One Woman Shops can’t always do it all. But when it’s time to turn to an outside pro -- and be certain we’re choosing the right one -- we’re often at a loss as to what to ask to get the info we need. Welcome to Questions For A… a series where we interview the pros themselves on the questions you need to ask before hiring them.
In this month’s edition, we bring you Questions for an....Accountant with contributions from accountants Amy Northard, Taisha Stewart of Saidia Financial, Catherine Derus of Brightwater Financial, and Erin Johnstone of Vivid Numbers. Here’s what they suggest you ask, and why:
Q: What services do you offer? What services are included in my package?
Amy’s why: Just like specializing in different industries, accountants can specialize in different financial services. Make sure your needs (tax planning, budgeting, etc.) align with what they can offer.
Tai’s why: Clearly define the scope of services you need or won’t need because you don’t want to be charged for a service you don’t need, nor do you want to be unaware of what’s included in your accountant’s quote. Some accountants provide tax preparation as well as monthly bookkeeping services. Some process payroll (which can include 1099s). Some accountants provide quarterly review meetings with the client, while others only talk to their clients once or twice a year. You want to make sure that there are no surprise charges down the road. Know what to expect from your accountant and when to expect it.
Catherine’s why: An accountant may provide any combination of the following services: tax preparation and planning, business formation, bookkeeping, payroll processing, financial and retirement planning, cash flow and budgeting analysis, and more. If the accountant you plan on hiring doesn't provide a service you need, ask if they have recommendations.
Q: Do you have experience in my industry?
Catherine’s why: Different industries come with their own unique accounting and tax issues. Accounting for a food blogger (are you tracking food purchases for recipe development?) is different than accounting for a retail store (hello, inventory!), which is also different than accounting for a freelance writer (do you have all of your 1099's?). Your accountant should be aware of tax opportunities that relate to your industry.
Erin’s why: There are standard tasks in accounting and bookkeeping regardless of industry that any good accountant will understand. However, you'll get more value from someone not only familiar with your industry but who has experience in it as well. You are essentially paying for the knowledge the accountant can bring to the table so the more they already know, the better!
Q: How can you help me grow my business?
Catherine’s why: Businesses have several moving pieces and an accountant can help you see the big picture by assisting with a business plan. At the same time, they can provide suggestions on your pricing, improving cash flow, assessing whether to hire an employee or contractor, and other ways to improve your bottom line.
Q: What bookkeeping software do you primarily work with, and what is your preferred method of communication?
Catherine’s why: Gone are the days of schlepping a shoebox full of receipts and a folder full of statements to your accountant's office. Unless, of course, your accountant really wants you to! These days, accountants are using cloud-based accounting programs and file-sharing sites, emailing contracts and invoices, helping you track expenses with online receipt scanning, and communicating via Google Hangouts or Skype. When you have questions, figure out if your accountant prefers a phone call, email, or something else. When I work with financial planning clients, we have a set number of in-person or virtual meetings throughout the year, but I offer unlimited email support in implementing planning recommendations.
Amy’s why: Many accountants have a preference as to which bookkeeping software they use because they're most familiar with it. Familiarity means they can work more efficiently and offer advice if you have any problems with the software.
Erin’s why: We all know that communication is critical in business relationships, and it's no exception here. Look for someone who has the same preferred method of communication so it flows more freely and frequently. You can quickly become frustrated (and vice versa) if you always want to hop on Skype for a video chat but your accountant wants to respond with an email.
Q: Are you available during tax season?
Erin’s why: "Busy" season is a very real thing for accountants who also prepare taxes. You want to make sure your accountant will still have the capacity to assist you the first three and a half months of the year and not just go dark!
Q: What will your help cost me + how do you bill?
Amy’s why: Most accountants don't have detailed costs for their services listed on their website because client needs can vary so much. Ask about this up front so you aren't surprised with a big bill.
Erin’s why: Find out if you will be billed by the hour or if there will be a fixed fee. If by the hour, you will also want an estimate on what the fee will be. Along the same line of thought, you'll want to know exactly what you are getting for your money.
Q: What systems and processes do you have in place to protect my financial data?
Tai’s why: Your accountant will have access to the most private information you possess. You want to make sure that your financial statements aren’t just lying around for anyone’s eyes to see. Also, social security numbers, addresses, and other private details should be under lock and key or encrypted digital storage.
Q: How quickly should I expect deliverables to be available every month?
Tai’s why: Clear communication prevents misunderstandings. I was recently interviewing a new client whose main problem with his previous accountant was that he didn’t get information to him in a timely manner. Expectations should be outlined upfront to keep you happy and to also give the accountant the time necessary to make information available to you. For example: Will I be receiving my monthly profit-and-loss report by the 10th of the following month? Should I start to worry if I don’t receive it by the 5th? What deadlines can I expect you, the accountant, to adhere to?
Q: If I incur federal or state penalties for filing errors proven to be the fault of you, the accountant, will you reimburse me? And if so, how much?
Tai’s why: Again drawing from client narratives of past accountant relationships, an accountant is human and sometimes mistakes are made. If that accountant is filing tax returns (business or personal) or making estimated tax payments on your behalf and causes you to incur penalties or interest with the IRS because of neglect or oversight, what is their policy on resolving the situation? Perhaps they will reduce what they bill you. Perhaps they will pay part of the penalties.
Ready to grill (in the best way possible) your potential accountant? Print these questions out + have them at the ready when you’re looking to hire! And if you want pros we stand by, check out the One Woman Shop directory.
PS: Want more information from accountants on what to know before you hire them? Get the (free) Prior to the Hire ebook now!