Finding the Right Accountant for Your Small Business

What does a business accountant do?

A business accountant examines your company’s finances and prepares accounting reports. They ensure your data is correct and your small business taxes are paid correctly and on time. Some accountants may also provide bookkeeping services. 

An accountant’s duties include the following:

• Identify every tax deduction you’re entitled to take.
• Recognize problems, such as disappearing inventory, increased costs for products or equipment or customers who don’t pay their bills, before they have a chance to bring down your business.
• Enact cash flow strategies to maintain acceptable cash flow levels.  
• Point out potential growth areas by analyzing pricing, cash flow patterns, inventory management and small business financing options. 
• Put together the financial reports you need to secure the best business loans and investments.
• Prepare your tax returns quickly and accurately. 

How do you find a business accountant?

If you’ve decided a small business accountant can help your organization, follow these best practices to choose the right financial professional for your needs. 

1. Decide what you need from your accountant.

What do you want your accountant to do for your business? Some accountants are willing to do bookkeeping while others focus on broader business tasks. You might find it more cost-effective to choose an accountant or firm that provides only the services you need. 

2. Compare your needs to an accounting firm’s offerings.

There’s no need to compromise on matching your needs to an accounting firm’s services. Many firms exist and you’re sure to find one that checks all your boxes. For example, consider the following: 

• Do you need bookkeeping services? If you want a bookkeeper to handle mundane daily or weekly bookkeeping duties and an accountant for more overarching financial concerns, look for an accounting firm that provides both services. 
• Do you maintain your own books? If you maintain your own books, find an accountant who will work for you periodically (weekly, monthly or quarterly), produce statements and evaluate your business’s financial health. 
• Do you need a certified public accountant (CPA)? If you need more robust financial services, consider hiring a CPA. CPAs are tax experts who can file your business’s taxes, answer important financial questions and much more.

3. Search in the right places to find a suitable accountant.

To find the right accountant for your business, consider the following sources: 

• American Institute of Certified Public Accountants (AICPA): The AICPA is a recognized and reliable source for finding accountants. AICPA has a license-verification CPA directory. Visit AICPA online to learn more.
• Accounting & Financial Women’s Alliance (AFWA): Check out the Accounting & Financial Women’s Alliance if you’d prefer to work with a woman. Visit the AFWA website for more information.
• Word-of-mouth recommendations: Seek recommendations from other small business owners, preferably in your industry. Joshua Dubrow, chief financial officer and chief operating officer at Lorber Capital, noted that word of mouth is the best way to find an accountant. You don’t necessarily need to go to a big firm ― some of the best accountants have their own practices.

4. Ask potential accountants about year-round services.

A good accountant should be involved in your business regularly, not just at tax time. They can significantly add to your bottom line by setting up and structuring financial plans and operations efficiently. 

Ensure any potential accountant or accounting firm offers year-round services. Year-round services track your finances and will be more effective at tax time while maintaining accurate financial reporting and supporting quality decision-making.

5. Meet your accounting prospects face to face.

You may turn to the internet when conducting your accountant search. But Dubrow warns against hiring someone you find on Google or meet only via an online directory. 

“You’re looking for someone that’s going to help you financially, not only with taxes but to help your business grow, so you really need to meet with someone face-to-face,” Dubrow advised. 

Frequently asked questions about hiring an accountant

Here are answers to some typical questions business owners ask when they’re considering hiring an accountant. 

Should you hire an accountant for your business?

You should hire an accountant if you need help setting up your accounting system, maintaining financial documents, auditing your business’s books or financial statements or creating financial goals for your company. 

Managing your business’s finances can be complicated and confusing if you don’t have a background in business accounting ― even if you have the best accounting software. Just sifting through payroll and bookkeeping processes can be overwhelming, noted John Cordano, Chartered Financial Consultant, Chartered Life Underwriter and financial advisor with California Financial Advisors. “There can be a lot of loopholes that you’re not going to be aware of, especially with tax laws changing,” Cordano explained. 

Working with an accounting professional who understands tax laws and bookkeeping is your best option, especially when compliance is at stake. Accountants can also guide your small business in more profitable directions, giving you “the biggest tax bang for your buck,” Cordano said. 

Do you need an accountant if you’re self-employed?

Yes, self-employed individuals can benefit from an accountant’s advice on tracking business expenses and much more. “Maybe it’s not as complex as a small business that has 10 to 15 employees, but if someone is self-employed, there may be specific advantages and expenses you may be able to take advantage of,” Cordano advised.

An accountant can clarify self-employed tax considerations and provide insight and advice on preparing for retirement ― a challenging issue for sole proprietors if they don’t know their options.

What qualifications should you look for in an accountant?

Qualifications vary by accounting type:

• Accounting clerks: An accounting clerk must have at least a high school diploma and on-the-job training. 
• Accountants: An accountant must have a bachelor’s degree in accounting. 
• CPAs: A CPA must have an accounting degree and additional certifications. 

Any accountant you hire should have the following skills: 

• Solid understanding of essential financial subjects: Your accountant should have a good understanding of tax laws, accounting software and business management. 
• Communication skills: When interviewing an accountant, pay attention to their communication skills and how they explain information. Sometimes an accountant will have to decipher documents and information for you, so they must be able to communicate clearly. Crunching numbers is essential, but proposing cost-cutting solutions is also valuable.

How do you evaluate an accountant?

Practice due diligence when choosing an accountant:

• Research your accountant candidates: Consider reading our guide about background check types to research the candidate. Ask for and check client references. Ensure your candidates are certified. Look them up online to see if there are any regulatory complaints or marks on their record. 
• Meet in person to see if you’re a fit: If everything checks out, arrange a meeting to discuss your business and its goals. Ask if your candidates have experience in your field or industry. Determine how readily available they’ll be, how much time they’ll dedicate to you and whether they’ll work at your place of business or their office. 
• Gauge a potential accountant’s proactivity: You want your prospective accountant to offer financial advice and ask the right questions. To gauge this ability, ask if they have any questions about your business. If they don’t, find another candidate. It’s their job to be up in your business (literally and figuratively). The more involved they are, the better value you’ll get from their services, helping you save money and grow your business.

How much does it cost to hire a business accountant?

Accountant fees vary by region, qualifications and your business’s unique needs. Here’s a rough estimate of what you can expect:

• Staff accountant: If you plan to hire a staff accountant, the median salary is $77,200 per year ($37.14 an hour), according to the United States Bureau of Labor Statistics. 
• Accounting firm or independent accountant: If you work with an accounting firm or independent accountant, most charge $60 to $400 per hour, with an average of $175 per hour. If price is a significant concern, you may be able to negotiate a flat fee to keep the accountant’s services on retainer. 

To account or not to account

That’s seemingly the question, right? Well, kind of ― your business needs an accountant. The question you might ask instead is more like which accountant is right for my business? If you reread the above guide after finding a potential accountant for your firm and they hit every mark, you’re in good hands.

Max Freedman and Marci Martin contributed to this article. Source interviews were conducted for a previous version of this article.