Whether you are looking for a CPA, a bookkeeper, or a tax preparer, you need to understand the cost, and what you’ll get for your money. Don’t expect a bookkeeper to do the job of a CPA and don’t expect your tax preparer to advise you on managing your business. (For more information on what the various roles of financial advisors are and what they do, see our post here.)
To ensure you get the level of financial advice you need, be sure that you properly vet your financial advisor and ask pertinent questions.
Some of the questions you should ask to help you hire the right bookkeeper, CPA or tax preparer for your business are:
What level of education do you have?
A bookkeeper may or may not have an accounting degree. Bookkeepers can manage just fine if they have taken a few courses, received on-the-job training with a previous position, or have a couple of years of previous experience. Their level of experience or training should match the specific job you are asking them to do. For example, if your business is a bakery, someone who kept the books for an auto mechanic may not understand your bakery business adequately.
An accountant, however, should be a degreed professional. Hiring a CPA ensures that they have the credentials and knowledge to handle more complex financial decisions that you need to make with your business. A CPA can advise the best methods to maximize profits, minimize expenses, and keep you out of trouble by explaining tax laws. Don’t hire a CPA to do your bookkeeping though. They will either be too expensive or will bail on you as soon as a position that fits their qualifications becomes available.
You should expect a tax preparer to understand the tax code. They should be current and understand any changes that have been legislated during the past year. They should know how these changes affect your business and counsel you as to any changes you should make for the upcoming year. However, don’t expect your tax preparer to give advice on your company’s financial health and to pay your bills. That is not what they were hired to do, and they should stick to their area of expertise — tax preparation and advice.
What do you enjoy about working with finances?
Regardless, of the specific position you are hiring for, you should find someone that gets excited about being able to find $3.12 in the account that no one else can balance. Your bookkeeper should not be someone that hates tedious data entry. If your CPA is just doing accounting until they save enough to buy an art studio, she may not be the best for your business. If your tax preparer has to be reminded to deduct your mortgage interest each year, he may not enjoy attending to details as much as he should.
Another aspect of financial services, which is true about any service business, is working with people. You don’t want to hire an accounting firm that sees clients as an interruption. If your accountant just wants to sit in her office and crunch numbers and won’t answer her phone or respond to emails, she may not be someone you’ll enjoy working with.
What services are included with the amount that I have paid you?
Will your accountant bill you for an hour of consultation every time you call and ask a question? Is there a 25 cent charge every time they print another form for you? You should ask if there is a price list of fees and additional charges. Some accounting firms will nickel and dime you with charges for every little detail they perform. At The Bottom Line, we charge an all-inclusive monthly retainer. The amount is based on the level of service you need.
What do you expect of me?
A good accountant will be happy to give you a list of documents he or she needs and figures you should pull from your bank accounts or invoices. It is probably not a good situation if your financial advisor that you just hired last month says you don’t have to do anything. They just want you to trust them with access to all your financial accounts and offer no explanations about why profits are up so little or even down.
You often read about companies that have been embezzled by unscrupulous financial advisors. I am not saying that you should be suspicious of everyone, but you should be careful about giving your bank account and credit information to a new accounting firm. Let them prove themselves and over time you can gradually give them more access to sensitive information.
The Bottom Line
Be sure you hire the financial advisor you need. You want to understand their qualifications, their fit for the work you’re asking of them, their pricing structure, and what part you will play in getting the service and advice you need. Guard your sensitive information until you are certain that your financial advisor is trustworthy and reliable. Even with a long-term advisor, you should still be involved in the financial side of your business and never just let your accounting be completely in the hands of another individual.
