- Keep your company's finances running smoothly
- Meet your tax obligations properly
- Watch for unusual or improper financial transactions
- Avoid tax audits
- Do long-range financial planning for your business
Action Steps
The best contacts and resources to help you get it done
Get recommendations or locate an accounting pro online
Referrals are an effective way of finding an accountant in your area. Ask business associates, your banker, your financial planner or your lawyer. You might also want to get referrals from accounting associations or online databases.I recommend: For online searches try Accountants World or CPA Directory.
Decide what services you need
Start your search with a clear picture of what you want your new accountant to do. If all you need is help filing your taxes, you may need no more than a tax preparer. But if you're like most business owners, you'll benefit from an accountant who can prepare financial statements, conduct audits and perform other financial chores.I recommend: See "Working With Your Accountant" for a discussion of business financial tasks, including those you might want to do yourself and others you would likely want to have an accountant do.
Interview candidates
Once you know what types of services you want, start lining up candidates for interviews. It's a good idea to interview several candidates so you can compare services and costs. Your ideal candidate should not only know accounting but also should have some familiarity with your type of business. You also need to find someone you feel comfortable sharing your finances with.I recommend: For help in interviewing candidates, see SCORE's list of essential questions you should ask. Inc. Magazine provides additional tips for the interview process.
Get written estimates
You want to hire the best accountant you can, but also stay within your budget. Accounting fees vary widely, depending on the size of the firm, the expertise of the accountant and the level of service. Once you have all your written estimates, evaluate and rate them.I recommend: Most spreadsheet programs, such as Microsoft Excel, can be used to create a grid for evaluating various aspects of the estimates you receive. Try to rate each candidate in specific areas and then give each one a final score.
Sign an engagement letter
When you've decided on an accountant, you'll most likely enter into an agreement for services called an engagement letter. This document, usually drafted by your accountant or CPA, sets forth what services will be provided and at what cost. Some smaller accounting services still operate on little more than a handshake agreement. An engagement letter is more typical today. Be sure you read and understand the contents of the engagement letter and that you agree to the terms and conditions.I recommend: The Oregon Society of CPAs has a helpful discussion of engagement letters, including what they are and why an account will ask that you sign one.
Tips & Tactics
Helpful advice for making the most of this Guide
- Take your time: Don't feel rushed into making a decision that you'll regret later. Take a week or two to do a thorough search.
- Join a club: One good source of referrals is by networking through a local service organization like a rotary club or a chamber of commerce.
- Do it yourself: You can save money by doing some accounting functions yourself or by hiring a basic accountant instead of a Certified Public Accountant, who has a higher level of training. Be sure your bank loans don't require a CPA.
- Review your engagement letter: Things change, and so do businesses. Review your engagement letter periodically to see if it needs to be revised to reflect changes in your situation.
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