? Can they warn you when your cash flow is getting tight?

Finally, ask yourself how you feel after meeting an accountant. This person is handling some of your most important financial work, so you need someone you trust and have a good gut feeling about.

11. What is your pricing model?

Accounting services are generally priced in two different models. Hourly and fixed fee.

In the hourly model, the firm can be rewarded for being inefficient.

In the fixed fee model, you need to ensure that they don’t cut corners. You need to invest time in creating a clear scope of work and ensure that your entire scope is included in the fixed fee quoted.

In the fixed fee model, out of scope items are usually priced on a project basis

12. How do I contact you with questions?

How often will you speak with your accountant? Can you reach out by phone or email any time you have a question, or do you need to book an appointment first? Do you need to pay every time you speak with them?

Final Words

There are significant advantages for clients who decide to outsource their accounting tasks. To begin with, cost-efficiency, and ending with flexibility in terms of contracts or scaling the number of functions.

We help high-potential entrepreneurs in creative industries be successful without the stress and yawns of traditional financial management. We are the strategic voice for growth and the daily doer of the stuff you don’t want to do.  Soup to nuts - we got you covered, all for a fixed monthly fee.  All backed by many years of experience working for firms just like yours. Filing Taxes is a reliable accounting service provider to small and medium-sized businesses with clients from all over Canada. Feel free to contact us through our website filingtaxes.ca or reach out at 416-479-8532. Schedule your tax preparation appointment with us and take the first step towards proper management of your finances. Our professional personal tax accountants will make sure to get you the maximum tax refund on your personal tax return.

Disclaimer:

The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

Written By:
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

Leave a Reply

Your email address will not be published. Required fields are marked *

July 8, 2024
Best Practices and Strategies to Optimize Your Small Business Accounts Payables and Accounts Receivables

Managing accounts payable and accounts receivable is critical in determining the financial health of any company. Properly tracking and managing them is important not only for assessing overall performance but also for helping managers and owners make smarter decisions that can influence an organization’s future. When and how should businesses pay their bills? And when and how should they […]

Read More
July 8, 2024
How an Accounting Firm Can Optimize Your Business Account Receivables and Accounts Payables

In the fast-paced world of accounting, cash flow is king. However, managing a constant flow of incoming and outgoing payments can be a logistical nightmare for any business. Inefficient accounts payable (AP) and accounts receivable (AR) processes can lead to delayed payments, lost discounts, and strained relationships with suppliers and customers. Managing accounts payable and […]

Read More
June 5, 2024
Efficient Virtual Bookkeeping: Remote Services for Your Business

The trend toward remote employment in the current digital era has completely changed numerous businesses, including accounting. You can handle your company’s finances more simply and effectively by using remote bookkeeping services instead of hiring an on-site bookkeeper. Your financial operations’ scalability and flexibility can be greatly increased by using virtual bookkeeping services. Virtual bookkeeping combines cloud-based […]

Read More
1 2 3 10
Contact Form Demo

This will close in 0 seconds

phone-handsetchevron-down Call Now linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram