- Table of Contents
- Key Takeaways
- Why Hiring the Right Accountant Matters
- Understanding Different Types of Accountants
- Certified Public Accountants (CPAs)
- Enrolled Agents (EAs)
- Tax Preparers
- Bookkeepers
- The Process of Finding a Good Accountant
- Start With Referrals and Recommendations
- Research Professional Directories
- Evaluate Specialization and Experience
- Questions to Ask Before Hiring
- Professional Qualifications
- Fee Structure and Process
- Operational and Communication Expectations
- References and Background
- Flags">Red Flags to Watch For
- Frequently Asked Questions
- Q: What's the difference between a CPA and an Enrolled Agent?
- Q: When should I hire an accountant?
- Q: How much should I expect to pay for accounting services?
- Q: What records should I keep for my accountant?
- About the Author
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How to Find a Good Accountant and What to Ask Before Hiring One
Category: Tax and Accounting
Table of Contents
Key Takeaways
- A qualified accountant can save you thousands of dollars annually through tax optimization and deduction identification
- Verify credentials including CPA certification, which requires passing the Uniform CPA Examination
- Ask about experience with your specific business type, industry, and financial situation
- Discuss fees upfront—whether they charge hourly rates, flat fees, or percentage-based pricing
- Request references from current clients to validate expertise and reliability
- Ensure your accountant stays updated on current tax laws and regulations
Why Hiring the Right Accountant Matters
Choosing the right accountant is one of the most important financial decisions you’ll make, whether you’re a small business owner, self-employed professional, or individual with complex tax situations. According to the IRS, approximately 1 in 200 tax returns are audited annually, and having a qualified accountant can significantly reduce your risk while ensuring maximum compliance and optimization of your finances.
A skilled accountant can help you:
- Identify tax deductions you might otherwise miss
- Establish proper business structures to minimize tax liability
- Plan for retirement and long-term financial goals
- Navigate complex regulatory requirements
- Maintain accurate financial records
- Prepare for potential audits
The cost of hiring a professional accountant typically ranges from $150 to $400 per hour, depending on location and expertise, but the tax savings often exceed these fees many times over.
Understanding Different Types of Accountants
Before you begin your search, it’s crucial to understand the different types of accounting professionals available:
Certified Public Accountants (CPAs)
CPAs have met rigorous educational and examination requirements set by their state boards. They’ve completed at least 150 credit hours of accounting and business education and passed the comprehensive Uniform CPA Examination. CPAs can represent clients before the IRS and offer the broadest range of accounting services.
Enrolled Agents (EAs)
Enrolled Agents are tax specialists who have passed the IRS Special Enrollment Examination. While they may not provide full accounting services like CPAs, EAs can represent taxpayers in all matters before the IRS. They’re excellent choices for complex tax situations and are often more affordable than CPAs.
Tax Preparers
Tax preparers typically focus solely on tax return preparation and may or may not hold professional certifications. They cannot represent you before the IRS unless they’re also CPAs or Enrolled Agents.
Bookkeepers
Bookkeepers maintain financial records and process transactions but don’t provide tax advice or strategic planning. They’re excellent support staff but shouldn’t be your primary accountant for complex tax matters.
The Process of Finding a Good Accountant
Start With Referrals and Recommendations
Your network is often your best resource. Ask for recommendations from:
- Business colleagues and peers in your industry
- Your attorney or financial advisor
- Professional associations related to your field
- Friends and family members with similar business situations
- Your bank or credit union
Personal referrals come with implied endorsements and allow you to ask specific questions about the accountant’s performance and communication style.
Research Professional Directories
Use official directories to verify credentials:
- AICPA Directory (American Institute of CPAs) – find CPAs in your area
- NAEA Directory (National Association of Enrolled Agents) – locate EAs by specialty
- State Board of Accountancy – verify licenses and disciplinary records
- Better Business Bureau – check ratings and complaint history
- Online reviews – Google, Yelp, and industry-specific platforms
Evaluate Specialization and Experience
Look for accountants with specific experience in your situation. For example, if you own a dental practice, find someone who works with healthcare professionals. Specialized accountants understand industry-specific deductions and compliance requirements that general accountants might miss. Ask potential candidates about:
- Years of experience in your industry
- Number of clients in similar situations
- Specific challenges they’ve helped clients overcome
Questions to Ask Before Hiring
Professional Qualifications
1. What are your professional credentials and licenses?
Ask specifically about CPA or EA status, state licensing, and continuing education requirements they meet annually. CPAs are required to complete 40 hours of continuing professional education every two years.
