If you’re a small business owner, you probably are handling every aspect of your business operations, including your finances.

It makes sense to do the accounting when you first start your business. By doing so, you will gain a better understanding of how your company operates and how to keep track of all of its expenses and revenues. 

However, as your company grows, the costs will outweigh the benefits. You may prefer spending time developing your company rather than accounting for it, gaining more clients, or starting new ventures.

Hence, unless you’re a financial expert yourself, hiring an accounting firm to manage your books and taxes is a smart move.

But… selecting a bookkeeping firm isn’t a cakewalk.

There are many things to consider when looking for the right accounting and bookkeeping  service for small businesses. You might also miss a lot of things if you don’t look carefully.

To assist you with this process, here are 6 mistakes to avoid when selecting an accounting firm.

6 Mistakes to Avoid When Selecting an Accounting Firm

If you’re inexperienced working with an accountant, your search can be tricky. You shouldn’t make the following mistakes during your hunt for an accounting firm:

1. Not Screening a Few Companies Before Making Your Choice

Selecting the first result that appears on a search is usually harmless if it relates to non-urgent personal matters. But, when this is for your business, going through is the best strategy.

To ensure your safety, keep a list of three to four companies with their contact information. If you can’t contact one of them, swap it with another firm, so you still have a few companies to get information from.

Prior to interacting with a company, ensure that you know enough about their services beyond what is stated on their website. If possible, search the internet for businesses that have used their tax services or any other accounting services and see what they have to say.

And this brings us to the next mistake.

2. Not Cross-Checking Testimonials

Everyone delivers testimonials and reviews in different ways. Some give brief answers, while others give in-depth and lengthy ones. You may not know that not all of the five stars on a website are authentic.

Paid reviewers create fake accounts to make compelling arguments in order to lure you in. So, how can you identify false testimonials?

Here are some signs that point that the testimonials aren’t authentic:

They’re vague:

They might write something like, "They helped me get my finances in order, thank you!" This short answer is difficult to discern whether the client is simply lazy or whether he has added more information.

Saying only “Great Service":

Testimonials that give five stars and are of around five words saying things like ‘Great Service,’ ‘I’m happy with what they provided,’ ‘they’re good at what they do.’

Not having a business or professional profile:

It's always a good idea to seek out testimonials from real customers or professionals who are listed on LinkedIn. If a service pleases a professional, they will surely tell you about it.

3. Not Asking Important Questions During the Initial Interactions

An introductory get-together aims to confirm whether a company can help you.

During the first interactions, you, the client, will be able to get an understanding of the firm and see what they can do for you. The accounting firm will be able to demonstrate whether they can assist you based on how they do it.

Here are some questions you can ask them to plan your synergies:

  • What are your specialties in the accounting area? (Ask them to be specific)
  • Do you have all the required certifications to work with a business?
  • What will be the level of your service?
  • What are your service cost, and what if we scale your level of engagement in the future?
  • How frequently will you provide us with the reports and financial analysis?
  • What is the industrial diversity of your current client base? And do we fit into this?
  • Can you refer us to any client (of the same industry as yours) to whom we can confirm your claims?

Also, before you jump to the meeting with the potential bookkeeping partner, write down the questions you want to be answered. Our brains often think that an important topic should be addressed only after the meeting is over.

Moreover, don’t be shy about requesting difficult questions. A business isn’t built on politeness or avoidance of difficult truths. You should be realistic about your expectations for their services and ask if they can deliver. Keep track of their answers so you can assess them later.

4. Dominating the Meeting

It’s good to dominate a meeting to get all your queries resolved. But to what extent? You need to understand that there are two parties, and both should have the freedom to express themselves.

After you’ve finished stating your requirements and business challenges, you need to let the bookkeeping service provider explain how they can help you with their spectrum of services.

Although it’s rare, you may not be able to find out about all of the company’s services by looking at its website or by asking on the phone.

Accounting services are far more extensive than you might have imagined. Even if you’re unfamiliar with them in detail, you should at least inquire about the other services they provide in addition to the ones they specialize in to avoid mistakes while outsourcing accounting services.

5. Not Asking About the Hidden Fees

It’s true that not all accounting services have hidden fees, but knowing that a small percentage of them do is enough to make you cautious about your association. Unfortunately, some business owners have a hard time spotting hidden fees.

Hence, it’s mindful to straightforwardly ask the bookkeeping company about the potential hidden fees they’d apply.

You should also (not very often) pay attention to the billings and fee structure of the accounting firm you’re associated with.

6. Going with a Company that Has a Low Bandwidth

Even if you know someone who can handle the job you have, they may be swamped. Hence, it is important for the bookkeeping company you choose to reserve time for your business, even if they’re the best professionals in the field.

CPAs must work for 20–40 hours to fulfill your financial needs, just like any other job. The time they spend with your company demonstrates how much they care about your financial well-being. 

Hence, choosing a firm or individual that can spend the appropriate amount of time on your financials is always recommended.

To probe their availability, you can ask the following questions to them:

  • How many clients are you handling at this moment?
  • What is your team size?
  • How many CPAs will be working on our financials dedicatedly?
  • Can you scale the services up in times of high cash flow and billing?
  • How do you ensure that you’re focusing the best on every client of yours?

Hire the Right Accounting Firm

Accounting firms like ours are up to date on the latest tax laws and offer financial advice and assistance to individuals and small businesses in setting financial goals and developing budgets.

So whether you require payroll handling every week or just want reliable tax advice, you can hire the right outsourcing accounting and bookkeeping firm if you don’t make the mistakes listed in this article.

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