Last week I was asked by a life coach how she could find an ideal accountant for her business, how she should go about it and what to look for before hiring.
This is a great question and a quick google search of “how to find an accountant” revealed 115,000,000 results – looks like she is not alone in her inquiry. I will list a few good articles further down but first I would like to explore with you what it could mean for you not finding the ideal accountant:
Why you need an ideal accountant
Your ideal accountant can be the pivotal point whether or not you and your business succeed.
Usually, every time I mention finances and taxes, people cringe. I hear it over and over how you’d rather go to the dentist than to your (or any) accountant. Just the thought of it makes you sweat or freeze, depending on your physiology. You quickly find another, way more important and pleasant, thing to do (like scrubbing your dirty toilet with a toothbrush).
Another positive effect of having a trustworthy and ideal accountant (especially for those of you who cringe when hearing finances and taxes) is, that you don’t have to worry as much and you don’t need to deal as much with finances and taxes. And that’s probably exactly what you want.
What I learned hiring the wrong accountant
I got a recommendation from a fellow entrepreneur, she told me she and her father have used this person for years already and she assured me that he was competent and trustworthy. So I contacted this person, let’s call him John, and I asked for an initial meeting without any additional research.
It turned out John was a partner in a big accounting corporation and was the head of a team of accountants. He seemed friendly and decent to talk to and both my husband and I had a good initial impression. Since I had no other referrals on the back burner, and time was running out, I hired him and his team to help me close my books and file my taxes.
From the beginning, I was clear and upfront with John that I was an accountant myself. I would prepare the books and send the drafts, his only job was to double check it and to make sure I did follow the Canadian tax code and then to file the taxes on my behalf.
To make a long story short, before I knew it
- there were three (3) different people from his team working on my drafts (alarm bell 1)
- I was bombarded with questions from each one of them (alarm bell 2)
- they ‘adjusted’ and ‘corrected’ my drafts and send them back to me for review. When I realized they were full of mistakes and typos (alarm bell 3) I should have canceled the contract. (But everybody deserves a second chance, right?)
After several back and forths, and more oversights and mistakes from their side, it seemed like we finally had arrived at the right numbers and structure and they filed the taxes on my behalf. Even though I had their firm rates and average hourly rates in writing when the bill came I was shocked, to say the least. They charged me $4,000 and considering the fact that I had to point out several mistakes along the way I suspected they had also charged me for fixing their own mistakes.
No need to mention that I didn’t continue working with John and his team. If something like this can happen to me it can happen to you, and you might not realize their mistakes and they get away with it. But remember, even though they sign your return, in the end, you are responsible for the accuracy of your return.
Here is what I learned:
- It’s important to be clear on what relationship you want with your ideal accountant (see Step 1 below)
- It’s better to spend a lot of time researching, evaluating and finding your ideal accountant than afterwards spending a lot of time licking your wounds and trying to fix the problems
- ask for their average hourly rate and also for an estimate of time
- ask them how they are going to invoice you and require them to give a certain detail on what they were doing for the money they are asking
- In the beginning, it might be a good idea to have a person you trust to look over the work of your accountant if you don’t understand enough of the subject matter
- It’s important that you listen to your gut and when things don’t run the way you want, you have to speak up right away
But how and where can you find your ideal accountant?
Step 1 – get clear on what you want
b) do you want a woman or a man as your accountant?
Step 2 find some candidates
Step 3 – find the right fit FOR YOU
As mentioned in the article from Lifehacker, besides the qualifications of the accountant you want to hire it is crucial that you find a good fit, somebody that you feel comfortable with (and not intimidated by).
After all you will be talking about your finances and the more your accountant knows about you and your business the better can he/she serve you. If you don’t feel comfortable sharing sensitive information you could hurt your business in the long run. And then here my