5 Things To Consider When Choosing An Accountant

My team makes fun of me for the phrases I repeat consistently. Specifically, I get teased for the term “blazing a trail.” But, as small business owners and entrepreneurs, we have to believe our businesses are blazing a trail. If we are doing the same thing in the same way as someone else, we are not going to succeed. So naturally, “blazing a trail” comes up often in my lingo. 

During the process of blazing my own trails, I’ve learned that foundational hires are pivotal for the success and growth of a business. An accountant is one of those hires that can direct your success.

I am an accountant who has started multiple accounting firms, and I still think it is a difficult task to find a good accountant. Of course, good talent, in general, is always hard to find. I’ve made mistakes, but more frequently, I’ve entered situations where the mistake has already been made, and the owner I am working with is trying to rectify the situation. 

The Hope: Great Financial Practices

Financial mismanagement derails great products or services. Businesses of all sizes often fail, not because of their service, but because of their financials. Good financial practices bring insight and clarity. Great financial practices, however, direct. They transform your decision-making, goals, and story. Great financiaI practices take expertise, business knowledge, and time. They are not achievable by an accountant alone, but by multiple levels of accounting. I’ve written this blog to help steer entrepreneurs toward considering the right things when hiring an accountant, and taking a step toward great financial practices. 

1. Change Your View on Accounting

Most business owners’ barometer for good accounting is the accuracy of their books; however, the financial function of your business needs to be more robust than a bookkeeper. Otherwise, your business is not doing everything it needs to do to get ahead. 

The questions you should ask yourself to take steps toward great financial practices are: 

• Are my financial statements informing my decisions proactively? 
• Do I know how to leverage my financials to tell the story of the current state of my business in real time?
• Do I know the financial goals I am setting are realistic? 
• Are my accounting technology and practices driving efficiency? 
• Do I have confidence in the accuracy of my financials? 

These yes or no questions will help you understand the needs of your business in the accounting function. 

2. Hire for Tomorrow

A common mistake I see business owners make in the early stages of building their business is not planning for the future. This is because their view on accounting is limited, as I referenced in step 1. Don’t just look for the cheapest or easiest solution for your accounting needs.  Look for the right partner that has the experience to help you scale your business by implementing the right processing and technology solutions.

Ask yourself, as you grow will you need more than simple bookkeeping? When you realize the answer is yes, start searching for that candidate or service. Most companies start considering strategic guidance too late. They hire the cheapest bookkeeper, and by the time they feel the need for more financial clarity, it’s too late. 

Best practices and strategic guidance should start EARLY. Optimizing these processes can take a few months, but if you have to rectify the processes of previous shoddy bookkeeping, then it will take a lot more effort. The best practice is to hire for tomorrow, without just hiring a full financial team. Hire outsourced advisors or part-time employees to begin building best practices early. 

3. Experience Matters, Credentials are Overrated

When it comes to choosing the right fractional accountant for your business, I believe the CPA designation is a bit overrated.  As a CPA and someone who has worked as a fractional CFO for years, I don’t believe my CPA credential is all that relevant to my day-to-day work and the value I provide to my clients.  It is far more important that your tax accountant is a licensed CPA than it is for your fractional Controller or CFO.   Many fractional Controllers and CFOs let their CPA license expire when they leave public accounting. 

A similar experience is the best thing an accountant can bring to your business. An accountant that knows your technology and business type is the ideal candidate. This will increase their efficiency and allow them to close books on time. Before starting the search, know the technical parts of your accounting. Do you do deferred revenue, commission tracking, inventory reconciliation, etc.?  Know how your books operate and compare that to candidates’ experience. The top 4 things I look at when it comes to experience are:

• Areas of focus
• Industry experience
• Experience with entrepreneurial companies
• Experience with high-growth companies

4. Follow the Breadcrumbs

Unless you are hiring an accountant straight out of college, they should have experience working with clients. Call their references and former clients. Were they satisfied with their work and/or communication? What impact did they have on the business? Were they responsive? 

This is one of the best barometers of their success in your business. Ultimately, candidates put on their best face for interviews and resumes, but history highlights the truth. 

5. Will your business be a priority? 

The truth is part-time or fractional accountants typically have multiple clients they are handling. Ask about your prospective accountant’s clientele and how they will manage multiple requests. My advice is to pick accountants or accounting firms who earn most of their revenue from businesses similar to your size or slightly larger. They will not only have the infrastructure and expertise to guide your business, but they will also prioritize your business as opposed to much larger clients. 

Accountants also frequently over-commit themselves. An unresponsive accountant is extremely frustrating. Drill down early on communication and capacity. The best fit is someone who has the workspace to take you on and grow with your business. 

About the Author:

Tom Gabbert CPA – Founder/CEO of Milestone Business Solutions

Tom Gabbert has been a pioneer and thought leader in the outsourced accounting industry since 2003. He is a successful entrepreneur who loves helping fellow entrepreneurs realize their dreams. Tom understands the unique challenges of starting, growing, and exiting a business. Not only has he done it twice himself, but he has guided numerous clients over the years through successful exits. Along the way, Tom has also helped his clients raise over $250M in growth capital (seed, Series A, Series B). He has a unique background that combines extensive financial and operational experience with a proven track record of client success.Tom is a Certified Public Accountant and holds an undergraduate degree in Accounting from the University of Notre Dame.