Tips for evaluating your accounting services
by Kimberly Perkins, Green Apple Resources, LLC, NH
Accountants do not just prepare taxes. An effective accountant can and should take an interest in your business and offer multiple services that can help ensure your success. While these services will include tax preparation, other useful services include financial management advice, financial analysis, auditing if you need it, as well as representation of your company before the IRS for tax purposes.
There is an old adage that says, “If you don’t know where you are going, any road will do”. However, for your business, will just any road do? What direction will get your company where you want it to go? An effective accountant can provide a key set of skills that will help you along the road to success. To determine if your accountant stacks up, it helps to ask yourself these questions.
1. Has your accountant provided guidance on managing your tax records, which records to keep and how to organize them?
Accountants should take the time to offer effective ways of organizing your business records. In some cases, he/she may ask you to save tax-related information on a computer disk and possibly implement tools or procedures for sharing this data with him. Maintaining organized tax records also saves you money that you may otherwise have to pay your accountant, staff or others. Your accountant should always be interested in saving you money.
2. Are you satisfied with your accountant’s ability to stay up-to-date on tax changes?
It is essential that your tax professional have a thorough understanding of the latest tax law changes and the impact of these changes on your business. If your accountant provides you with a newsletter and offers periodic seminars on tax law changes, this is a good indication that he or she is on top of things. Make sure your accountant knows enough about the tax changes and can recommend new or different practices and procedures appropriate for your business.
3. Is your accountant doing everything possible within the law to lower your tax bill and offer you money-saving tax strategies?
A good accountant continually volunteers possible strategies, especially considering all the frequent tax law changes enacted through congressional legislation. You should not have to pull strategies out of him.
4. When your accountant offers advice and tax strategies, do you feel confident about them?
Your accountant’s philosophy should match your own. For example, is he or she always suggesting aggressive strategies to minimize the tax burden, even if it means placing you at risk of an IRS audit? Conversely, you may feel your accountant is not aggressive enough and is ignoring deductions you may be able to take. If you are frustrated with your accountant’s approach, he may be falling down on this test. It is important that your accountant be in-line with your philosophies.
5. Have you requested the results of your accounting firm’s peer review report, which is supposed to be done every three years by an outside accounting firm?
When firms are willing to share the results of this audit with you, they usually have nothing to hide.. A lot of hemming and hawing may indicate a problem. Just ask for it and see what he/she says. Better yet, why isn’t your accounting firm offering these reports to you already?
6. Are you comfortable with the accounting fees you pay?
Take a close look at what you’re paying for accounting services and whether you’re getting your money’s worth. Of particular concern are accounting fees that go up every year, without fail. If this is happening to you, ask yourself whether the additional fees you pay are worth it. Make some calls and find out whether your accountant’s fees are in line with his competitors.
7. Does your accounting firm assign you a new staff accountant frequently?
If that’s the case, watch out. This kind of revolving door means trouble for your business. It takes time to get a new accountant up to speed on your business and how you do things. This may be an indicator of how well you accounting firm is managed.
8. Is your accountant familiar enough with your type and size of business?
Your accountant should be working with a fair percentage of businesses that are similar to yours. The more clients an accounting firm has that share attributes of yours, the more helpful your accountant can be to you. This shared experience across clients can signal how your business is performing vis-à-vis the other ones the firm deals with. When interviewing for a new accountant, try to determine whether he/she understands your industry and the particular needs of your business.
9. Is your accountant working for you as an individual?
Does your accountant offer ‘canned solutions’ rather than listening to your unique and specific needs? An accountant works for you, not the other way around.
10. Can you easily reach your accountant when needed?
You should receive a quick response anytime you request to speak with your accountant. If your accountant is too busy to speak or meet with you or if he/she is unwilling to take the time to educate you on the issues, you may want to consider finding a new accountant.
If, after answering these questions you do not think your accountant is measuring up, discuss your concerns with him or her. Give your accountant some time to work on areas that need improvement and keep the lines of communication open. In today’s highly competitive marketplace, accounting firms, like most businesses, are making every effort to retain clients. Let this work to your advantage and make sure you get the most for your money.
Insist your accountant help you figure out where you are going, so you will know which road to take.