2. Are you licensed in our state?
Verify they’re licensed in your state of residence and can legally provide the services you need.
3. Do you have experience with businesses like mine?
Ask for details about their experience with your specific business type, size, and complexity level.
Fee Structure and Process
4. How do you charge for your services?
Understand their fee structure completely. Common options include:
- Hourly rates: $150-$400+ per hour
- Flat fees: Fixed price for specific services
- Retainer fees: Monthly payment for ongoing services
- Percentage-based: Fee tied to business revenue or assets managed
Request estimates in writing and ask about additional charges for unexpected complexity.
5. What services are included in your fee?
Clarify what your payment covers and what incurs additional charges. Some accountants bundle tax preparation with quarterly consultations, while others charge separately.
Operational and Communication Expectations
6. How often will we communicate?
Discuss preferred communication methods (email, phone, in-person meetings) and frequency. A good accountant should schedule at least quarterly check-ins for business owners to discuss tax planning.
7. What information do you need from me?
Understand the documentation and record-keeping requirements upfront to ensure smooth working relationships.
8. How do you stay current with tax law changes?
Ask about their continuing education and how they keep clients informed about tax law changes affecting them.
References and Background
9. Can you provide references from current clients?
Request at least three references from clients in similar situations. A confident, experienced accountant will readily provide this information.
10. Have you ever been subject to disciplinary action?
Ask directly and verify through state licensing boards. This is public information.
Flags“>Red Flags to Watch For
Avoid accountants who:
- Guarantee specific tax outcomes – No legitimate accountant can guarantee refunds or specific results
- Lack professional credentials – Verify CPA or EA status independently
- Resist providing references – Experienced professionals have satisfied clients willing to recommend them
- Won’t discuss fees upfront – Transparent pricing is essential for trust
- Don’t ask about your situation – Good accountants ask detailed questions before providing advice
- Pressure you into aggressive tax positions – Red flag for potential audit risk
- Use outdated technology – Modern accounting software improves accuracy and efficiency
- Won’t communicate regularly – You should feel supported and informed throughout the year
Frequently Asked Questions
Q: What’s the difference between a CPA and an Enrolled Agent?
A: CPAs have broader credentials and can provide comprehensive accounting, auditing, and consulting services. Enrolled Agents specialize in taxation and can represent you before the IRS but typically offer more limited services than CPAs. Both can represent you in IRS matters. For complex business accounting needs, a CPA is usually better. For straightforward tax issues, an Enrolled Agent may be more cost-effective. The best choice depends on your specific needs and complexity.
Q: When should I hire an accountant?
A: Ideally, hire an accountant before starting a business or when your financial situation becomes complex. Good timing includes: when you start a business, when your income exceeds $100,000 annually, if you have rental properties, if you’re self-employed, or when you experience significant life changes like marriage or inheritance. Starting early allows your accountant to implement proper structure and tax planning strategies from the beginning.
Q: How much should I expect to pay for accounting services?
A: Costs vary widely based on location, complexity, and professional credentials. Simple individual tax returns may cost $200-$500, while business accounting can range from $2,000-$10,000+ annually depending on the company’s size and complexity. Many accountants charge hourly rates between $150-$400 per hour. Request estimates in writing and compare multiple professionals. Remember that the cheapest option isn’t always the best—consider the accountant’s expertise and potential tax savings they might provide.
Q: What records should I keep for my accountant?
A: Keep all financial documentation including receipts, invoices, bank statements, credit card statements, and expense records for at least seven years (the IRS can audit back that far in some cases). Organize documents by category (business expenses, medical expenses, charitable donations, etc.) and maintain both paper and digital copies when possible. Modern accounting software can integrate directly with your bank accounts, automating much of this record-keeping. Ask your accountant what specific records and format they prefer.
About the Author
Sarah Mitchell is a tax and accounting specialist with over 12 years of experience helping small business owners and self-employed professionals optimize their finances. She holds a Bachelor’s degree in Accounting from the University of California and is a certified member
