Nine tips to hire and get the most out of a rock star accountant for your startup
Finance is not an area to take lightly – one mistake and you can go bankrupt.
Studies on business failure regularly find that poor accounting and financial planning are the second leading cause of company declines.
Tracking your business finance with some simple bookkeeping software has become relatively easy.
But when your startup grows, your needs will evolve too and it makes sense to hand over responsibilities to specialists.
If your startup has closed a seed round, you’ll need a CFO to set the overall strategy and manage your accounting team. Up until then an accountant can be a valuable asset.
So don’t take this advice lightly. Set up your accounting software today, and make sure you know what person to look for when the time to hire an accountant comes.
The right accountant can help with tax returns, long-term planning, business planning, networking, and even prepare your books for fundraising. But how do you find the right accountant? Here’s some guidance.
1. Verify their certifications
Don’t assume every accountant is a CPA. Ask about it. A CPA has an undergraduate degree and meets the requirements for state certification. A Certified Management Accountant (CMA) is qualified to meet accounting requirements but also meets the criteria to be part of the management.
2. Seek someone with industry expertise
In addition to certifications, you should look for some type of expertise in your industry or industry that’s relevant to your market. An accountant who already knows your market will deliver a much better service.
3. Find someone with an early-stage startup experience
Early-stage startups have very different accounting needs from mature startups or big corporations – they’re busy trying to bootstrap, stretch limited funds and cut costs wherever necessary.
The focus has to be on immediate survival, overcoming the challenges that come and making sure there are no skeletons in the closet that could kill a potential investment deal.
4. Work out what services you actually need
Before you go out to seek anyone, ask yourself what kind of assistance your business requires.
Is it a tax or financial planning, financial statements, a business valuation, or managing your cash flow? Obviously, you want someone whose top strengths accurately match your needs.
5. Find the right personality
The person you’re going to hire is the one who will be handling your business. Make sure it’s someone you’ll be able to communicate with.
How do you get along? Are your personalities compatible? Is there a culture fit?
Be particularly careful when hiring an external accountant. At many accounting firms, some partners handle sales and new business then pass the actual account work on to others.
6. Ask for references
Always be sure to ask for references, particularly from clients in your industry. Call them and find out how happy they were with the accountant’s services, fees, attitude and availability.
7. What are their fees?
Ask about this upfront.
A lot of accounting firms charge by the hour and fees range from $100 to $300. However, others work on a monthly retainer.
The best way to approach this is to get a range of quotes from different accountants. Try to get an estimate of the total annual fee based on the services you have discussed.
8. Hire through referrals
If you’ve never worked with someone, it can be difficult to examine how reliable, competent and professional they are. While you may not know the accountant yourself, you can always ask for referrals and find out about quality people from your friends and business partners.
9. Make the most of the relationship
Create a regular communication flow. Meet or at least talk with your accountant every couple of weeks if it’s an external firm. Review the statements yourself and go over the problems so you know where your money is going.
Your accountant should go beyond number-crunching and suggest alternative ways of cutting costs and improving cash flow. S/he should also act as a sounding board for any ideas or questions you have
Mark McDonald is the co-founder and co-CEO Appster, a leading mobile app and product development company with offices in Melbourne and San Francisco.