How to Hire an Accountant

Follow these steps to find a professional to help navigate the maze of tax issues facing your startup.
How to Hire an Accountant

Every dollar counts for business owners, so if you don't know where you stand on a monthly basis, you may not be around at the end of the year. And while using do-it-yourself accounting software can help monitor costs, the benefits of hiring good accountants extend far beyond crunching numbers. Potentially, they can be your company's financial partner for life, with intimate knowledge of not only how you're going to finance your next forklift, for instance, but also how you're going to finance your daughter's college education.




Choosing an Accountant
The best way to find a good accountant is to get a referral from your attorney, your banker or a business colleague. You can also check in with the Society of Certified Public Accountants in your state, which can make a referral.

While accountants usually work for large companies, CPAs (certified public accountants) work for a variety of large and small businesses. Don't underestimate the importance of a CPA. This title is only awarded to people who have passed a rigorous a two-day, nationally standardized test. Most states require CPAs to have at least a college degree or its equivalent. Several states also require post-graduate work.


Accounting services can be divided into three broad categories: recording transactions, assembling them, and generating returns and financial statements. Although the first two categories require a lower skill level than the latter, many firms charge the same hourly rate for all three. This is why it's important to determine exactly what work you want an accountant to handle.


  1. Services: Most accounting firms offer tax and auditing services. But what about bookkeeping? Management consulting? Estate planning? Will the accountant help you design and implement financial information systems? A CPA may offer services that include analyzing transactions for loans and financing; preparing, auditing, reviewing and compiling financial statements; managing investments; and representing you before tax authorities.

    Although smaller accounting firms are generally a better bet for entrepreneurs, they may not offer all these services. Make sure the firm has what you need. If it can't offer specialized services, it may have relationships with other firms to which it can refer you to handle these matters. In addition to services, make sure the firm has experience with small business and your specific industry.

    When evaluating competency and compatibility, ask candidates how they would handle situations relevant to you. For example: How would you handle an IRS office audit seeking verification of automobile expenses? Listen to the answers and decide if that's how you would like your affairs to be handled.

    Realize, too, that having an accountant who takes a different approach can be a good thing. Just be sure that the accountant doesn't pressure you into doing things you aren't comfortable with.
  3. Fees: Ask about this upfront. Most accounting firms charge by the hour with fees ranging from $100 to $275. However, others work on a monthly retainer. Get a range of quotes from different accountants. Also try to get an estimate of the total annual charges based on the services you have discussed.

    Don't base your decision solely on cost, however, as an accountant who charges higher hourly rate is likely to be more experienced and able to work faster than a novice who charges less.

    Also be sure to ask for references -- particularly from clients in your industry. Call them to find out how satisfied they were with the accountant's services, fees and availability.

Make the Most of the Relationship

Also, hold up your end of the agreement. Don't hand your accountant a shoebox full of receipts. Write down details of all the checks in your check register, whether they are for utilities, supplies and so on. Likewise, identify sources of income on your bank deposit slips. The better you maintain your records, the less time your accountant has to spend and the lower your fees will be.



Asking the Right Questions

Here are ten critical questions to ask when interviewing an accountant:

 1. Are you a CPA? (Don't assume every accountant is.)

 2. Are you licensed to practice in your state?

 3. When and where did you receive a license to practice?

 4. Where did you go to school, and what degrees did you earn?

 5. Who are some of your clients? (Call them.)

 6. In what area do you specialize?

 7. How big or small are your clients, and what size were they when you began your relationship with them?

 8. How accessible are you? (Some accountants are only available during business hours; others will give you their home or pager number.)

 9. To what professional organizations do you belong? How active are you in those groups?


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