Accounting is one of the least fun yet most important responsibilities that small business owners have, which is why many hire an accountant to handle their finances properly. In fact, when surveyed, small business owners said their accountant is more important to their business than anyone else like lawyers, bankers or insurers. After all, a whopping 71% of small business owners use accountants to prepare their taxes.
But not all certified small business accountants are created equal. Some go the extra mile while others might dig you into financial holes. So what are some of the red flags?
If your accountant is displaying any of these behaviors, it’s time to find someone new.
1. They are more reactive than proactive and are slow to reply
A survey of nearly 400 small businesses shows that they all share the same top complaint about their accountant: They are more reactive than proactive. As mentioned earlier, a good accountant plans ahead for the whole financial year and stays on top of the latest tax codes. If your accountant is often scrambling to put out fires instead of preventing them, then it’s time to look for someone else. Not to mention that if your accountant is slow to reply to your calls or emails, what else might they be ignoring?
2. Their office is disorganized
Keeping your books in order, filing the appropriate tax statements and creating a budget requires a certain level of organizational skills. If you walk into your accountant’s office and it looks in disarray… run. Documents could get lost, forms not filed on time, and your business could suffer. If they can’t keep their office in order, chances are they can’t keep your books in order either.
3. They don’t explain how you should keep records
No one’s records are perfect, but every time you visit your accountant, they should give you more guidance on how to keep neater and more accurate records. A good accountant can create systems for you that make record keeping fast and simple. If your accountant is only concerned with filing your taxes and isn’t willing to help you improve your systems and behaviors for the future, it’s time to have “the talk”.
4. They don’t understand your industry
Your accountant may be good at what they do, but if they don’t often (or ever) work with in your specific industry, they may not have the knowledge to score you the best deductions, loans or other financial products for your market. It doesn’t mean they are a bad accountant; it just means that they aren’t the right accountant for you. Find someone with the right background by getting a recommendation from other small businesses in your industry. When your accountant knows the ins and outs of your industry, it can result in significant savings for your business.
5. You have no idea what they do for you
If you’ve read through this entire article and realized that you don’t actually know what your accountant actually does for you (other than sending a monthly invoice), it’s time to find a new one. Your accountant should be very clear regarding their role in your business, responsibilities, and what their plan of action is for your company. If they are unwilling to share that information with you, they probably aren’t adding much value to your business.
Working with the wrong accountant can cripple your company and put you out of business faster than you can say “here’s my shoe box full of receipts.” But the good news is that the right accountant can help you achieve financial stability and growth. Keep in mind that, no matter who is managing your books, you should also take a proactive role in understanding your business finances and bookkeeping.
Larry L. Bertsch, CPA & Associates, a top certified public accountants firm that has been offering quality accounting and tax preparation services to entire Las Vegas market since 2003. Since beginning his practice in 1964, Mr. Bertsch has been engaged in tax preparation and planning, accounting, bookkeeping, litigation support, bankruptcy trustee services, receiverships, forensic accounting, business evaluations, and was appointed by the Department of Justice as a panel Trustee for Bankruptcies in 1991.