Choosing an accountant is an important decision, particularly when you are managing your business by yourself. Reliable accountants will do more than prepare your tax return. They can support better business decisions, help you stay compliant with HMRC, and potentially save you thousands of pounds over time.
But how can you distinguish a genuinely helpful professional from someone who sends generic emails once a year and is difficult to reach? There are questions you can ask that can help you look beyond the sales pitch and find an accountant who truly understands your business and the tax requirements for sole business owners.
Questions to Ask Before Hiring an Accountant
Are you a licensed CPA, and can I verify your credentials?
Begin by checking their professional credentials. Ask whether they are a licensed CPA or an Enrolled Agent (EA), and verify the credential before hiring. If they do not have formal credentials, make sure you understand that too. Other certifications to consider include CMA (Certified Management Accountant), which focuses on internal business finances, and CFP (Certified Financial Planner), which is useful for personal financial planning.
Credentials are important because only a licensed CPA, EA, or attorney can legally represent you before the IRS. A regular accountant or bookkeeper does not have the same authority. However, an uncredentialed bookkeeper may still be a good choice for maintaining accurate books and handling routine monthly categorisation.
What does your fee include, and how are your charges structured?
Comparing prices can be difficult when each firm structures its services differently. Accountants might use hourly charges, monthly retainers, fixed project fees, or value-based pricing depending on the scope.
Ask each candidate to explain exactly how their fees work, what may lead to extra charges, and how they deal with one-off questions during the year. Always request a written engagement letter outlining services and costs before work starts, and ask every finalist for a written quote so you can compare fairly.
Do you have references from clients in a similar industry?
References reveal how an accountant performs once the initial sales conversation is over. Request two or three current or recent clients who operate in your industry or are at a similar business stage.
When you speak with them, ask about the accountant’s responsiveness, accuracy, communication, initiative, and whether their support has kept pace with the client’s growth. If they avoid providing references or rely only on vague testimonials from their website, consider it a potential red flag.
What experience do you have working with clients in my field?
Industry experience can make a big difference in the quality of financial advice you receive. For example, a CPA experienced with SaaS companies will already understand matters such as recurring revenue and deferred revenue. At the same time, someone who regularly works with restaurants will be familiar with employee tips and food cost margins. If an accountant has no experience in your industry, you may end up paying them to learn the basics.
Ask them to share real examples of tax issues they have handled. For instance, they may have helped an ecommerce business with sales tax nexus or assisted a software company with an R&D tax credit. Specific examples are more valuable than general explanations.
Which key financial indicators will you monitor for my business?
A monthly P&L report is just the beginning. A capable accountant should suggest relevant financial metrics depending on your model of business:
- Profit margins: Gross and net margins are useful for most businesses.
- Cash burn and runway: Important for startups to track spending.
- AR ageing: Helpful for service businesses that take longer to collect payments.
- Debt-to-debt ratio: Useful if you have existing loans or plan to raise funding.
- Customer acquisition cost and lifetime value: Important metrics for subscription-based businesses.
Ask the accountant how each metric can support your upcoming business decisions. They should be able to explain what the numbers mean and how you can use them.
How do you protect my financial information?
Bank details, payroll information, and tax IDs are sensitive data your accountant will handle, so ask about their security measures. Find out about:
- Encryption: Are your files encrypted both during transfer and while stored?
- Secure file sharing: Do they use a secure client portal such as SmartVault, ShareFile, or TaxDome instead of emailing documents?
- Data retention: How long are your records stored, and what process is used to delete old files securely?
- Access controls: Can they use a role-based, view-only, or restricted account rather than requiring access to your main administration login?
Security-related questions should not make a potential accountant uncomfortable. They should already have straightforward answers ready.
What is your preferred communication method, and how quickly do you typically respond?
A clear response-time commitment matters most when payroll deadlines are approaching, or you receive a tax notice. Accountants manage communication differently: some reply within an hour, while others respond to emails in weekly batches. Discuss their preferred communication methods, expected reply times, meeting schedules, and availability during tax seasons.
As a general benchmark, choose an accountant who can respond within 24-48 hours during regular periods and provide same-day replies during tax season. This helps maintain consistent communication throughout the year, with faster support as deadlines approach.
What do you need to get started, and what’s the onboarding process?
Onboarding should feel organised and consistent, not rushed or improvised. Expect a good accountant to ask for:
- Previous year tax returns.
- Bank and credit card statements.
- Payroll information and any 1099s issued.
- Business formation paperwork.
- Current bookkeeping records or access to your accounting software.
Ask what you should receive within the first 30,60, and 90 days. A vague response may suggest the firm lacks a well-defined onboarding process. It’s a bonus if they offer to manage the setup.
Do you identify financial risks and potential savings opportunities to save money?
Discuss risks and potential savings before you discover the problem yourself. Ask the candidate to give a specific example of when they identified an issue or opportunity before the client noticed it.
How do you ensure I am claiming all the tax deductions and credits I qualify for?
Tax deductions and credits are based on the information recorded in your books. While most tax preparers can complete a tax return, the real value comes from legally reducing the amount of tax you owe. Ask whether they actively check for:
- Industry-related credits such as the R&D credit, WOTC, or energy incentives.
- Section 179 deductions and bonus depreciation for equipment or vehicle purchases.
- Home office deductions for business owners who work from home.
- Vehicle deductions, including actual expenses versus the mileage method.
- Health insurance deductions and HSA contributions for self-employed owners.
Their response should include real examples of deductions they have identified for previous clients, rather than simply saying they will review everything at the end of the year.
Conclusion
Hiring the right accountant is a major financial decision, so choose carefully. Asking the right questions can help you. Whether you’re a small business owner, freelancer, or simply seeking reliable financial advice, the right accountant can become a trusted long-term partner in your financial success.
If you want to hire a trustworthy professional accountant, contact AZ Accounting Ltd for the best CPAs and bookkeepers available in your vicinity.