How To Choose an Accountant: 8 Things To Look For

A good accountant can help you with tax savings, managing everyday financial operations, and providing valuable advice in growing your business. In today’s competitive market, good financial support can be the key to successfully expanding your small business.

An accountant also helps you navigate the complexities of tax laws, ensuring you meet all regulatory requirements and helping you avoid the risk of an audit. We’ll explore helpful steps on how to choose an accountant for your small business.

Key Takeaways 

• Understanding your business’s financial needs is key to choosing the right accountant.
• Consider whether you need ongoing accounting support or specialized tax season accounting.
• There are 3 main types of accountants: enrolled agents, CPAs, and tax attorneys.
• Look for an accountant with experience in small business accounting.
• Professional directories and referrals are good ways to find an accountant.

Table of Contents

• Understanding Your Needs
• Determine the Type of Accountant Your Business Requires
• Seek an Accountant with Relevant Expertise
• Where To Find an Accountant
• Key Factors to Consider in Finding a Good Accountant
• Inquire About the Software Utilized by the Accountant
• Interview Multiple Candidates Before Making a Decision
• Conduct Background Checks
• Conclusion
• Frequently Asked Questions

1. Understanding Your Needs

Start your search by listing everything you’d like your small business accountant to do. This can range from seasonal support like preparing and filing taxes to ongoing work including monthly bookkeeping, payroll, and creating financial reports. Some common tasks for small business accountants include:

• Tracking expenses
• Overseeing payroll
• Preparing financial statements
• Bookkeeping
• Managing invoices
• Financial forecasting
• Managing financial transactions
• Preparing and filing federal and state taxes
• Ensuring financial legal compliance

Learn why you need an accountant for your small business for more information on understanding your accounting needs.

2. Determine the Type of Accountant Your Business Requires

In the US, there are 3 main types of accountants: enrolled agents (EA), Certified Public Accountants (CPA), and tax attorneys. 

Enrolled Agent

Enrolled agents (EAs) are accountants who have a federal license to represent taxpayers who are dealing with the IRS. This can range from tax audits to tax appeals and they can represent everyone from individuals to corporations. Businesses usually hire an EA for basic tax requirements like preparation and filing.

Certified Public Accountant

Certified Public Accountants (CPAs) are accountants who have a degree in accounting, have practiced for at least 2 years, have passed the CPA exam, and have obtained a license. CPAs may choose to specialize in a specific area of accounting, but most will be able to perform a wide array of accounting services. Businesses often hire a CPA to manage ongoing financial work like payroll, other financial reporting and forecasting, tax planning, and more, and may also bring them in for tax season.

Tax Attorney

A tax attorney is an attorney who has earned a JD degree and passed the bar. Their legal focus is on accounting and tax law and they can support you through complicated dealings with the IRS. A tax attorney can handle more complicated cases than an EA and tends to be significantly more expensive. Businesses may bring in a tax attorney to represent them if they are being audited or have received an IRS notice that requires extensive legal knowledge.

When deciding how to pick an accountant, consider your business needs—EAs can help with basic tax season requirements, CPAs can assist with general accounting as well as taxes, and tax attorneys can represent you for complicated dealings with the IRS.

3. Seek an Accountant With Relevant Expertise

While there are many accountants with strong qualifications and plenty of experience, it’s important to find someone whose experience is relevant to your small business needs. 

Know what to look for in an accountant—find someone who specializes in small businesses and is familiar with the tax breaks and other opportunities available to a company of your size. If possible, find someone who has worked with other companies in your industry and is familiar with the types of expenses you’ll be managing. 

If you’re dealing with a specific problem—for example, a tax audit or exceeding your budget in a certain area—look for an accountant who has experience in audits, budgeting and forecasting, or solving your particular small business challenges.

4. Where To Find an Accountant

Once you’ve determined what type of accountant you need, you’ll need to find someone who meets your criteria. One of the easiest ways to find an accountant is to consult association directories like the American Institute of Certified Public Accountants (AICPA) directory. You can search for accountants by area and field of expertise. You can also browse others like the CPA directory to read reviews from other customers.

If you’re part of a small business association in your area or if you have a social network of other small business owners, you can also ask for a referral. The advantage of referrals is that you can speak to other customers directly about their experiences and ask them about turnaround time, professionalism, costs, and their overall impression of potential accountant candidates. You may also be able to find someone who has work experience in your industry and area. 

5. Key Factors to Consider in Finding a Good Accountant

When looking for an accountant and interviewing candidates, there are a few key factors to consider: 

1. Qualifications

Not all accountants are required to have a degree in accounting or to pass state or federal licensing. If you’re only looking for simple bookkeeping or tax services, a bookkeeper or an enrolled agent might be a good fit, but if you need extensive accounting support or are looking for someone who can assist you through complicated tax affairs, a CPA or tax attorney has stronger accounting qualifications for rigorous financial work.

You can learn more about what an accountant does to save money and see which qualifications are necessary for your small business accounting.

