Proper handling of finances is important in any company, but for mid-size businesses it is especially critical to the longevity of the business. Bookkeeping and staying on top of financial issues can be time-consuming and overwhelming. Audit requirements and tax laws are intricate, confusing, and tend to change frequently. Making even a small mistake in submitting your audited financial statements or filing your taxes can result in big penalties that could devastate a mid-size business. Hiring an accounting firm can help you avoid costly mistakes and improve the financial function of your business.
An accountant does much more than just handle your bookkeeping or file your taxes. A good accountant will act as a consultant and business advisor. They will advise about improving your internal controls, financial planning, risk management, growth opportunities and help you develop your big-picture strategy. If your personal finances are closely tied to your business, your accountant can also help you make decisions that will benefit and protect both your personal finances and your business.
Choosing the right accounting firm is a crucial decision. You will be trusting this firm with the financial future of your business. There are several steps you can take to help you select an accounting firm with which you can develop a successful long-term partnership.
Determine your needs
Not all accounting firms are the same. Different professionals offer different levels of service and different firms have different specialties. Decide on the level of support and what services you need. From there, look for a firm that specializes in small businesses and has experience in your particular industry.
Ask for recommendations
Word-of-mouth is a great starting point to finding an accounting firm. Ask trusted business colleagues, family members, and friends for recommendations. You can also check with your local chamber of commerce, state board of accountants, or the American Institute of Certified Public Accountants. Use the Internet to check credentials of firms you are considering.
Interview multiple firms
Submit requests for proposals and interview more than one firm. Clearly define your needs and expectations. You should think of selecting an accounting firm the same way you would think about hiring an employee. Questions you should ask include:
- What services do they offer?
- What are their professional qualifications and experience?
- Do they have any professional certifications?
- Who will be servicing your account? Will it always be the same person or will it change?
- Who do you call with questions and how quickly can you expect a response?
- What is their communication style and frequency?
In addition to ensuring they meet your current needs, you should also inquire about services that you might need in the future. You don’t want to select an accounting firm that you will outgrow right away.
Ask for references and referrals
Ask about both current and past clients to gauge their expertise and experience, especially in your industry. Look at client turnover and seek a firm with long-term client relationships. Contact references and ask lots of questions.
Look beyond fees
You may be tempted to look for the firm with the lowest fees, but going with the cheapest accounting firm is not always the best choice. The firms that provide high quality service or a broad range of services tend to charge higher fees. If an accountant makes promises that sound too good to be true, they probably are. Keep in mind that you are ultimately responsible for your taxes and finances, so choose an accounting firm that is capable and credible.