Helaine Olen (@helaineolen) is a
veteran personal finance journalist, the author of
Pound Foolish: Exposingthe Dark Side of the
Personal Finance Industry, and the
co-author of The Index
Card: Why PersonalFinance Doesn’t Have
to Be Complicated.
Find the Perfect
Do you love your accountant? These five questions can help you meet your match.
roy Hazard, a serial entrepreneur and consultant
based in Fort Lauderdale,
Florida, figured he needed
a new accountant when
he realized the advice was
flowing the wrong way.
“Come tax time, I’d say, ‘We
haven’t talked about this
sort of planning or that way
to structure a family trust,’
says Hazard, who’s started
and invested in businesses
in real estate, marketing,
Funny, but true. A good accountant is vital to the success of
almost all businesses, advising on everything from tax strategies
to cash-flow issues. Hire the wrong one, and you’ll be in deep
trouble. “If your accountant isn’t on the ball, you don’t know
how to steer your company,” says Jennifer Myers, a financial
adviser and the president of SageVest Wealth Management in
Almost half of all small businesses have changed accountants at least once over the course of their existence, according
to a 2014 survey by Accountex. The most common reason for
making a switch: the need for more proactive advice. So what
questions should you ask to know if your business is in the right
hands—or if it’s time to make a change?
DOES THE SHOE FIT? Many accounting firms—especially smaller
shops—specialize in particular industries, or in companies of a
certain size. So the accountant who handled your individual
return might not be the best one to do your corporate taxes; the
person who advised your startup in its early days might not be
able to keep up if you hit a hot streak.
“Ask what size businesses your accountant works with, the
range and the average,” advises Myers. “It’s critical to know if
your accountant has the experience to grow with the business—
or if you’re too small a potato to get attention.”
IS IT A FOREIGN AFFAIR? If you do business internationally,
you’ll need an accounting firm with global expertise. When
Hazard moved from his native Australia to the United States,
he hired an accountant back home who claimed to be an expert
in international business. Hazard soon learned otherwise—a
mistake that helped cost him an estimated $60,000. “I need
someone with clarity on international tax codes, how to deal
with multiple countries, and how to manage the relationship
between the IRS and the Australian Taxation O;ce,” he says.
DOES HE OR SHE WATCH THE NEWS? Keeping up with regulatory
changes—and the most sweeping tax overhaul since 1986—is
a big task for small-business owners, and one that you’ll need
expert help with. Deborah Sweeney, the CEO and owner of
MyCorporation.com, an online legal filing and incorporation
service based in Calabasas, California, says that after the
recent tax law passed, her accountant raised the topic at their
quarterly meeting. “We had a lot of discussions about how we
adjusted,” she says. If your accountant hasn’t raised this issue
with you yet, you might want to think about a change.
HOW ARE THIS PERSON’S REFERENCES? Lynn Gastineau, the
founder of Gastineau Log Homes in New Bloomfield, Missouri,
says a former in-house accountant made such a mess of her
books that another employee easily embezzled funds. She now
hires only those accountants who have been vetted by other
business owners. “Hiring someone you trust will make it easier
for you to start delegating faster,” she says.
If you are using a certified public accountant—the highest
designation—check on him or her with the national and local
chapters of the American Institute of Certified Public Accountants, and look for any disciplinary actions taken by your state’s
board of accountancy.
IS HE OR SHE A GOOD TALKER? Accountants should respond
promptly when you reach out, and treat even basic questions
with respect. If you’re walking on eggshells around yours,
that’s a sign you aren’t a good match. Finally, there are no
excuses and no second chances for an accountant’s missing
a deadline or making other filing mistakes. After all, the IRS
won’t give you one.