Diana Rae CPA

5 Things to Think About

There is no legal requirement to engage an accountant when running a business. You can do all the tasks of keeping books, preparing your taxes, creating financial reports, and monitoring your cash flow yourself. However, there are some areas where an accountant can provide great value and guidance in managing your business. So how do you choose an accountant? What exactly can they do for you? And, if you already have one, are they giving you what you need?

1. The word “accountant” is not regulated and anyone who calls themselves an accountant does not necessarily have the skills and training that a member of a professional accounting body requires. Bookkeepers and self-taught financial managers can advertise themselves as accountants and prepare your financial statements and do your taxes but it does not mean that they necessarily have the qualifications or the training required. Does your accountant have a designation? In Canada, there are three professional accounting organizations that require their members to have a certain level of training and skills as well as to adhere to a stringent professional code of conduct – Chartered Accountant (CA), Certified Management Accountant (CMA), and Certified General Accountant (CGA). These three are currently being amalgamated into one unified body, Chartered Professional Accountant (CPA).
2. Does the accountant have a current client base and do you know what areas he or she specializes in? Some focus on payroll services for companies, some specialize in cross-border multinational corporations, some like to concentrate on small business. You want an accountant who has a track record and lots of experience in your line of business. A very small client base may indicate that the accountant is just starting up and hasn’t been in practice long. A large client base might mean he or she will be far too busy to really look after your needs. Ask your prospective accountant what kind of client base they have and if he or she has a designation as a CPA.
3. Some accountants are so busy with their practice that they do not keep current with the latest software for small to medium businesses and non-profits. Or they only use one kind of software because that is what they’re used to and advise their clients to use. Although most accounting software has the same basic accounting functionality, some have advantages over others. For example, one accounting software product, such as Intuit QuickBooks™, has superior custom reporting ability and intuitive user interface. Sage™ (formerly Simply Accounting) is generally preferred by public practice accounting firms for their clients because of its solid ledger-based capabilities. Both are excellent programs and meet different needs for different clients. Your accountant should be able to assess your needs and recommend a software program that suits you best, not what suits them.
4. Does the accountant bill you by the hour or do they have service packages that bill you monthly for a certain set of tasks? What kind of rates do they charge for different services? There’s nothing worse than getting a big bill from an accountant at the end of the month that blows your budget! If you just need payroll and can handle the daily bookkeeping data entry yourself, will they offer just that service? Maybe you just need a couple of hours for some advice on your business performance and goals. Be clear about what you need and ask them to be clear about what they can provide.
5. Do you like the accountant? Just like a doctor, if there is no bedside manner, the relationship is going to be difficult! You have to like, respect, and most importantly trust your accountant. You need to be able to build a good rapport with your accountant, because even if he or she is the most qualified and reputable accountant in your area, you can’t underestimate the importance of your relationship with your trusted adviser.