Choosing an accountant can be one of the most challenging important decisions you will make as a small business owner.
You are not just looking for someone do your accounting...you are looking for someone that will be a key adviser to your small business. A good one can help grow your business. A bad one can hurt your business and your pocketbook.
1. Do not return phone calls. CPAs and accountants stay really busy; however, if 2 to 3 business days go back and they haven’t returned your call, give them the benefit of the doubt and call them again.
If they don’t return your call after the second attempt, it may be time to choose another accountant. (See steps to choosing an accountant below) Most “good’ accounting firms will return your call within 24 hours and at least schedule a time to talk.
2. Record your assets or liabilities incorrectly. One of my clients “changed accountants” because their previous one would not return their phone calls and they were in desperate need of current financial statements to apply for a loan.
In reviewing their reports from the previous CPA firm, I noticed their building was recorded as $56,000 on their Balance Sheet. I knew that could not be right and after questioning the treasurer I discovered that was the amount of their down payment. They also had a $300,000 mortgage on that building.
This is where knowing a little bit of basic accounting is so important…even if “you have a CPA that does that stuff”.
Fixed assets on the Balance Sheet are recorded at cost plus the cost of freight to deliver, installation, and any other cost to make the asset functional for the business. Depreciation comes into play too, but if that treasurer would have known some basic accounting, he would have realized that number was way off.
3.Charges you an outrageous price without breaking down exactly what services you will receive for that amount and how it will benefit your business. They should present you with a proposal with a breakdown of every service they will provide and at what charge…before you ever agree to hire them.
4.Does "extra stuff" without notifying you and then tries to charge you for those extras. It should state in the proposal talked about in item 3 that they will charge x amount …not to exceed y amount.
In accounting, you should always expect the unexpected, but an honest accountant will notify you ahead of time and inform you how much the “unexpected” is going to cost and get your permission BEFORE doing it.
5. They don’t seem to be in hurry to get your project done and does not respect deadlines. Again…I work for a CPA firm…we stay really busy; however, a good accountant is going to do their best to get your project done in time.
Now that is assuming you are working with your accountant to beat a deadline! If they tell you they need additional information or documents to proceed and you wait days or even weeks to get that request to them…don’t be surprised or even upset when that deadline cannot be met.
6. They make grammar or spelling mistakes-or even worse-mathematical mistakes. That one speaks for itself:)
1. Returns your calls. Preferably the same day, but at least within 24 hours. They may have to schedule a time to talk, but they or someone from their office returns your call to do so.
2. A good source of referrals. If you need to consult an attorney, your accountant should be able to introduce you to a good one that deals with small businesses like yours. They can also introduce you to a good banker if you do not already have one.
3. Know their business. They should be up-to-date on all tax laws and legislation in their field of business.
4.They are experienced with working with businesses in your industry.
5. Able to help you grow your business by analyzing and interpreting your financial data and then giving you sound business advice based on their findings.
So, choosing an accountant is even more important than choosing a new car...you probably will have to live longer with a small business accountant decision. Switching accountant can sometimes be difficult and expensive...so choose wisely in the beginning.
Choosing an accountant that you feel comfortable with and will help you grow your business is a necessity as your small business begins to grow. Invest in the time and effort to make an informed and wise choice. You'll be glad you did!