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Why it is mission critical to choose the right accountant for your business

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As a business owner, it’s important to choose an accountant that acts not only as a bookkeeper, auditor or tax advisor but also as a trusted financial advisor.

The idea is, that a good accountant can advise you on business risks and manage your finances effectively.

The accountant will have access to your financial information, so you need to be able to trust your accountant.

Choosing the right accountant can be a very daunting challenge. Whether you’re a sole trader, limited company or multi-national company, it is likely that you will need the services of an accountant to prepare your end-of-year financial statements and tax accounts.

It’s hard to find a good accountant, so hard, in fact, that it has become something of a running joke in the small business world. Okay, so maybe that’s not entirely fair. But, as with most humour there’s a grain of truth to the joke.

But before you start looking for a new accountant, you first need to evaluate whether or not your current accountant is adding significant value to you and your organisation.

Donnie Buchanan, founder of Advantage Line Accounting has been around the industry long enough to see the shifts, especially in the past couple of years as a result of the information age and technology.

“An accountant requires your personal and business information in order to provide thier services effectively, so trust is paramount. People usually go into business for an improvement in thier personal situation, so a good accountant will ask the right questions to serve both personal and business needs,” explained Buchanan.

Whilst there are a lot of elements that make up a good accountant, I believe there are some key fundamental aspects you should take into consideration before you decide to FIRE your accountant or Hire a new one.

Does the accountant have industry experience?

Accounting is a general field. In addition to certifications, you should look for accountants with expertise in your industry sector or in a similar industry.

Some accounting firms may have experience in non-governmental organisations (NGO’s), recruitment or manufacturing businesses.

Accountants don’t offer just basic bookkeeping and auditing services; they also provide expert insights. An accountant with experience in your sector should fully comprehend the issues and challenges faced and could provide invaluable advice when needed.

What is the size of the accounting company?

It’s advisable to speak to an accountant that is similar in size to your business. For most start-ups, a small accounting firm is often a more attractive option than a large multi-national accounting business. Similarly, large corporations feel more comfortable employing a large, name-brand accounting firm.

Find an accounting company that fits your company.

Is the accountant proactive or reactive?

Where your finances are concerned, you want to be aware of any issues well before they become real problems.

So, finding an accountant who is proactive is key. You definitely want somebody that’s going to ask you questions and present potential problems before they occur.

Are they a conservative or more aggressive accountant?

Some accountants want to write off everything they possibly can, while others take a more conservative approach.

It’s important to figure out where you fall on the spectrum and find an accountant who agrees with your philosophy. If accountants tell you they specialize in finding red flags that could trigger audits, they may be hesitant to maximize your deductions. For example, some accountants believe taking a home office deduction might be a red flag.

On top of this Buchanan believes that there are two other major factors that should be taken into consideration when choosing the right accountant:

Are they technologically adept?

Advancements in technology changes the way in which businesses operate. This has never been more obvious than in the accounting and bookkeeping industry. This industry is undergoing a major change as businesses move into “the cloud”.

The cloud has been defined differently by users but could simply be considered as online accounting (as opposed to historical desktop accounting).

The cloud brings significant benefits to business owners in the form of reduced setup and ongoing costs, accessibility and streamlined processes between the “Triangle of Trust”: business owner, bookkeeper and accountant.

A good accountant must understand and promote cloud accounting to add value to the clients business. A question to ask an accountant is: “If you’re not on the cloud, why not?”

Are they connected?

Business owners require much more than tax returns and bookkeeping. A business owner could require the services of a tax agent, bookkeeper, financial planner, lender, legal advisor, insurance specialist, banking relationship manager and business strategist.

A good accountant will have trusted connections that they can confidently refer their clients to. This value-add provides the client with some sanctuary in knowing that a trusted group is sharing their information. A question to ask an accountant is: “Who do you know and trust?”

The relationship between an accountant and a businessperson needs to be evolving. As the needs of a business change, a good accountant will tailor their advice to suit the particular needs of the business at the time by providing accurate advice and indicate when an area is outside the scope of their expertise.

The industry is as competitive as it has ever been. And, it’s going to get more so. Don’t be afraid to change accountants if your accountant is not giving you value for money and the advice that you need. Because, the chances are there is an accountant out here who will be willing to do what your current accountant is not.

Alex Pirouz is the founder of RIDC Advisory, a business advisory firm partnering assisting companies successfully start, grow and exit their business. Connect with Alex on LinkedIn.

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