Accountants arm business owners, especially those who have zero background in accounting and finance, with the knowhow to navigate around taxes, bookkeeping, cash flow, payroll, financial risks as well as other money-related issues.
Start looking for an accountant if you need an extra pair of hands to crunch the numbers, an extra pair of eyes to look out for likely financial risks or an extra brain to boost your financial intelligence. Although it is rewarding, looking for the right accountant to hire is difficult, especially if this is your first time.
In this guide, you are going to learn everything about hiring an accountant. This guide covers a brief background of the accounting industry, the characteristics to look out for, what you can offer an accountant and where to find potential candidates. Sounds good? Let’s get started.
- 1 Understand the Field of Accountancy
- 2 What to Look for?
- 3 Where to Find Potential Candidates?
- 4 What to Offer?
- 5 Share Your Experience and Ask Us Questions
Understand the Field of Accountancy
Having a good grasp of the accounting industry puts you in a better position to look for and to evaluate a candidate later on.
In a nutshell, the accounting industry is divided into four main sub-niches. An accountant who has completed his or her studies should be familiar with all of them because the sub-niches are well covered by accountancy courses provided in schools, training centers, colleges and universities.
Bookkeeping or Records-Keeping
Bookkeeping or maintaining financial records for a business is the most common reason to hire an accountant. A bookkeeper’s job scope includes the sorting and storing of accounting documents, data entry as well as the preparation of financial statements and management reports.
Once you have a complete and well-prepared set of accounting records, your accountant will then be able to prepare budgets, forecasts, expense reports and even provide suggestions on performance management issues such as highlighting an increasing debtor collection period or a reducing profit margin.
A good and experienced accountant is also capable of setting up strong financial processes and systems to improve the accessibility of financial data, as well as to curb any possibility of fraud and error.
Feeling confused when it comes to tax laws, filing deadlines, the eligibility of certain expenses for tax deductions and many other tax-related issues? You are not alone. In fact, many business owners got themselves an accountant just to deal with taxes.
Tax planning and compliance are both common responsibilities of an accountant.
Tax planning involves the consideration of various legal methods to lower the amount of tax payable whereas meeting tax filing deadlines, making sure tax laws are being adhered to and liaising with tax officers in the event of a tax or IRS audit falls under tax compliance.
In most cases, an accountant is able to provide sound business advice thanks to their understanding of your financials, business environment, business laws and potential risks.
For example, an accountant can advise on various financing options together with the associated pros and cons if you are looking for external funding to grow your business.
If you are considering about expansion, a good accountant will look at how it will impact the financials in order to provide an opinion on whether you should proceed with the plans.
Some accountants are also experts in more complicated matters like mergers and acquisitions as well as due diligence but not every business will require such advice.
Audit leans towards the review of financial records and internal controls rather than the preparation of accounts or the setting up of internal controls.
It is very common for an accountant to have past experience in audit. This is because working experience in public accounting, which involves audit, is the primary requirement to become a Certified Public Accountant (CPA) in the United States or a Chartered Accountant in the many Commonwealth countries worldwide.
As an employer, it is worth noting that an accountant who was an auditor has a broader set of knowledge and experience thanks to their wide exposure to different industries during their time at public accounting firms.
What to Look for?
You should have a better understanding of the accounting industry by now. Next, let’s dive into what you should look for in a candidate before hiring them to become your accountant.
One can learn how to prepare a basic set of accounts through books and online courses. Additionally, there is no law requiring businesses to have their accounts prepared by a Certified Public Accountant or a Chartered Accountant.
An academic qualification such as a degree in accounting or finance serves as a proof for the level of accounting knowledge that an individual has.
Membership with Professional Accounting Bodies
A candidate who is a member of any professional accounting bodies such as the American Institute of CPAs (AICPA) in the United States, the Association of Chartered Certified Accountants (ACCA) or any other local accounting bodies around the world must have gone through a series of examinations, justifying their knowledge to carry out accounting-related responsibilities.
In terms of experience, they are required to have at least 1 to 3 years of working experience in a relevant role to become a member. However, this requirement differs from one country to another.
Continuing professional development, with various criterias under different jurisdictions, is compulsory for members to maintain their license or membership with an accounting body. This makes sure their knowledge and skills are fresh while keeping them up-to-date on relevant developments.
For employers, hiring an accountant who is affiliated with a professional accounting body gives you the assurance that he or she will always have sufficient knowledge as well as experience to prepare your accounts accordingly and to provide suitable financial advice.
Job experience counts, but the type of experience matters a lot too!
Let’s look at how you should evaluate the job experience of candidates who are applying to become your accountant.
Volume of Transactions Handled
The volume of accounting transactions for a business is dictated by its industry, size and how it operates.
For example, a restaurant may have more accounting transactions if it purchases ingredients in small quantities. Similarly, a business with multiple branches needs to consolidate its sales, purchases, receipts, payments and even the financial statements on a daily, weekly or monthly basis to keep the accounts up-to-date.
A high volume account might be beyond an accountant’s capabilities if he or she only has experience in managing small accounts.
Your accounts may have specialized sections or a slightly higher proportion of specialized transactions. This again, depends on the industry you’re in.
To illustrate, a manufacturer maintains a manufacturing account to keep tabs on production costs. On the other hand, an accountant who works for a construction company needs to know the right accounting treatment for construction contracts.
If you are running a business in construction, manufacturing or scientific research and development, you are going to be better off hiring an accountant with prior experience in these sectors.
