How to Choose an Accountant for Your Small Business

Finding the right accountant can save you thousands in taxes, help you make better business decisions, and give you peace of mind about your finances. Finding the wrong one can cost you money, create stress, and leave you worse off than doing it yourself.

This guide helps you find and evaluate an accountant who’s right for your small business.

Do You Need an Accountant?

First, let’s clarify what an accountant does versus other financial professionals.

Accountant vs. Bookkeeper

Bookkeeper:

• Records daily transactions
• Reconciles accounts
• Produces regular financial reports
• Handles day-to-day financial administration

Accountant:

• Prepares and files tax returns
• Provides tax planning advice
• Reviews and analyzes financial statements
• Advises on business structure and strategy
• Represents you in audits

Key insight: Most small businesses need both—a bookkeeper for ongoing work and an accountant for tax and strategic matters.

CPA vs. Non-CPA Accountant

CPA (Certified Public Accountant):

• Passed rigorous exams
• Meets continuing education requirements
• Licensed by state boards
• Can represent you before the IRS
• Can perform audits (if licensed for that)

Non-CPA Accountant:

• May have accounting degree or experience
• Can prepare taxes (varies by state)
• Limited representation rights
• Often more affordable

When you need a CPA:

• Complex tax situations
• Potential audit exposure
• Bank loan requirements
• Business valuation needs
• Significant assets or transactions

When to Start Looking

Find an accountant when:

• You’re starting a business and need entity selection advice
• Your taxes are beyond simple Schedule C complexity
• You’re making significant business decisions
• Your income exceeds $75,000-$100,000
• You have employees
• You have multiple business entities
• You’re considering selling or buying a business
• You’ve been audited or have IRS issues

Don’t wait until tax season panic. The best accountants are booked up by February.

What to Look For

1. Small Business Experience

Choose someone who works with businesses like yours:

• Size: An accountant serving Fortune 500 companies may not understand your $300K consulting practice
• Industry: Someone who knows your industry catches industry-specific deductions and issues
• Business model: Service, retail, manufacturing—different models have different needs

2. Relevant Credentials

At minimum:

• Licensed to practice in your state
• Current on continuing education
• No disciplinary actions

Helpful credentials:

• CPA license
• Industry-specific certifications
• Technology certifications (QuickBooks ProAdvisor, etc.)

3. Communication Style

Your accountant should:

• Explain things in terms you understand
• Respond within reasonable timeframes
• Be proactive about opportunities, not just reactive to problems
• Be accessible when you have questions

4. Advisory Orientation

The best accountants don’t just file returns—they advise:

• What should I do about retirement contributions?
• Is this equipment purchase smart from a tax perspective?
• How should I structure this transaction?
• What will my estimated taxes be?

If they only want to see you once a year at tax time, you’re missing value.

5. Technology Compatibility

They should work with:

• Your accounting software
• Electronic document sharing
• Current communication tools

Red flag: An accountant requiring paper documents and fax machines may be behind on tax law too.

Where to Find Candidates

Referrals

Ask:

• Other business owners in your industry
• Your banker or financial advisor
• Your attorney
• Professional associations

Referrals from businesses similar to yours are most valuable.

Professional Directories

• AICPA (American Institute of CPAs) website
• State CPA society directories
• Specialty directories (Profit First Professionals, for example)

Online Search

Search terms like:

• “[Your city] small business CPA”
• “[Your industry] accountant”
• “CPA for [specific need]”

Check reviews, but verify credentials independently.

Local Business Groups

• Chamber of commerce
• Industry associations
• Networking groups
• Small business development centers

Questions to Ask

About Their Practice

1. How long have you been practicing?

   • Look for stability and experience

2. What percentage of your clients are small businesses?

   • You want someone focused on businesses your size

3. Do you have experience in my industry?

   • Industry knowledge means better advice

4. How many clients do you serve?

   • Too many clients can mean rushed service

5. Who will actually work on my account?

   • Meet the person doing the work, not just the partner

About Their Services

1. What services do you provide?

   • Tax prep only, or planning and advisory too?

2. Do you prepare monthly/quarterly financial statements?

   • Or do they expect you or your bookkeeper to?

3. How do you handle tax planning throughout the year?

   • Year-round proactivity is valuable

4. What accounting software do you work with?

   • Compatibility matters

5. Can you represent me before the IRS if needed?

   • CPAs can; not all preparers can

About Working Together

1. How do you prefer to communicate?

   • Phone, email, portal—what works for both of you?

