Choosing an Accountant

The word "accountant" really doesn't give you any information about the skills and training of the person you are looking to hire. The word itself is not regulated, as, for example, the word "lawyer" is. When you hear the word "lawyer" you understand immediately the training involved and the requirements for practice in the profession.

Not so with accountants. Anyone can call himself or herself an accountant and prepare your financial statements and tax returns. It's important to delve deep into the qualifications of the person you're about to hire.

Here are some important considerations to keep in mind when you are choosing your accountant:

• Does he or she have a designation? Designations such as Certified Public Accountant (CPA), Chartered Accountant (CA), and Certified Management Accountant (CMA) are bestowed by organizations that require their members to have a certain level of knowledge and training as well as to adhere to a stringent professional code of conduct. Find out whether or not your accountant has these designations, then look up the Web site for that designation (Web sites are listed in Ap­pendix B.) and find out the level of qualification required. If you are searching for an accountant in your area, these organizations can direct you to local members.

• How many clients does he or she have? This point is important for two reasons. First, you want to make certain that you are not this person's first client (although, I suppose, someone has to be). You want an accountant with lots of experience with small businesses like yours. However, you want to make sure that your accountant is not going to be too busy to help you. Look at his or her office structure. Is there a live person at the front desk, or will you only ever get voicemail when you call? Are there other professional staff who can help you if the head accountant is busy? Can you ask them questions via e-mail rather than play phone tag for days? It's important to ensure that your accountant will be there when you need him or her.

• Is he or she keeping current with new software for small businesses? This issue can be difficult to assess, but it is a concern. Some accountants (designated or not) do not assess new accounting software when it comes out and do not stay current with trends, therefore making it difficult for these accountants to recommend software to you. They would most likely simply recommend the software with which they are familiar because it's all they know.

• Are his or her billing rates and policies clear? Find out the firm's rates for different types of work. Some accountants on an hourly basis. If the firm bills on an hourly basis, make sure that your accountant will inform you of the costs accruing as the work progresses. There's nothing worse than getting a giant bill at the end that you weren't expecting.

• Do you like him or her? You may have the best qualified accountant in the country but if you can't build a rapport with him or her, your working relationship will be very difficult. You will be more likely to take the advice of an accountant with whom you get along and whom you respect. Don't make the mistake of minimizing the importance of the relationship.