For small business owners, finding and hiring the right accountant is one of the most critical decisions to be made. Having someone knowledgeable enough to help guide your business through tough financial decisions and monitor spending and profit could be the difference between success and failure.

Deciding to make this task a high priority is critical to ensuring the stability and safety of your finances. Follow these simple steps to find the right fit for your small business.

1. Decide What You Need from an Accountant

The first and arguably the most important step to finding the right accountant is to decide exactly what your business needs and wants from an accountant. Narrowing down your expectations is vital to finding and hiring a compatible accountant.

Consider what you are willing and able to pay and what services will be required.

Be familiar with the basic services offered by accountants:

  • Tax advice: Provides assistance with tax compliance and tax planning, helping your business reduce its tax burden and follow tax laws.
  • Auditing: Assures that financial information is correct, often as a condition of a loan.
  • Record-keeping: Assists with setting up a day-to-day accounting system to monitor expenses, track budgets, etc.
  • Advisory services: Helps with business plans and financial plans, such as insight on potential expansion.

Decide which of these services you will be requiring from your accountant and what you will be able to do on your own. Also, think ahead to future needs and the possibility of expanding services as your business grows. Working with someone who can grow with your business is essential.

2. Locate Potential Accountant Candidates

Once you decide what you need from an accountant, be sure to use all of your resources to locate accountants to ensure you have a large pool of candidates to choose from.

  • Ask for referrals from your attorney, banker and business colleagues

3. Evaluate Candidates

After creating a list of candidates, the next step is to interview potential hires. At least two interviews are recommended to help you narrow down the field and get the correct questions answered. One of these interviews could potentially occur during a free initial consultation if the candidate agrees to do so.

The first points to cover with the candidate are very basic. Ensure that the accountant has a professional accounting qualification and personal indemnity insurance. These will help make sure that the accountant will be responsible if something goes wrong; they also give your business the option to potentially make a claim.

During the interview, you’ll want to make sure some key points are covered:

  • Services: Find out exactly what services they offer and make sure this fits what you need.
  • Size: What is the size of their firm, and is the person you are initially meeting the same one you will be working with?
  • Personality: Ensure their personality is compatible with the way you run your business. This can be determined by asking a few questions regarding how they would handle specific situations.
  • Fees: Be straightforward in your questions about payment. Get quotes and find out what will be billed as “extra.” Also, remember that quality and experience often come at a price.
  • Experience: Determine the candidate’s experience with small business. Small businesses have specific, dynamic needs, and they want to work with someone who is familiar with those needs. Depending on the complexity of your finances, you may even seek an accountant with experience in your specific industry or business type.
  • References: Ask for references, particularly ones in your industry. Contact these references and ask about flexibility, responsiveness and services.

This document, entitled “Ask These Questions Before Hiring an Accountant,” offers a few other benchmark points for hiring. Finding a trusted accountant with the right experience through this process will ensure that you make a good decision for your business.

4. What’s Next?

After making a final decision, the selected accountant will most likely send you an Engagement Letter for review. This letter sets forth the material terms of the accountant’s services. It will contain payment terms, methods for mediating disputes and the right of either party to terminate services.

Review this document to verify that it details the returns and statements to be prepared and that your expectations are clearly laid out.

The following attorney-drafted documents can be used to facilitate the client-accountant relationship: