As business owners, we share one common goal – growing our business. Although you may be an expert in your field and you have an all-star sales team, your full time CFO is crunching numbers in the back without letting you know what exactly your current financial status is. Even though you are winning bids right and left, are you sure that you will be able to afford to do the labor? If this makes you think twice on who you’ve hired as an accountant, here are some guidelines for choosing your next one.
Knowledge Depth: Before hiring any CPA or CFO, always do research on their qualifications. Keep an eye our for CPA licenses from other countries, simple software certifications, and MBA Diplomas in unrelated fields. A candidate may be a P.H.D. from Harvard, but that doesn’t make them a financial expert. Beware of firms that offer “CFO Services” but DO NOT know accounting! They will come in and take responsibility for administration of your accounts and deadlines, but will not be able to advise you on how to meet your financial goals.
Business Accounting Familiarity: Because accounting is very much a broad umbrella encompassing bookkeeping, taxes, auditing and more, the majority of accounting firms prefer to specialize in one of the above in order to not deal with “tedious headaches”. For example, as business owners, it does not make sense to hire a tax accountant as they do not deal with the preparation of financial statements should you need assistance obtaining business working capital. Business accounting requires more sources of revenue and expenses to account for and depending on the complexity of your industry, it is an entirely higher level of accounting.
Integrity: Sometimes, we have the misfortune of running into legal dilemmas. Is your current accountant sweeping things under the rug saying they will take care of it to keep you as a client? Should you choose to hide things, it is your company at the end of the day and you will be the one held accountable. Your accountant’s first reaction should be to follow the regulations to fix the problem immediately, no but’s about it. If you insist on trying to find a way around it, they will more than likely discontinue your relationship.
Risk Awareness: It is one thing for your accountant to be bending over backwards for you. It is another for them to be breaking the rules and regulations of the IRS. Don’t be unfair to your accountant by asking them to find a way to consider your trip to Jamaica a business expense. The rule of thumb is that anything you do, whether it is purchasing a tablet or whether it is taking a potential investor out to lunch, must be for the purpose of business. Even if your accountant says they’ll do anything for you, an external company will come in and audit you to find out the truth.
Continuous Communication: Whether it is weekly, bi weekly, or monthly, you should be checking in with your accountant on how your company is doing. This does not mean just a numbers update. Any red flags like excessive bank fees, missing client collections, or late payments should be brought to light. If you are thinking of taking on a new venture such as starting another company or being acquired, ask your accountant whether or not this makes financial sense. If you feel your employees are not as productive as they could be, ask your accountant for suggestions on some policies and procedures.
All in all, your accountant should be considered your business partner if they are not already. They are essentially your second pair of eyes that you can count on to lead you in the right direction.