How Do You Know When You're Outgrowing Your Accountant?

Every accounting firm has a different focus. Some strictly do personal income tax. Others focus on the needs of small-business owners. Still others specialize in management consulting to large corporations. Even within these categories, there are differences in firms.

For example, some smaller accounting firms deal only with basic small-business issues. They may be able to prepare simple financial statements and corporate income tax returns, but may be unable to answer your questions about employee compensation or buy / sell agreements.

Here are some things to consider when deciding if your company is growing too complex for your accountant:

• Does your accountant return your phone calls promptly when you have a complex issue to discuss? If not, this could be a sign that he or she is not comfortable giving counsel on that particular issue.

• Does your accountant have access to expert help for issues that are outside of his or her area of knowledge? For example, some accounting firms have arrangements with tax or export specialists to assist their clients with these types of issues. If yours does not, you will have to consider what will happen if you face these issues.

• Is your accountant frequently making errors in your statements or forgetting business transactions that you had previously discussed with him or her? This could be a signal that your accountant is either too busy or isn't focusing on your business needs - two situations that spell risk for you.

At the end of every year, assess the performance of your accountant (as well as your other business advisors) to ensure that he or she is still a good fit for your business. If you feel that any of the above situations are occurring, sit down with your accountant and discuss them candidly. If you find the answers are insufficient to address your concerns, it's time to find another accountant.