Whether you are a business owner or need help with your personal finances- your relationship with your accountant is one of the most important financial relationships you will ever have. A good accountant will be with you for the long term, and will have your back not only when it comes to filing your returns on time, but also in advising you of pitfalls and opportunities for yourself and your business. When you select an accountant you are selecting an advisor not just a number cruncher.
3 Tips for choosing the right accountant
1. Ask for referrals from other business owners or professionals, especially in the same or similar industry.
2. Ask the accountant for a few additional references, again, preferably other business owners or professionals, especially those in similar line of business. Do reach out to these and arrange a brief call if they’re open to it.
3. Have an interview with your short list - at least 2-3; they may call this an initial consultation, but it’s an interview from your end.
How to Interview an Accountant
- They should ask you about yourself and your business- listen for what type of questions they ask and if they later come back to any of the information with follow-up questions, suggestions, issues to discuss further, etc. Are they providing value right off the bat? Are they listening to you? Do you like them?
- Come prepared with some of your own questions. Some of these will be general questions about their experience, background, history, type of clients, qualifications, fee structure, project process, etc.
- Re-read some of the points raised in our last blog for other items you will want to find out about their practice.
- Be sure to also have a few more technical questions to ‘test’ their knowledge. You don’t need to go into great detail and you don’t really need to know the answer yourself. Here are some good ones:
What are some of the ways you are tackling the new passive investment rules for private companies?
Should I still consider a family trust for income splitting purposes in light of Tax on Split Income?
I am considering purchasing some used equipment - is there a better time to buy, from a tax perspective? Will I qualify for accelerated tax depreciation on this?
Take them for a test drive
Consider working on a specific, small project with the prospective accountant - a task with a fixed deliverable and timeline - before committing to fully switching over your business to them.
Here are some short projects that fit the bill...
- If it’s close to year-end (or right after) - engage them to perform a tax-optimization plan for your compensation package this year (dividend vs. salary, etc.), or if you received a letter from the CRA about a limited review of a past tax return, let them handle it for you.
- You can get them to prepare a personal tax return for one of your family members before doing anything business related. If nothing comes to mind, or you’re not comfortable having them file anything for you just yet.
- Another great option is to give them you current or last year return to review, and see if they can make any helpful recommendations (or catch any omissions / missed opportunities).
Lozynsky CPA is a boutique, full service accounting firm proudly serving clients in Southern Ontario. We specialize in helping business owners and their families achieve their financial goals. At the heart of everything we do is helping you define and achieve success.