It’s that time of year again. A number of my clients are ready to fire their accountant and find a new one. Why is this a recurring event?
I’m not an accountant, but my experience tells me there are two reasons. First, accountants speak a slightly different language than most business owners. They speak Tax Accounting. When it comes to the numbers, most of us speak Managerial Accounting or some other financial dialect.
Second, the business owner often fails to make his or her expectations of the accountant clear. As a result, they do not receive the accountant’s commitment to meet those expectations (or, if they do and it’s received verbally, there is still no real understanding).
Here is a short checklist of questions to review with any firm proposing to be your accountant:
- Ask them to describe their tax expertise and their experience relevant to your business.
- Ask what kind of proactive planning they would provide (assuming you want more than tax preparation services), and how soon that first plan would be prepared.
- If you want an accountant that is really aggressive in doing your taxes, or really conservative, tell them so and ask whether that is a problem.
- Ask for a reconciliation of both the income statement and balance sheet for the differences between the tax accounting books and your management accounting books. Be clear about whether you want this reconciliation monthly, quarterly, or annually.
- Ask how long it will take them to respond to a phone call or email from you.
- Ask who your primary contact at the firm will be. When they are not available, who is the backup contact?
- Of course, ask for their fee. Explore whether they have a “preferred client” status (and fee) where they return phone calls in minutes rather than hours or days. This might give you an insight into their culture as well as their fee structure.