2. Experience

The ideal experience level will depend on your accounting needs and your budget. More experienced accountants will cost more, so a more junior accountant might be a great fit if you only need basic financial assistance. If you’re looking for help to scale your business or if you need tax support, it’s better to find someone with several years of experience, ideally with small businesses in your industry.

3. Testimonials

A good accountant should be able to provide you with positive reviews from previous customers. If you’re looking through a directory, these may be available online or you can ask the accountant to provide references directly. Ideally, they can provide you with testimonials from small business owners in similar industries so you can get a sense of how they work with companies like yours. 

4. Availability and Cost

You need to hire an accountant who fits your schedule and budget. Make sure they’re available during the hours and seasons you need them and that they’ll fit your budget for all your required tasks—you don’t want to have to look for a new accountant mid-way through tax season.

5. Character

Working with an accountant is an ongoing relationship so it’s important to have someone punctual who communicates well and contributes to a pleasant workspace. Even with good testimonials and a positive resume, try to meet or call a potential candidate so you can assess how well you’ll work together.

6. Inquire About the Software Utilized by the Accountant

Your accountant will likely be familiar with several accounting software options, but it’s helpful if they have direct experience with the one your company uses. This will save you from having to import all your information into a new system or from having to pay for new accounting software.

FreshBooks accounting software is a straightforward system that makes it easy to manage your financial accounts. Keep track of everything from payroll and expenses to sending and receiving invoices so your accountant can quickly find and organize your financial information. 

7. Interview Multiple Candidates Before Making a Decision

It’s a good idea to interview multiple candidates before choosing an accountant so you can find someone who fits well with your company. 

Ask about qualifications and experience and assess whether their previous work experience aligns with your company’s needs. If you have any specific financial problems you need to address, such as expenses you want to reduce, this is a good time to bring up your concerns. You can talk through how the accountant would help you solve your problem and compare how each candidate would approach the issue.

This is also a good opportunity to get a feel for each candidate and how they might fit into your company. If they’ll be working in-house, consider meeting them in person so you can both get a sense of how they’ll work with your team.

8. Conduct Background Checks

Before you make your final decision, conduct a thorough background check on your prospective accountant. Contact the relevant licensing board to check that their accounting license is valid—for example, the State Board of Accountancy can confirm active licenses for CPAs in your state.

It’s also a good idea to connect directly with their references. Double-check that testimonials are from real, credible businesses and don’t be afraid to contact those references and ask about their experiences. Particularly if you’re looking for assistance with tax filing, compliance, or dealing with the IRS, having a reliable, licensed professional is essential to a positive accounting experience.

Conclusion

The right accountant can make all the difference in successfully growing your small business. They can help you manage daily operations, provide valuable financial advice, and make tax season a breeze. Look for an accountant who aligns with your business needs, has relevant experience in your industry, and can advise you on any financial challenges you may be facing.

FreshBooks accounting software is a great fit for small businesses and accountants. Try FreshBooks free to discover how good accounting software can help you achieve your business goals today.

FAQs About Choosing an Accountant

Learn more about how much accountants earn, their accounting duties, and how an accountant can save you money with these answers to frequently asked questions about choosing an accountant.

How much does an accountant earn a year?

In 2023, the median pay for an accountant was $79,880 per year. CPAs typically earn more than regular accountants and tax attorneys usually have the highest earnings of accounting professionals. Accountants may also receive benefits and bonuses in addition to regular salaries.

What are the duties of an accountant?

An accountant can have a range of accounting duties, including financial analysis and consultation, generating financial reports, managing regulatory compliance, using financial records, and preparing and filing taxes and audits. Learn more about common accounting duties to find out why you should hire an accountant for your small business.

How much should I pay for a good accountant?

Most accountants charge an average of $37 an hour, though this will be higher for CPAs and tax attorneys. How much you should pay will depend on your accounting needs—simple monthly bookkeeping is more affordable, whereas professional representation in IRS dealings is more expensive.

What’s the difference between a financial advisor and an accountant?

A financial advisor will guide you on big-picture financial decisions like investments, tax planning, financial health, and growing your business, whereas an accountant will manage day-to-day and hands-on financial tasks like bookkeeping, cash flow, and tax preparation and filing.

Is it worth getting a personal accountant?

Unless you’re confident in your business accounting skills, it’s worth getting an accountant for your small business. An accountant can help you analyze costs and increase profits as well as ensure your business meets regulatory compliance for tax filing.

What are the disadvantages of hiring an accountant?

The primary disadvantage of hiring an accountant is the cost. However, if you’re not confident in managing the financial side of your business or it will take up a lot of time that could be spent on other aspects of your business, it may save you money overall.

Will an accountant save me money?

An accountant can save you money if you’re not experienced in accounting. Tax audits can be time-consuming and expensive, so ensuring compliance can save you money in the long run. A good accountant may do federal and state tax returns and also be able to advise you on managing expenses and saving money in your day-to-day operations.

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