Choose the right accountant: a practical approach
Choosing a tax consultant or accountant starts with clear goals and ends with a professional relationship you can rely on. This guide walks you through what to prepare, how to compare scopes of service and credentials, which questions to ask, typical fee structures, communication expectations, data-privacy practices to request, and a method for comparing multiple professionals.
Quick selection steps
1. Define your need: list whether you want a one-time tax return, ongoing bookkeeping, quarterly advisory, payroll setup, or a finance cleanup before year-end.
2. Gather documents (see checklist below) so you can present the same set of information to each candidate for an apples-to-apples comparison.
3. Shortlist professionals by credentials, industry experience, and service descriptions; request scope summaries and sample engagement terms.
4. Interview at least two candidates, asking the standard questions below and noting communication style, response time, and clarity of answers.
5. Compare fees, deliverables, security practices, and references; pick the best match for the relationship you expect to maintain.
Documents and information to prepare before you reach out
- A brief summary of what you need help with (one paragraph: business size, activities, deadline or recurring cadence).
- Recent financial statements (profit & loss, balance sheet) or last 2–3 months of bank statements if financials aren’t prepared.
- Last two years of tax returns (if you have them) and any IRS/state notices or correspondence that relate to current issues.
- Payroll records, contractor 1099s or equivalent, and details on employee counts and benefits.
- Access information for accounting systems (QuickBooks, Xero), point-of-sale platforms, or payroll providers—note that you may grant view-only access later.
Differences in service scope: how professionals typically differ
- Bookkeepers: handle transaction recording, reconciliations, and basic reports. They generally do not provide tax-return signing authority or advanced tax advice.
- Accountants/CPAs: provide accounting, tax preparation, and attest services (where licensed). CPAs may represent clients before tax authorities in many jurisdictions.
- Enrolled agents (EAs): federally authorized tax practitioners who specialize in tax matters and representation before tax authorities.
- Tax attorneys: focus on legal aspects of tax issues such as disputes, appeals, or matters where legal privilege or litigation could be involved.
- Fractional CFOs or advisors: offer strategic financial planning, cash-flow forecasting, and board-level reporting for growing businesses; typically higher fees and ongoing commitments.
Compare core service features when evaluating candidates
What they will deliver and when
Clear list of tasks, formats for reports or returns, estimated timelines, and responsibilities (what you must provide).
License, specialties, and industry experience
Professional designations (CPA, EA, attorney), years in practice, and experience in your industry or business size.
How fees are charged and billed
Hourly vs fixed vs retainer vs project; any estimated total and clear list of likely additional charges.
Primary channels and expected response times
Preferred tools (email, phone, secure portal), meeting cadence, and expected turnaround for routine questions.
How client data is protected
File transfer methods, encryption, storage location, access controls, and data-retention policies.
Questions to ask during an initial conversation
- Can you describe services you offer and any services you do not provide?
- Which credentials do you hold and are you licensed to practice in my state/jurisdiction?
- How do you bill: hourly, fixed fee, monthly retainer, or project? What is included and what triggers extra fees?
- What is your preferred secure method for exchanging documents and what privacy controls do you use?
- Who on your team will handle my work and who will I contact for questions?
- Can you provide references or case descriptions (no identifying details) from clients with similar needs?
Common fee structures and what to watch for
- Hourly: pay for time spent. Ask for an hourly range and an estimate of hours for your engagement.
- Fixed-fee per deliverable: a set price for a return or project. Confirm exactly what the fixed fee covers and extra-charge scenarios.
- Monthly retainer: predictable monthly cost for ongoing services. Check termination terms and scope limits.
- Project-based milestone billing: payments tied to deliverables. Helpful for larger cleanups or migrations.
- Upcharges to watch: emergency filings, amended filings, representation time, or user-portal setup fees—ask for examples of additional charges.
Set clear communication expectations up front: agree on response times for routine messages (e.g., 48 hours), which channel to use for urgent items, and a meeting cadence (monthly, quarterly, annual). Confirm who will be your primary contact and whether junior staff may work on your files under supervision.
How to compare professionals objectively
1. Build a scorecard with criteria: credentials (20%), scope fit (20%), communication (15%), pricing transparency (15%), security (15%), and relevant experience (15%).
2. Rate each candidate on a 1–5 scale per criterion and total the scores to see strongest matches.
3. Consider intangibles: ease of conversation, willingness to explain, and clarity of engagement terms—these affect day-to-day working relationships.
Frequently asked questions
Do I need a CPA to prepare tax returns?
Not always. Different professionals can prepare tax returns depending on the jurisdiction and complexity of your situation. Focus on the person’s experience with your type of return and the services they explicitly offer.
How should I share sensitive documents?
Prefer secure client portals or encrypted file-transfer services. If a practitioner insists on standard email for sensitive files, request an explanation of their encryption and retention practices first.
What if my needs change after engagement starts?
Ask about change-order procedures, how additional work is estimated and billed, and whether retainer agreements can be amended or canceled with notice.