While accounting software for small business has certainly come a long way, a sharp accountant is still crucial to your business and personal financial success.
Take your time and do some careful research before hiring an accountant. A good accountant is an invaluable partner to your business. They can help you navigate important business decisions, such as whether or not to incorporate your business or help you decide if you can afford to expand into a new market.
If you’re happy with your accountant don’t switch, but if you are unhappy, if you are using your Dad’s accountant or your wife’s friend’s bookkeeper because “she is nice” and struggling to understand how they work, or why your results aren’t optimized – find someone else. In addition to preparing your business taxes, the right accountant can provide excellent advice and guidance as your business grows over the years.
So how do you tell who is good? How do you choose?
The following tips can help you navigate the process of choosing the right accountant who can not only help should your business fall under the CRA’s scrutiny, but also assist with big-picture business planning and financial projections.
As you would interview several candidates before hiring a new staff member or a business manager, be prepared to meet with and interview several accountants before choosing the one best suited to your needs and preferences.
Prepare questions in advance of your meeting with a potential accountant. Here are a few example questions to help get you started:
- Are they a designated Chartered Professional Accountant? Keep in mind that a bookkeeper or financial adviser, while helpful, won’t be able to provide the same advice and expertise as an accountant. All CPAs must meet specific education and experience requirements and successfully pass a final examination. In addition, CPAs should maintain registration within their respective provincial CPA membership program, which requires annual completion of continuous professional development training.
CA, CGA, CMA, or CPA? What’s the difference and does it matter? In 2013, the different designations merged under a single designation: Chartered Professional Accountants (CPA) . Unifying the different designations aimed to provide greater clarity and simplicity in oversight to the Canadian accounting industry.
- How does billing work? Your accountant should be able to provide a breakdown of fees and explain how billing rates are calculated. For example, if you ask a quick question by phone or email, does the accountant bill for phone or email advice?
- How familiar are they with your business-specific accounting needs? Does the accountant have an understanding of your business and personal situation? When interviewing potential CPAs, discuss the services they regularly provide and ensure your accountant has relevant expertise and experience in the service areas your business requires .
For example, if you conduct business online, you will want to ensure your accountant is familiar with the ins and outs of ecommerce. Or, if your business operates in other countries — even if just periodically — you will need an accountant who is familiar with international taxation issues. Thinking about exporting? A good accountant should be able to help you develop an export strategy.
- Be clear and realistic about your expectations; When it comes to a good accountant, what qualities or measures of success are important to you? Maybe you want an accountant who will aggressively seek out tax-saving opportunities. Or maybe you want someone who will help you develop strategies for securing financing to expand your business or provide start-up counseling and help with the purchase or sale of your company.
- Get those receipts out of the shoebox! Keep accounting costs down by avoiding the costly mistake of paying an accountant for simple data-entry tasks, such as tracking expenses and revenues. Use bookkeeping software (check to see if your accountant has a compatible system) to enter basic account data and invoicing so that your accountant can dive into the more complex tasks , such as bank account reconciliation, business tax returns, and payroll or capital depreciation calculations.
- What’s the preferred mode of communication? Is your prospective accountant comfortable with digital communication like texting or email? Or do they prefer to communicate in-person or by phone? Think about your own day-to-day operations and consider how important accessibility is to you. You’ll want to ensure that communication is easy for both of you.
- Think about both your short- and long-term goals for the business. Investing time and energy in building a strong and lasting relationship with your accountant is something that can benefit your business for the long haul.