Top Five Things To Look For When Hiring A Chartered Professional Accountant

As a business owner, you’ll understand the importance of financial accounting. Unfortunately, handling your own finances can leave you stressed and exhausted, which may result in oversights that could cost you a lot.

For small-business owners, it’s crucial to have someone who can provide proper advice. The services of a Chartered Professional Accountant (CPA) ensure that you get the best advice. CPAs offer detailed financial analysis and information on tax and financial matters. Hiring an accountant will help you gain more tax savings and organize your financial affairs, it will also give you the freedom to focus on growing your business.

However, picking the right CPA for your business is not the easiest of tasks, but it shouldn’t be an impossible search. If you’re looking for a CPA, we’ve compiled a list of the top five things to look for when hiring a Chartered Professional Accountant.

1. Ability to answer basic small business accounting questions.

Often CPAs have the experience of dealing with only large businesses. Therefore, you must check if a CPA has experience in helping small businesses. If you ask basic questions about starting or running a small business, and a CPA has a deer-in-headlights look, or they say that they have to research these basic questions, then you’ve got the wrong CPA.

The accountant you have in mind must possess a keen knowledge of business and tax law. Understanding the tax code, financial accounting, licensing requirements as well as possessing general business knowledge must be a prerequisite for an accountant you are considering. It’s a significant advantage if a CPA has an entrepreneurial spirit because then they will be able to connect to your needs as a business owner.

2. A capable CPA should work in sync with their team.

No CPA is perfect, and no one has all the characteristics to do great accounting and tax work. This is the reason a CPA and a team should complement each other. When you are thinking of hiring a CPA, ask him or her what their weaknesses are. If they are good, they will admit how their team positively complements him or her and adds to his or her own personal skills or style.

It should be a red flag if your CPA thinks they are better than their team or plans on doing all the work themselves. You want to work with a CPA, who offers strategies and leads a team, and not someone who is inputting your data and preparing your tax return. That is a poor use of their time.

A CPA and team should consider the overall picture of your finances and business and review your tax return. With that in mind, you should analyze the office staff and how they interact with you. These are the people you will be talking to more than your CPA. If they aren’t cordial, kind, knowledgeable and helpful, then you’ve got the wrong CPA, who in turn has the wrong staff.

3. A CPA should be able to communicate in the simplest possible language.

There is a lot of jargon in the fields of accounting and tax. This makes it very important for you to find a CPA, who is willing to explain financial matters in simple language. In fact, we would say that you and your CPA should be able to speak the same language. If you’re confused after a conversation with a CPA, keep interviewing until you find someone, who doesn’t speak jargon, who can explain the numbers and tax laws at a level you comprehend and is a pleasant conversationalist.

A CPA should be a partner in your entrepreneurial dreams. You don’t want to dread a trip to the CPA like you dread a trip to the dentist. It’s also important that a CPA shares your risk tolerance. You may never find a CPA who shares your precise risk tolerance. However, they should be willing to be creative, yet not be too risky. At the same time, they shouldn’t be too conservative. Ask a CPA how they would treat certain kinds of deductions, income or strategies to see if they respond to your satisfaction. If they refuse to be flexible, then you’ve got the wrong CPA.

4. Get a CPA who can save you money.

As a business owner, you want an accountant who can help you in saving some money through perfectly legal ways. If an accountant is merely managing your accounts, then they are not being proactive. So before choosing an accountant, ask what they could suggest to save your business money.

For example, what proportion of your operating costs do they think you can offset against tax? If you’re a sole trader or a consultant, can you offset a percentage of your phone bill, car costs, maybe even rent or mortgage payments? What are the implications of doing so? The accountant should warn you of any pitfalls.

For example, using your home as a business premise could result in an issue when you decide to sell the house. Always bear in mind that in most countries there is a big difference between tax avoidance (usually legal) and tax evasion (usually illegal). You need an accountant, who knows the details of tax law so well that they will save you money in legal ways. At the same time, they shouldn’t take things too far and cause your business to operate illegally. Be very careful about this because ultimately it’s you, the business owner, who’ll pay the penalty if the law is broken.

5. Find a CPA, who uses the same accounting software as you.

There are several accounting software applications available in the market. Almost all CPAs are used to one software or another. This can be a problem or an opportunity. If your company uses a different type of software, then there are likely to be issues in sharing data with the accountant. Although it might be possible to export and import data in a suitable format, it can be time-consuming and easily lead to errors.

There’s also the risk of your highly sensitive financial information being read as you send the data back and forth because email is about as secure as a postcard. Therefore, it would be best if you tried to find an accountant, who’s using the same software as you. Alternatively, failing that, one who is willing to do so.

There’s no reason why a CPA can’t use more than one type of accounting software for different clients. That’s especially true if the software is easy to learn. It’s best if you can agree to use market-leading accounting software that’s easy to use, and only exchange files that have been suitably encrypted. An even better option is to choose collaborative, cloud-based accounting software with encryption built-in. This will mean that you don’t have to worry about the risks involved in exchanging data back and forth.

If you’re looking for personal and corporate tax services, bookkeeping, payroll, virtual CFO services across Oshawa, Whitby, Ajax, Pickering, Bowmanville, Newcastle, Port Perry, Cobourg and beyond, reach out to Your Bottom Line. Our goal is to relieve you of the stress that comes along with taxes, bookkeeping, payroll, training and everything else that might be weighing you down from focusing on what truly makes you money. Whether you need help with a simple tax return or need help with anything within your business, we’re here to help.

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