When it comes to tax preparation, a good accountant will make sure your business is in compliance with tax laws, your return is accurate, and help save you time and money in the short and long term. The right accountant will become a trusted colleague you rely on to offer advice and guidance as your small business grows.

If you have decided to hire an accountant, it’s important to take the time to choose one carefully. It’s in your company’s best interests to have an experienced, capable professional handling one of the most important areas of your business: your finances. Here are some key factors to consider before making your decision:

Define your business needs.

Accountants can handle every aspect of bookkeeping, payroll, and small business accounting. However, while the range of services can be diverse, not all accountants provide the same services. More importantly, you need to determine exactly what services your business needs before you hire someone.

Ask yourself what tasks you want your accountant to perform. Do you simply want someone to complete end-of-year financial statements and file your taxes, or are you looking for a partner to help you grow your business? Do you need a tax specialist to handle your complicated tax situation or a business specialist who understands your complex ownership structure?

Many small business owners consider their accountants as outsourced chief financial officers. They can analyze your financial data and provide information for forecasts, business trends, managing cash flow, and identifying opportunities for potential growth. They can advise you on financial strategies such as whether or not to secure working capital financing to cover cash flow gaps or purchase a new product line. If you apply for a business loan, they can help pull together the necessary paperwork.

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Look for relevant expertise.

Look for a professional who has experience working with companies that are similar in size and revenue to yours. It’s even better if the accountant you choose has clients in your market sector or one similar to yours, as they will be better equipped to understand the unique needs of your business and provide valuable insights.

Some small business owners prefer to work with smaller accounting firms. These firms know first-hand what it’s like to be a business owner, and working day-to-day with a small team or single practitioner allows you to build a solid relationship and feel like a valued client. If your company is on the fast track to growth, consider asking how the accountant’s clients have developed over the years or if they handle larger firms as well. This will give you a sense of whether or not they will be able to handle the needs of your business as it evolves.

Use all available resources.

Once you’ve identified your priorities, look for an individual or firm that can provide those services. Tap into every available resource and connection at your disposal. Check out company websites including partner profiles, services offered, and industries served. Organizations like The American Institute of CPAs (AICPA) and the National Society of Accountants also have links to directories and state accounting associations.

Other avenues to consider include:

  • Professional Referrals: Your professional networks are a rich referral source. Ask peers and other business advisors you trust for recommendations of accountants who offer the services you want. Find out what they like about the person or firm they are currently using or request the names of other financial professionals in their networks.
  • Online Sites: Business-centric sites like LinkedIn can be useful tools for researching accounting professionals who have been recommended by others. If you are connected to other small business owners in your market sector, reach out to them for recommendations or request specific introductions.
  • Social Networks: Ask friends or family members who own small businesses if they would recommend their accountant and, if so, why. While someone who is right for a friend’s recruiting firm may not be ideal for your manufacturing business, you may get valuable leads to financial professionals who can help you in your search.

Interview more than one candidate.

Comparing a number of candidates can help you further clarify your business requirements and define the type of accountant you really need, as well as make it easier to determine which individual or firm is best for your business. Interview each accountant just as you would any potential hire, focusing equally on their expertise and how likely you are able to work well with them.

You will want to know how long they have been in business and if they have the knowledge and expertise to handle your specific tax situation. In addition to asking about fees, be sure to determine whether or not they will perform the work personally. If they will outsource any of your work, find out about their review process and who signs the returns.

Once you have narrowed down your choices, do your due diligence. Get references and ask for names of current clients that are similar to your business. While you can expect any reference to give an enthusiastic endorsement, dig deeper to gain an understanding of why they are happy with the accountant’s work.

Negotiate fees up front.

As a small business owner, negotiation is intrinsic to your day-to-day operations. When it comes to your accountant’s fees, keep in mind that nothing is non-negotiable. Ask for written estimates from each of the professionals you are considering, including how and when you will be expected to pay for their services. You need to know exactly what you will be getting in order to gauge the value and make fair cost comparisons.

Don’t be afraid to ask for an alternative fee structure or payment schedule that makes sense for you and your business. Your accountant of choice may not agree to what you propose, but if you don’t ask you will never know.

Go with your gut.

If you’ve been running your business successfully, chances are you are no stranger to making decisions based on gut instinct. Intuition can be a powerful business tool when combined with experience and confidence in your skills and ability. When you meet prospective candidates, you will logically evaluate key factors including experience, pricing, and references. In addition, ask yourself if this is a person you can trust with the intimate details of your business. If your intuition keys in on cues that do not feel right, it is probably a good idea to walk away. Gut feelings are not always accurate, but it would be unwise to ignore them when it comes to something as important as choosing a business accountant.

The right accountant can be a valuable resource when you need to make critical decisions that impact your small business. By handling complex financial work and offering practical advice on day-to-day and big-picture issues, they can save you money and help you develop smart strategies for meeting your short- and long-term goals.

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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.