2. What’s your typical response time for questions?

   • Set expectations clearly

3. How do you handle after-hours or weekend questions?

   • For urgent matters

4. What information do you need from me, and when?

   • Understand their process

5. How do you keep clients informed about tax law changes?

   • Proactive communication matters

About Pricing

1. How do you structure your fees?

   • Hourly, fixed, retainer—understand the model

2. What’s included in your standard engagement?

   • Avoid surprise charges

3. What’s the estimated cost for my situation?

   • Get a range if not fixed price

4. How are additional questions or work priced?

   • Know before you call

5. Do you require a retainer or upfront payment?

   • Understand payment expectations

Red Flags to Watch

Aggressive Claims

• “I can save everyone 50% on their taxes”
• Guaranteed refunds or savings
• Recommendations that seem too good to be true

Legitimate tax savings exist, but overly aggressive claims often lead to audits and penalties.

Poor Responsiveness

If they’re slow during the sales process, expect worse after they have your business:

• Days to return calls
• Vague or dismissive answers
• Rushed feeling in meetings

Lack of Interest in Your Business

Good accountants ask questions:

• What does your business do?
• What are your goals?
• What concerns do you have?

If they’re just collecting documents, they’re not adding value.

Technology Resistance

Accountants who resist modern tools may also be behind on:

• Recent tax law changes
• Efficient processes
• Best practices

No Clear Process

Professional accountants have systems:

• Client onboarding process
• Document collection method
• Review and communication schedule
• Clear deliverables

Disorganization in their practice means disorganization with your work.

Evaluating the Relationship

The First Meeting

Notice:

• Did they ask questions about your business?
• Did they explain things clearly?
• Were they interested or just transactional?
• Did you feel comfortable?

The First Engagement

After working together:

• Did they meet deadlines?
• Were there surprises in the bill?
• Did they catch anything your previous accountant missed?
• Do you feel more informed about your finances?

Ongoing Evaluation

Annually ask:

• Are they still responsive?
• Do they proactively share information?
• Are they keeping up with your growing business?
• Would you recommend them to others?

Working Effectively Together

Once you’ve chosen an accountant:

Prepare Properly

• Provide complete documentation
• Meet deadlines they set
• Organize materials before sending
• Flag unusual items proactively

Communicate Clearly

• Ask questions when you don’t understand
• Share business changes that affect taxes
• Inform them of major transactions before they happen
• Respond promptly to their requests

Use Them Strategically

• Schedule planning meetings before year-end
• Ask about major decisions before making them
• Bring up goals and concerns
• Request proactive advice

Provide Feedback

• Let them know if something isn’t working
• Acknowledge when they do well
• Address billing concerns promptly
• Be honest about your needs

Pricing Expectations

What should small business accounting cost?

Tax Preparation Only

• Simple Schedule C: $300-$800
• Business with employees: $500-$1,500
• Multiple entities or complex situations: $1,500-$5,000+

Tax Prep Plus Planning

• Basic package: $1,500-$4,000 annually
• Comprehensive service: $3,000-$10,000+ annually

Monthly Advisory/CFO Services

• Basic: $500-$1,500/month
• Comprehensive: $1,500-$5,000+/month

Hourly Rates

• CPAs: $150-$400/hour
• Staff accountants: $75-$150/hour
• Seasonal preparers: $50-$100/hour

Value perspective: A good accountant should save you more than they cost through tax savings, avoided mistakes, and better decisions.

Making the Decision

After meeting with 2-3 candidates:

1. Compare capabilities: Can they all do what you need?
2. Evaluate fit: Who did you connect with best?
3. Consider accessibility: Who seems most responsive?
4. Review pricing: What’s the value proposition?
5. Trust your instincts: Who do you want handling your finances?

The cheapest option isn’t always best. Neither is the most expensive. The right accountant is one who fits your needs, communicates well, and provides value beyond just filing returns.

When to Switch Accountants

Sometimes the relationship doesn’t work. Switch when:

• Consistent unresponsiveness
• Errors that cost you money
• Failure to provide proactive advice
• Fees consistently higher than quoted
• You’ve outgrown their capabilities
• Loss of trust

Before switching, communicate your concerns. Sometimes issues can be resolved. If not, make the change—your finances are too important.

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