Bookkeeping and accounting are core functions of your small business. Yet, they are tasks that few small business owners relish, or that they have the time to handle on their own. For many small businesses, hiring an accountant is the first bit of outsourcing or employee hiring that they do.
Your choice of accountant matters. A good accountant can save you thousands of dollars at tax time, while an unqualified accountant can get you in deep trouble with the IRS or with the state.
Here are some warning signs that the accountant you’ve hired may not be the best choice for your business:
1.) Your accountant doesn’t return your phone calls, or doesn’t return them in a timely manner.
2.) Your accountant returns your phone calls at 3 AM and mistakes you for an ex.
3.) Your accountant blows your tax deadline.
4.) Your accountant lacks certain credentials.
5.) Your accountant makes up credentials.
6.) You’re constantly getting past due notices.
7.) Your accountant doesn’t ask you to review statements and tax returns.
8.) Your accountant asks you to help balance his personal checkbook.
9.) Money starts going missing.
10.) Your accountant has gone missing.
- Qualifications. Find out whether they’re certified and where they went to school. Verify both of these pieces of information.
- Experience. It’s not enough to look at a list of former employers or clients; you need to verify some of that experience. Be wary of any potential accountant that can’t provide you with multiple references.
- Personality. This one is, of course, more nebulous. You need to find an accountant you’re comfortable with, who seems to understand and be interested in your business, and who engenders trust. This is, perhaps, the hardest area of qualifications to meet.
You’re paying your accountant for her time. If you have to leave more than one or two messages to get a call back, you should be worried. We’re not talking about a single incident or two, of course, but rather a pattern of behavior.
While your accountant is as human as the next person, if he’s unable to distinguish between a client and the former girlfriend who dumped him for his boss, you’ve got a problem.
The reason you hire an accountant is to be on top of the aspects of your business that you can’t or don’t want to be on top of. Certainly, there are exceptions; if your accountant has been asking you since January for receipts or other records and you don’t produce them until April, it’s probably your own fault. But if she’s constantly late on your tax filings – it’s time to find a replacement.
It’s easy enough to verify whether someone is a CPA, or some other certified financial professional. If they claim to have a credential that can’t be verified, you should be suspicious.
If he tells you he’s president of the Association of Tax Professionals Association, you should be very suspicious.
If your accountant is responsible for your Accounts Payable, you shouldn’t be getting past due bills. If the past due bill is from the IRS – see #3 above.
Having a trusted employee that can handle your financial tasks is one thing, but that trust has to be earned. If she’s out there making financial decisions without your direct review or approval, you’re in danger.
If he can’t figure out where that $2.68 went, imagine what’s going missing from your business.
A mastermind thief might be able to embezzle money from your business for years before you’re aware of it. Most accountants aren’t mastermind thieves – especially if they’re working for small businesses. There are some that aspire to the title, however. It’s always worth having someone else review your financials from time to time, just to make sure that your accountant isn’t skimming some off the top.
It happens more than you think. Your bank account balance suddenly drops dramatically, and your accountant is nowhere to be found. There are con artists out there that would love nothing more than free reign over your business’ checking account.
Ultimately, it’s up to you to pick the right accountant. When you’re considering an accountant (or any other financial professional) you need to look at three specific areas:
Don’t put your business at risk by hiring an unqualified or unscrupulous accountant. Look for the warning signs, and don’t be afraid to let someone go if they’re not meeting your standards. After all, the future of your business depends, in part, on reliable accounting.
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