The benefits of using an accounting software are aplenty these days.
Most accountants these days should have no problem adapting themselves to any accounting software. Even so, hiring an accountant who has experience in using your accounting software has its benefits. He or she gets to adapt quickly and chances for errors will be minimized.
If you are currently running an inefficient accounting system or not even using an accounting software, place extra emphasis on employing an accountant who has tried multiple accounting software in the past. They will know the pros and the cons that comes with each of them.
Unlike an average employee, an accountant is like a business partner who is taking care of the accounts and financials.
Apart from just knowledge and experience-fit, you need to look for someone who matches your personality when it comes to money and business matters.
Are you someone who is comfortable harping on any potential tax savings regardless of the risks involved? If your business gets into an IRS or tax audit, will you comply to the bare minimum or will you be as transparent as you can? Do you prefer to grow your business without taking any external funding?
Direct the questions above to potential candidates during their interviews. Listen to their answers carefully. Do they provide brief or detailed answers? Do they ask for more information to give better answers? Are you comfortable with the solutions put forward? Ultimately, does their personality match yours?
Honesty and Integrity
Being honest and having a high level of integrity are the most important characteristics to look for in an accountant. Of course, these are no doubt the hardest characteristics to evaluate too.
The best way to find out is to speak to the previous employers of the candidates. This has to be done with the candidates’ permission. Those who left in good terms and have got nothing to hide will be more than willing to give you the green light.
Network of Professional Contacts
Although having a wide network of professional contacts is not essential, it is a positive sign.
“You’re the average of the five people you spend the most time with.” – Jim Rohn
An accountant with friends and contacts in accounting should have little problems maintaining his or her level of knowledge as well as to stay abreast of industry updates.
Moreover, an accountant or a bookkeeper with friends working in different sub-niches of the accounting industry will have someone to go to for second opinions when a problem that he or she is unfamiliar with arises.
Where to Find Potential Candidates?
There are many avenues to look for a bookkeeper or an accountant and we are going to walk you through some of them.
Job Portals or Classifieds
There should be a popular job portal or classified in your city for job seekers.
Likewise, official websites of professional accounting bodies like the AICPA in the United States and ACCA for most Commonwealth countries are frequented by qualified accounting professionals. These websites feature a job board that caters to both employers and their members.
Both the above are actually great places to recruit your next accountant or bookkeeper with a small listing fee.
Once you have pinpointed where to publish your job ad, write down the job description and criterias that you are expecting from applicants. Include the details of a potential offer too to attract the attention of candidates.
You can read The Secret to Writing Job Descriptions That Attract Your Ideal Candidates by Wade Foster, Co-Founder and CEO of Zapier, if you want to learn more about crafting a good job ad.
Word of mouth is still a popular way for business owners to connect with potential hires.
Let your business contacts know if you are looking for an accountant. Mention it during networking events. At the same time, if you are part of a trade association, consider asking the members for recommendations.
A candidate needs to be worthy and has worked with someone long enough to earn a recommendation. Although careful evaluation is still needed, a candidate who is referred by a friend, contact or business partner has instant social proof and should be given extra consideration.
What to Offer?
Once the perfect candidate is found, the next step is to come up with an offer.
This can be hard, especially if you are hiring in a time when there are ample job opportunities around. Obviously, the demand for well-qualified accountants with solid experience across many industries is always going to be high.
The acceptance of a job offer happens when there is a strong match between your offer and what the candidate is looking for. Let’s look at what usually influences a candidate when a job offer is being considered.
Needless to say, knowing what salary to pay an accountant is crucial in drafting a job offer.
According to the Bureau of Labor Statistics, it was estimated that the annual salary of accountants and auditors averages from $40,370 to $113,740 in May 2013, with the median standing at $65,080 in the United States.
Of course, the amount of salary to offer has a lot to do with the location of your business, competitiveness of the job market and other benefits that you are bringing to the table. Besides, the current salary, qualification and experience of a candidate are strong factors to consider as well.
Aside from just salary, some accountants are looking for new work experiences to either enhance their resume for future opportunities or to find a job that matches their passion and interests.
A young accountant who loves an intense job environment and wishes to dabble in more than just spreadsheets may prefer to work in a fast growing startup.
On the other hand, a fresh accounting graduate who likes to be around small animals may put aside a high salary from an investment bank to work with a pet store.
Continuing Professional Development
Qualified accountants participate in continuing professional development programmes to maintain their membership with the respective accounting bodies.
Also, good accountants will want to enrich their skill sets either by participating in seminars or by attending workshops on the latest developments in the accounting industry.
The willingness of an employer to sponsor these activities and programmes is almost always welcomed by accountants. Apart from portraying yourself as a supporter of continuous learning, you are going to be the first to benefit from the new knowledge or skills that your accountant acquires from these programmes.
An accountant spends a lot of time in the office and whether a work environment is conducive enough for him or her is going to be considered.
A positive work environment encourages collaboration, communication and productivity. At the same time, it makes an employee feel good about coming to work everyday. This is especially true for accountants because their responsibilities include crunching numbers and churning out documents daily, which can be extremely mundane.
Want to learn how you can create a positive work environment to attract talented employees, 5 Characteristics Of A Positive Work Environment by Michael Poh is a useful article that you should read.
You are now ready to go out there and start looking for your ideal accountant because our guide has given you a ton of pointers.
If you are still stuck, ask your questions in the comment section below. Our team will definitely get back to you.
Do you have an accountant for your business? Is he or she a good fit? Share your experience with us.