The bigger you grow as a business, the less a drop in the cash flow bucket seems like…well, just a drop in the bucket. Because as your revenue grows, even minor fluctuations in wages or increases in supply costs can lead to a lowered profit margin and the cash flow problems that come with it.
This is why knowing the right questions to ask when hiring an accountant can be the difference between total peace of mind…and nights spent awake wondering where your numbers went wrong.
If you’re looking to find a new growth partner that takes the financial side of your business off your hands (while leaving peace of mind in its place), here are 10 questions you should ask before signing a contract:
What’s the scope of work you’ll be helping with? And does that scope support or not support my specific growth goals?
Some accountants will support you with data entry only. Others expect to take a more growth-centered approach, by performing complicated financial analysis and passing it your way in the form of easy-to-read reports.
While there’s technically no right answer when it comes to the kind of accountant you prefer (and the scope of work they provide), it’s important to be aware of the level of partnership you’ll be signing up for when saying “yes!” to their services.
2. What makes you qualified?
If you’re looking for someone to help with data entry only, you don’t need to seek out someone with a ton of educational qualifications. (Just asking about their attention to detail is enough.)
However, if you are looking for someone to help you understand your numbers and leverage those numbers to make major business decisions, you’ll want to ask about their degree and work history to ensure they have the right education to help you get where you want to go.
When every dollar and cent contributes to a higher or lower profit margin, each piece of advice when it comes to raising prices, how to do so strategically (to not lose clients/customers), and how to manage debt without hurting your profit becomes a factor that either propels or stagnates your growth.
3. Are you familiar with my specific industry?
There is a learning curve to every industry. As the business owner, you know the ins-and-outs of your brand, market, and niche. You need someone who can match that level of expertise, or catch on quickly.
Your time as a business owner is valuable. Which means sending out a revenue-raising question at 8am just to get a “I’m doing research on that, I’ll get back to you in a week” response is…not ideal. (To put it lightly.)
To see if your chosen accountant is familiar with your market, ask them to give a few examples of financial struggles in your industry. Or to give a list of references from businesses they serve who are similar to yours.
4. How do you communicate best?
This one might seem a little out of left field at first. But when it comes to hiring an accountant, you want to find someone who jives with your communication style.
If you live in your email and the person you hire is always calling you on your phone (or sending important tax questions by snail mail), this may cause some tension and frustration.
Finances are an important part of business ownership. And when all the dollars and cents quickly add up to growth or stagnation, you need someone who will be looking out for your name on their phone, computer, or your other communication style of choice, ready to answer your question no matter the way it comes through.
(One quick tip here: if they’re all about communicating via carrier pigeon, just run now!)
5. Will you be the person I actually work with?
If you’re interviewing an accounting firm/company, the person you speak to may not be the person who does the work. Or the person who you will be communicating with on an ongoing basis, for that matter.
You should have trust in any financial partnership you form. (And when it comes to an accountant who will be laying expert eyes on your dollars and cents — it is a financial partnership!).
Be sure to ask who you will be primarily working with so that you can set your expectations from the beginning. If the person you’re speaking to isn’t the one who will be involved in your work, ask to speak to your potential account representative before deciding if it’s time to sign on the dotted line.
6. What can I expect in terms of response times?
Accounting is not emergency surgery. I know it. You know it. But that doesn’t mean you should have to wait weeks to get answers to your questions about the dollars and cents of your business.
It’s important to have an expectation set of when you will hear back from any correspondence you send your bookkeeper.
You don’t need to find someone who is going to be waiting by the phone for your call, but you do want someone who will be quick to get back to you and answer your questions with ease.
7. What can I expect for delivery times?
It’s often misunderstood in the accounting industry that “month-end” financials are ready by the last day of the month.
To properly reconcile and review a month of information, bookkeepers and accountants generally need a week or two (depending on the amount of work and the rest of their client load). Setting this expectation from the beginning is important for the sake of both parties.
8. How will you protect my information?
Working with a bookkeeper is intimate. They have access to a lot of your financial information, and it’s important to know that the security of that information is just as important to them as it is to you.
Make sure they have a plan to keep your information secure. And make sure that you have 100% confidence in their commitment to following through on that plan as well.
9. How are your services priced?
Typically, you’ll find that accountants or bookkeepers charge either a fixed or hourly rate. While both are standard practice, hourly pricing structures can leave you with invoices that are higher than you budgeted for.
This is especially true if you consider your accountant more of a growth partner than just a data entry-focused part of your team.
Though the complex financial analysis that an accountant provides can set the stage for short and long-term goals that lead to increased revenue, that comes at a price when things work hourly.
So ask how your chosen accountant team tracks time, and set limits for each month (if you can) to ensure you stay within your budget while still getting the level of support you’re looking for.
10. Who owns the accounting software we’ll use: me or you?
Expecting the worst is different from proactively protecting yourself, your business, and your team.
There are horror stories of accountants holding information hostage after a bad breakup.
For this reason, be sure that you either own the accounting software (aka: it’s in your name) or the bookkeeper has it written in the contract that the software will be transferred to your name as soon as your contract ends.
The Takeaway: Why Knowing the Right Questions to Ask When Hiring An Accountant Matters
Of course, you want to like the people you work with. (Or at least feel comfortable sending off any question or request without wondering if they’ll ignore your name in their inbox.)
But beyond just liking the team you choose, it’s important to find an accountant team who is well up to the task on the strategy side. A team who knows that a single missed dollar in your data reports can lead to the kind of misinformation (not to mention tax implications) that holds back your growth, rather than fanning the revenue-growing flames.
So that when it comes to the financial side of your business, you feel fully taken care of. Not just during tax season. But every day of the week.