Having an accountant on your payroll can provide a wealth of advantages to business owners, but the search for the perfect accountant can be fraught with pitfalls. In order to cash in on all the benefits you receive after hiring an accountant, you need to ask the right questions.

10 Things to Ask Before Hiring an Accountant

Looking to hire an accountant? Before you jump right in, there are a few important things you should know first. Here are 10 essential considerations to consider before you start hiring.

1. What Services Do They Offer?

The services that an accountant offers can vary greatly from individual to individual. However, accountants can typically prepare financial statements and projections, perform bookkeeping tasks, complete federal and state tax returns, and prepare workers’ compensation returns.

If you need someone to provide specialty services, such as payroll or interim staffing, you’ll need to check if that’s offered. Specialty accountants and CPAs are often the most skilled.

2. What Credentials Do They Have? 

While bookkeepers don’t have to have a degree in accounting or finance, accountants need to be certified in order to file taxes with the IRS. And if you think no one would lie about having a college degree, think again. 41% of applicants weren’t truthful about their college credentials. 

Those few seconds you take to check a person’s credentials can save you big time in tax audits or a potential government shutdown. Not only that but by checking for a college degree, you’re ensuring that the person you hire has the skills and qualifications to handle your finances.

3. Are They Experienced? 

Experience isn’t the most important thing in the world, but it should count for something. This is especially true if you work in a highly-specified niche and you need someone to run accurate financial reports. If you need help with general accounting matters, a junior can handle that.

Before hiring an accountant, ask them about their experience and the types of clients they’ve worked with. If you see one of The Big 4 Accounting Firms on their resume, they’re guaranteed to be high-quality. With that said, experienced accountants will cost more to hire than juniors.

4. What Are Their Rates and Fees? 

An accountant’s fee structure depends on several factors, including what you want them to do and how many returns you need to file. A self-employed worker will pay more per return than an employee, and an enterprise owner will pay much more on payroll than a small business owner.

Are you short on cash? Ask them upfront how much they charge for services and whether or not they are willing to work within a budget. Don’t expect them to discount services after the fact.

5. What Methodologies Do They Use? 

Depending on the type of accounting or services you need, you may need to know what types of accounting methods they prefer and how they approach problem-solving. Just to get you up to speed, there are two main accounting methods: accrual accounting and cash accounting.

To sum it up, cash accounting records expenses and revenues when they’re received and paid, whereas accrual accounting records expenses and revenues exactly when they occur.

6. Will They Report to the IRS and other Tax Bodies? 

If you’re using an accountant to keep your finances and taxes in order, it’s important to know whether or not they can accurately report information to the IRS and other regulatory agencies. Anyone can keep your books in order, but only registered accountants can legally file taxes.

This often causes confusion, but bookkeepers and accountants aren’t the same, even though they perform many of the same tasks. Certified public accountants (CPAs) are also different from accountants. CPAs can represent a client in the event of an audit, but an accountant can’t.

7. What Technical Platforms Do They Utilize? 

An accountant should have access to the latest technology and be able to use the tools that you need. While an accountant can perform many of their tasks manually, you wouldn’t want them to. It’s simply faster for accountants to handle tedious payroll tasks with quality software tools.

At the very least, your accountant should know how to use QuickBooks, Xero Accounting, FreshBooks, Wave Accounting, Sage 50 Accounting, and any other software you need.

8. What Kind of Support Do They Provide? 

Although some accountants may only provide advice, others will provide additional services such as tax preparation, free accounting software, and other related tasks if necessary. If you want to find an accountant that can support all of your financial needs, write a good job posting.

For example, if you need your accountants to have financial reporting experience, state that plainly. If you want to make sure they’re a good fit, ask them to write a small (paid) test.

9. How Do They Communicate?

Finding out how your chosen accountant communicates is key to success. After all, some accountants would prefer to work alone most of the time, while others will welcome a lot of back-and-forth. If you and your accountant don’t get along, that will cause a lot of headaches.

You also have to check what communication channels they use. If they move around a lot or work out of a busy office, they probably don’t want to be called. Text and email works better.

10. When Can They Start?

Before you choose an accountant, make sure that you have an agreed-upon timeline for them to start work. At the same time, try to be flexible. You may need them right away, but if they’re the best accountant for the job, you can wait two to three weeks for them to give notice or prepare.

Don’t automatically take a long wait period as a bad thing. For example, if your accountant wants to give two weeks’ notice to their other employer, that’s a good sign they’ll do the same for you. If they can’t get to your taxes right away, they’re probably busy with other clients.

In Conclusion on Hiring an Accountant

These are some of the things to consider when hiring an accountant. The more knowledgeable you are about the process, the better off you’ll be in the long run. In the end, you should prioritize hiring an accountant who’s experienced, skilled, trustworthy, and communicative.