The simplest answer to how you should select a good accountant is: “Pick me!” However, since the goal of this article is to offer useful advice, let’s dive into some essential criteria for choosing the right accountant for your business. Before we explore what makes a great accountant, it’s important to understand why you need one in the first place—whether good or not.
Why You Need an Accountant
At a minimum, you’ll need an accountant to help prepare your tax returns. The tax authorities view your business as a series of income and expense transactions, and your accountant ensures these are reported accurately. Unless dealing with tax laws happens to be your hobby, hiring a professional to navigate this complex field is a smart choice. This is where the need for a good accountant really begins.
Beyond taxes, government compliance is another key reason to work with an accountant. Your business must submit reports—such as sales tax or payroll tax forms—on a regular schedule, following strict guidelines. Failing to do so can result in fines and penalties. If you don’t have a passion for completing regulatory paperwork, it’s best to leave it to someone who deals with it daily.
It may feel like hiring an accountant is necessary just to avoid financial penalties from the government—and to some extent, that’s true. Many independent business owners struggle with the burden of tax reporting, especially since small companies are often required to submit reports comparable to those of much larger enterprises. The challenge is meeting these demands with fewer resources.
The Benefits of a Good Accountant
A good accountant does more than just help you meet government obligations. They become a trusted advisor who helps you manage the financial health of your business. That brings us to the first major quality to look for in an accountant: clear communication. It’s essential that both you and your accountant understand each other. A good accountant will explain financial concepts in simple terms, helping you make informed decisions. Look for someone who takes an active interest in your business and with whom you feel comfortable building a rapport.
Next, ensure that the person you initially meet will be the one you interact with regularly. Ask how communication will be handled—will your calls be returned within 24 hours? While you can’t expect 24/7 availability, timely responses are reasonable and necessary.
Timely Information Delivery
For accounting information to be useful, it must be delivered promptly. Find an accountant who can commit to a schedule, ensuring you receive reports shortly after the end of each month or quarter. For example, monthly profit and loss (P&L) reports should ideally be in your hands within 10 days of the month’s end, while quarterly reports should arrive within 20 days. Annual reports should be completed within 45–60 days. To manage your business effectively, it’s recommended to review financial data every 30 days. A reliable accountant will not only stick to these deadlines but will also help you prepare the necessary information to meet them.
Prioritization and Expertise
It’s important to assess how your business fits within the accountant’s client base. Accountants prioritize their largest clients since they generate the most revenue. If your business is the smallest on their roster, it might be difficult to receive the level of service you need. Look for an accounting firm that focuses on businesses of your size.
Also, consider the accountant’s expertise. While education matters, experience in your specific industry or with businesses of similar size is often more valuable. Practical knowledge gained through years of work can sometimes outweigh a list of degrees.
A good accountant should also be able to seek help when needed. No one person knows everything, especially in tax law. Ensure your accountant has a system for consulting other experts when specialized advice is required.
Transparency in Fees
When selecting an accountant, clarity about fees is essential. Make sure you understand exactly what services are included and how often they’ll be provided. Be wary of vague promises like “We’ll do everything for you” or “The tax return is included in the price.” No one can truly handle every aspect of your financial needs, and bundling services can create conflicts when deadlines overlap.
Additionally, avoid accountants who offer to prepare your tax return for free—if they don’t value their work, you probably shouldn’t either.
Look for accountants who base their fees on both the time required and the quality of the information you provide. Many charge by the hour, which can make sense initially, but it’s important to establish a clear understanding of what the total cost is likely to be. Agree in advance on what constitutes “extra” work and how additional fees will be handled. If unexpected tasks arise, you have the right to approve any increase before the work begins.
Managing Fee Changes
Understand that fees may increase over time for two reasons: inflation and increased workload. Like any business, accountants must adjust their prices to account for rising costs. Additionally, if your business grows and requires more work, fees will reflect that. Knowing how your accountant calculates fees will help you anticipate future changes.
When comparing fees, don’t focus solely on price—compare the level of service you’ll receive as well. The cheapest option may not provide the value you need, and investing in high-quality service often pays off in the long run.
Final Thoughts
To select the right accountant for your business, keep the following key points in mind:
- Clear communication: Choose someone you can easily communicate with and who explains things in terms you understand.
- Problem-solving ability: Find someone who can address issues independently or has access to reliable experts when needed.
- Prioritization: Make sure your business will receive the attention it deserves.
- Value for money: Look for an accountant who provides quality service at a fair price.
Good luck with your search! With the right accountant, you’ll gain not only peace of mind but also the financial insight to take your business to the next level.