Have you experienced business growth over the past few years? Are you trying to maximize your tax savings or ensure accurate financial reporting? If any of these situations describe your business, it might be time to enlist the help of an accountant or CPA.

Finding the right accounting professional for your business is important, especially if you are looking for industry-specific advice about growth, taxes, and compliance. In this article, we’ll cover everything you need to know about finding a good accountant or CPA, including when you need to bring in an expert and what questions to ask potential candidates.

What is an Accountant?

An accountant is a professional that manages the financial transactions in your business. This might entail making adjusting journal entries, verifying the accuracy of transactions, drafting financial reports, and handling other bookkeeping tasks. Some accountants also take on the role of tax planning and preparation, helping your business project upcoming tax liabilities, filing annual tax returns, and communicating with the IRS and other state agencies on your behalf.

Is a CPA the Same as an Accountant?

All CPAs are accountants, but not all accountants are CPAs. A Certified Public Accountant (CPA) license means the individual has passed a rigorous examination process administered by the state’s accounting board.

Since CPAs have to pass an exam, complete regular continuing education, and abide by state guidelines, they are seen as experts in the field of accounting. Additionally, a CPA license is required to issue assurance reports, such as reviews and audits, giving you access to more services.

Even if the accountant doesn’t have a CPA license, the individual will generally have some formal education, such as a bachelor’s degree in accounting. Moreover, other credentials, like bookkeeping certificates and an associate degree in accounting, are also commonly held by accountants.

When Do You Need a CPA or Accountant?

There’s no set-in-stone answer on when it’s time to bring in an accountant or CPA. In fact, the decision to enlist professional help is dependent on your business goals and operating activities. Nevertheless, here are some indicators that your business could benefit from an accountant or CPA:

You are looking to maximize tax savings.

The tax code is complex, meaning you won’t be able to interpret which credits and deductions your business can take without formal training. If your business is looking to maximize its tax savings, it might be time to bring in an accountant. Accountants can help you tax plan throughout the year, pinpointing actions you need to take to lower your tax bill.

You need an audit.

Sometimes, investors and lenders will request an audit to verify the accuracy of your financial statements and internal controls. A member of your internal bookkeeping team cannot complete an audit. If you have an audit request, you will need to enlist the help of a CPA.

You want accurate financial statements.

Every business should strive to have accurate financial statements, especially SaaS businesses. SaaS business owners have special considerations when it comes to reporting revenue under ASC 606. Working with an accountant ensures your business is reporting accurate revenue on financial statements and tax returns.

You want independent advice.

Accountants and CPAs work independently of your company, meaning they can provide you with advice and strategies free of bias. For example, a commission-based manager might want to pursue a certain activity to generate a higher check. On the contrary, your accountant isn’t compensated based on the financials of your business, giving you access to independent opinions and advice. You had trouble with the IRS in the past. Once you are on the IRS’s radar, you have a higher risk of audits and correspondence going forward. Having an accountant handle tax filings can minimize the likelihood of filing inaccurate data and receiving letters. Additionally, accountants can represent you in front of the IRS during an audit, facilitating a smooth process.

List of Questions to Ask Potential CPAs/Accountants

When it comes to selecting the right accountant, you want to be sure you fully understand the services they offer, their client history, and how they can help your business. Here are some questions to ask potential accountants and the type of response you should look for.

What licenses or credentials do you hold?

Credentials and licenses verify that your accountant has the right training to help your organization. At a minimum, your accountant should have a degree related to accounting. Remember, CPAs can offer assurance services. If this is something you need in your business, be sure the accountant has a valid CPA license.

What industries do you specialize in?

Industry specialization is important for SaaS businesses. After all, a SaaS business model is very different from that of the manufacturing or retail realms. Your prospective accountant should have experience working with SaaS businesses.

What services do you offer?

Some accountants refrain from offering tax services and only focus on bookkeeping and general accounting. If you are looking for an accountant who does it all, be sure their service list fits your needs.

Inquire about services related to tax planning, audit representation, tax filing, general bookkeeping, and financial statement preparation. It can be helpful to make a list of your needs before you talk with an accountant.

How do you meet with clients?

Asking your prospective accountant how they meet with clients is important, especially as virtual services become more common. If you prefer in-person meetings, be sure that the accountant can accommodate this need. In most cases, you will need to source a local accountant.

However, it’s important that your accountant also has virtual capabilities. If you frequently travel or have locations in different states, you want to have the option to jump on a virtual call.

What is your fee structure?

Fees are an important aspect to consider. Ask the accountant about their fee structure. Is it project based or hourly based? If it’s hourly based, what is the rate? If you already have a set of projects in mind, such as the filing of a tax return, ask for a quote.

Accountant fees can quickly add up, meaning you want full transparency into the amount you are paying and the value you are receiving in return.

Who completes the work?

The accountant you interview isn’t always the one completing the work. In fact, it’s not uncommon to have an initial consultation with a partner or managing member in a firm. However, the actual work is completed by lower-level staff and reviewed by upper management.

When interviewing accountants, inquire who is completing the work. You might not always want your projects pawned off to inexperienced staff members. Additionally, if work is being completed by lower-level staff, be sure you aren’t being billed at the partner’s rate.

What common issues do you see in my industry and how do you solve them?

Asking this question gives you an overview of what the accountant knows about your industry. Try to find an accountant that answers beyond basic means. Look for answers that highlight challenges that your business currently faces, such as revenue recognition or tax planning strategies that extend beyond depreciation.

Do you offer audit representation?

This is an important question to ask if you have a pending audit with the IRS or another regulatory agency. It can be difficult and daunting to try and communicate with auditors on your own.

The right accountant will be willing to represent you in the event of an audit. However, accountants aren’t lawyers. Some audits will require you to enlist the help of an attorney or lawyer.

Do you offer year-round services?

Businesses don’t benefit from one-time tax preparation services. In fact, year-round services yield the most advantages for your business. This might include quarterly tax planning and financial statement preparation, growth forecasts, and the answering of random questions that pop up throughout the year.

Your prospective accountant should have the ability to provide quality services year-round, not just during tax season. Additionally, be sure that communication outside of tax season isn’t delayed. Business decisions happen quickly. You don’t want to be waiting days or weeks for a response from your accountant.

Do you have any initial ideas on how my business can grow or save money?

Accountants are also running a business, meaning you want to be sure that they give your business the proper attention. Asking this question lets you know if the accountant reviewed the financials you sent them before the meeting.

Proper meeting preparation indicates that the accountant values your time and wants to bring you on as a client. If you notice that there was no pre-meeting preparation, it can be a red flag about how your business will be treated in the future.

The Bottom Line

Accountants and CPAs can play a major role in the taxation, growth, and compliance of your SaaS business. This makes it important to partner with the right professional. For more tips and tricks for finding a good accountant, reach out today.