Choosing an Accountant to Help You Prepare for Venture Capital Part 2 © Paul Wetton

Now that you have the proper expectations to have for an accountant, how do you find one?  Like in any relationships, common interests and compatibility are important.  It helps if you like the person and have a rapport with them.  Practical matters such as hours of operation and location of their office are important factors too.  Even though this is the age of the internet there are some matters that have to be discussed in person, or times you'll have to drop off paperwork at the last minute (especially during tax season) so a convenient location is helpful.

Ask your friends, business associates and local Chamber of Commerce for referrals.  Even if you are a large business and hiring an entire firm of accountants to work for you, you will most likely be dealing with one primary accountant at the firm.  So when you meet with potential accountants you should find out the following information

• Do they have a CPA?  CPAs have to pass state tests and take re-certifications tests periodically.  Some business actions require a CPA, such as loan applications and audits.  CPAs charge higher fees than non-CPAs, of course.  There are many excellent accountants without CPAs who can provide consulting to you.  It all depends on your needs and type of business that you have.

• What kind of business advice can they offer? You want an accountant that can offer a range of financial and business advice.  To see how creative and knowledgeable the accountant is, ask him for some ideas about how your business could start saving money right now. 

Ask them for examples of clients who have benefited from his advice in the past and what the end results were.  Obviously you don't want an accountant that is creative with the accounting but you do want an accountant that can brainstorm creatively and pose reasonable solutions to your problems and help your business grow in the process.

• Do they view themselves as proficient with technology?  Accounting software such as QuickBooks can be very powerful, assuming the user knows how to use it properly.  What type of software does he use? Can the accountant work with your computer files or is he reluctant to deal with your file format?  Is the accountant at ease with computers and demonstrate competence?  Does he use the internet?

• Who are their clients?  You want to make sure that the accountant has had business clients similar to you.  It would be very unfortunate if you hired an accountant only to find out later that the accountant has only worked with private individuals and never with business owners.  It's ideal if more than half of the accountant's clients are business owners like you.

• What are their fees?  As the accountant what their typical fees are for certain project and what their hourly rate is and what they charge for expenses.  Request a copy of a rate chart that you can refer to later.  Give him a copy of your previous year's tax returns so that the accountant has a clear idea of the services you will need and can give you accurate quotes. If he charges for very trivial things, like a fax or a two minute phone call, look elsewhere for an accountant.

• Is the accountant active in the local community?  Who does he know that can help you in other aspects of your business?  Do they have connections with bankers, real estate agents, venture capitalists?  Ask him to describe times when he has connected clients with contacts who have helped them grow their business.

• Ask the accountant to explain why you should hire him/her.  Give the accountant an opportunity to explain their skills and why they are the best accountant for your business at this stage.  If you are at the start up phase and seeking seed capital or at a later stage where you need venture capital it's very important that the accountant explain their experience in this area.

Ideally you should interview at least three potential accountants and also contact their references. 

Don't rush your decision; the success of your business depends on a strong support team, of which the accountant is a very important part.