What to look for in an Accounting Firm.
The disaster at Bench illustrates many of the dangers of not choosing the right firm correctly. So, to help you choose who is your service provider, we have created a quick guide to help out.
1. Who Owns Your Data?
Relying on proprietary software can put your data at risk if the provider shuts down. Choose widely-used tools like QuickBooks or Xero, Sage or Zoho and ensure you maintain full administrative access. This is essential. We recently took over a file in which the former bookkeeper locked the client out of his own books. The Court's have ruled that the data belongs to the client, not the service provider.
2. Who Handles Your Books?
Offshore teams can be effective if properly managed. However, always ensure a licensed CPB/RPA/CPA reviews your records to ensure accuracy and compliance. Are they keeping their skill sets current. It is imperative that an organization invest in their staff training. Personally, I have encountered several accountants with the mindset that they do not need to recertify in their software skills each year.
3. What Technology Do They Utilize?
Modern accounting firms use advanced tools and automation to streamline tasks while ensuring precision. Ask about the technology they rely on to confirm they’re keeping up with industry standards. Cloud based accounting has an advantage in that the platform is always the most current and have multiple platform niche integrations. The software company hosts the data.
4. How Secure Is Your Data?
Data security is essential. Check if the firm employs SOC certifications, strict access controls, and other protocols to protect your sensitive information. If the data is on Xero or QBO, the data is quite secure, so the weak link is within the organization. What steps does the organization use to secure passwords or what protocols are in place should an employee be terminated/resign or move on.
5. Are Your Tax and Accounting Teams Coordinated?
Your tax and accounting teams must work together to avoid contradictory advice. Look for firms offering integrated services or ensure they communicate effectively. In a smaller organization, these individuals are often one in the same.
6. Do You Have a Dedicated Contact?
Consistency is critical. Avoid firms that shuffle you between multiple contacts and choose one that provides a dedicated point of contact for streamlined communication. It's about relationship building as accounting and tax should have a more personal touch.
7. What Are Their Billing Practices?
Hourly billing can lead to unexpected costs. Opt for a firm with transparent, fixed-rate pricing to better manage your budget. This should also be laid out in the terms of engagement letter, which should clearly define what the roles and expectations of all parties.
8. Do They Offer Regular Updates?
Staying informed is crucial. Ensure the firm provides consistent updates, whether monthly or quarterly, to keep you in the loop on your financial progress.
9. What Qualifications Do They Have?
Not every firm employs designated individuals. Verify their certifications, industry expertise, and commitment to staying current through ongoing education. Platforms like Xero and Intuit require annual certification on a firm level. Internally, staff should be supported and encouraged for ongoing CPD.
10. Do They Understand Clients Like You?
Changing service providers is not like changing your underwear. While yes, accounting and tax services are intimate, It needs to fit comfortably. Your service provider needs to understand your unique challenges. Select a firm experienced with businesses of your size and complexity. Small businesses require personalized service, while larger operations demand expertise for intricate challenges.
Take the time, research your choice. It's one of the most important decisions you can make.
