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Finding the Right Accountant for Your Small Business

image for Oleksiy Mark/Shutterstock
Oleksiy Mark/Shutterstock

Many businesses rely heavily on professionals to help them navigate the finer points of specific operations. Few professionals are so important as the accountant. While it's not mandatory to hire an accountant, it's a huge benefit to have someone at the ready to review financials and file tax documents. The critical advice an experienced accountant has to offer your business might just mean the difference between success and failure, and their expertise can help guide your decisions as your business grows.

According to the Service Corps of Retired Executives (SCORE), there are a number of things your accountant can do for you, such as:

  • Identify every tax deduction you're entitled to take.
  • Recognize problems early (such as disappearing inventory, increased costs for products or equipment or customers who aren't paying on time), before they have a chance to bring down your business.
  • Maintain your cash flow at acceptable levels.
  • Point out areas for growth by analyzing pricing, cash flow patterns, inventory management and types of business financing.
  • Put together the financial reports you need to get loans and investment.
  • Prepare your tax returns quickly and accurately.

But how exactly do you find one that's right for you? Here are some questions to ask and places to look when choosing a good accountant for your small business.

Related Article: Check out our best picks for online payroll services.

The first step in your accountant search is to determine what you want yours to do for you. Some accountants are willing to do bookkeeping, while others focus on broader business tasks. If you are looking for a bookkeeper to handle the relatively mundane daily or weekly bookkeeping duties as well as an accountant, you'll want to look for an accountant or firm that provides both services. If you maintain your own books, find an accountant who will work for you only on a periodic basis (weekly, monthly or quarterly) producing statements and evaluating the health of the business. A good accountant should be involved in your business on a regular basis, not just at tax time, and can add significantly to your bottom line by setting up and structuring your business operations efficiently.

Once you know what you want from your accountant, look for possible candidates. Joshua Dubrow, of the New York State Society of Certified Public Accountants Small Business Outreach Committee, said that many people's first instinct when looking for an accountant is turn to the Internet. But he warned against just picking someone you find on Google or an online directory.

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

A recognized and reliable source to look for an accountant is the American Institute of Certified Public Accountants (AICPA), which has a directory of CPAs, accounting companies and local accounting societies. Chartered accountants tend to do commercial work within corporations, rather than doing public practice work for other entities. You can also check out the American Society for Women Accountants if you'd prefer a female accountant.

You can seek recommendations from other small business owners, preferably in an industry similar to yours. In fact, Dubrow noted that the best way to look for an accountant is by word-of-mouth. You don't necessarily need to go to a big firm, either — some of the best accountants have their own practices.

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Just as you would not hire an employee without an interview and a careful analysis of their résumé, practice that same due diligence in your choice of accountant.

Do a background business check and ask for client references, then arrange a meeting to discuss who you are, what you want to do, what steps you have already taken, and what type of entity you are setting up, said Renee Cooper, president of the Philadelphia chapter of American Society of Women Accountants. Ask how readily available your accountant is going to be, how much time will be dedicated to you, and whether the work will be done at your place of business or at the accountant's.

You also want your prospective accountant to be able to ask you the right questions. Simply ask the candidate if he or she has any questions about your business. If he or she does not, find another candidate. You need to know how proactive the accountant will be. The more involved the accountant is in your business, the better value you will get.

Every business is different, so there is no easy answer as to how much an accountant and his or her services should cost. Prices vary by region and locale, as well as whether you choose a regular accountant or a certified public accountant (CPA). According to Entrepreneur.com, most firms charge an hourly fee, ranging from $100 to $275 per hour. If price is a major concern, you may be able to negotiate a flat fee to keep the accountant's services on retainer.

Additional reporting by Mitchell Hall and Adam C. Uzialko.

Marci Martin

With an Associate's Degree in Business Management and nearly twenty years in senior management positions, Marci brings a real life perspective to her articles about business and leadership. She began freelancing in 2012 and became a contributing writer for Purch in 2015.