For most small-business owners, it’s important that they have someone who can provide proper accounting advice during every stage of their venture — from start-up to succession planning. Choosing the right accountant can be a challenging task. You want to find someone who communicates well, helps you strategize and maximize your business’s finances, is affordable and is willing to adjust to your risk tolerance within reason.
As an accountant who has worked with many different types of clients, I know that many business owners — either out of self-confidence, or apathy and disappointment with the accounting profession — have chosen to forego hiring a professional and used some type of software or online service to prepare their tax returns themselves. I strongly encourage business owners to at least have a CPA review their tax returns if they prepare it themselves, and have a semi-annual planning session to make sure they aren’t missing out on tax advice that could save them bundles — or an unpleasant visit with the Internal Revenue Service.
Regardless of how often you choose to see your accountant, having a good one can be priceless. But, how can you find the right accountant for your business?
Here, I’ve outlined some key characteristics of a strategic accountant. I use the word “strategic” because a quality accountant’s most important skill is to be strategic on your behalf. It doesn’t just mean bringing you good ideas. They should have strong entrepreneurial skills, be able to communicate well and have an efficient team behind them to complete the work.
When you bring all of these characteristics together, you have someone who is strategizing on your behalf and creating the maximum possible savings for you.
When you interview accountants, analyze them against these characteristics:
They’re not perfect. If they think they are perfect, then you’ve got the wrong accountant (or CPA). Be especially careful with the “know it alls”. Their egos and insecurities can sometimes get in the way of getting you the best answers and/or advice. No one is perfect and not one person can encompass all of these characteristics, nor have all the right answers on the top of his/her head. Ask them what they feel their weaknesses are. If they’re good, they will admit how their team (or professional network) positively complements and adds to their own personal skills or style. They should be busy and they won’t be cheap, but they should be affordable and reasonable.
They can answer basic small-business accounting questions. If you ask basic questions about starting or running a small business and they have the deer-in-headlights look or say they have to research these basic questions, then you’ve got the wrong accountant.
They are willing to share your risk tolerance. You will never find an accountant who shares your risk tolerance exactly. They should be willing to be creative, yet not be too risky. At the same time, they shouldn’t be too conservative. Ask them how they would treat certain kinds of deductions, income or strategies to see if they respond to your satisfaction. If they refuse to be flexible then you’ve got the wrong accountant.
You can understand them. If you’re confused after a conversation with an accountant, keep interviewing until you can find someone who doesn’t speak jargon, who can explain the numbers and tax laws at a level you comprehend, and is easy to talk to. An accountant should be a partner in your entrepreneurial dreams. You don’t want to dread a trip to your accountant like you dread a trip to the dentist.
They have an entrepreneurial spirit. Keeping in tune with the last tip, if an accountant thinks that having a small business is a bad idea or too risky then you’ve got the wrong person. Some CPAs don’t like small businesses and would rather deal with people who have W-2 income and simple itemized deductions. This isn’t the accountant for you if you really want to build and save wealth.
Their team is better than they are. As stated previously, it should be a red flag if your accountant thinks he’s better than his team or plans on doing all of the work him or herself. You want to work with an accountant who offers strategies and leads a team, not someone who is inputting your data and spitting it back to you. That is a poor use of their time and a poor use of your money. They should be considering the overall picture of your finances and business, and reviewing your tax return. With that in mind, analyze the office staff and how they interact with you. If they aren’t cordial, kind, knowledgeable and helpful then you’ve got the wrong accountant who has the wrong staff. Any successful entrepreneur will tell you that it is absolutely critical for you to hire and groom the right people around you. If your accountant doesn’t understand this and put it into his own practice, how can he/she really be the right fit for you?
- Best Practices For Managing Your Business Cash Flow - March 18, 2020
- How to Choose Between Outsourcing and Hiring Financial Employees For Your Business - March 18, 2020
- Deferred Sales Trust Business Broker - May 21, 2018