What to Look For in An Accountant

I received a phone call today from someone who was starting a business and he wanted to know, "What do I look for in an accountant?" Great question! Here is how I responded:

First, be aware that there are different types of "accountants." You can easily find a bookkeeper to do your books, but it's more difficult to find someone who has the background and certification to help you with the tricky tax decisions, and who can go with you to a tax audit, if necessary. You should look for a tax accountant or CPA, not just an accountant.

Second, look for someone with expertise in your type of business. Ask what experience these people have with businesses like yours. Each type of business (retail, manufacturing, professional practice, for example) has its own "quirks" and tax situations. You need someone who is experienced with this quirks to help figure them out.

Third, look for someone who practices "assertive accounting." By this, I mean someone who know how to legally avoid taxes (I did NOT say "evade"). There are lots of assertive things a tax accountant or CPA can do to help you pay less tax. Someone who isn't afraid to take the deductions and credits can save your business a lot of money.

Fourth, look for someone who is pro-active. Your tax advisor should be able to see your financials and help you prepare, to minimize taxes. You should be meeting with your tax advisor every quarter, and you want him/her to tell you, "I see this situation by the end of the year. We need to do such-and-such now to keep your tax bill low." You don't want someone who waits until the end of the year and says, "Yeah, well, it looks like you've got a big tax bill to pay. Should have seen that one coming." See what I mean?

Finally, working with business advisors like your accountant is a lot easier if you enjoy the person. Interview several people, as this young businessman did, and if several look possible, let your instincts guide your final decision.