How to choose the right accountant for small business

Published Monday 30 March 2026

Table of contents

• What does an accountant do for a small business?
• When to hire an accountant for your small business
• Types of accountants explained
• Top tips for choosing an accountant
• Choose a certified or chartered accountant
• Look for an accountant with relevant expertise
• How much does an accountant cost for a small business?
• Ask yourself if location matters
• Find out what software the accountant uses
• Decide how the accounting work will be divided
• Get someone who's proactive about saving you money
• Talk to government and business associations
• Tap into your social networks
• Make use of your connections online
• Five ways to use your social network for more information
• Interview several candidates before you decide
• Always negotiate fees
• Do background checks
• Learn to use and trust your intuition
• Good accountants will help your company grow
• FAQs on choosing an accountant for your small business

Key takeaways

• Hire a certified or chartered accountant when your business reaches complexity milestones like applying for loans, managing payroll, or preparing for significant growth, as they have the advanced qualifications needed for strategic financial guidance.
• Choose an accountant with relevant industry experience and compatible accounting software to ensure efficient collaboration and accurate financial management without data transfer complications.
• Divide accounting tasks strategically by handling basic data entry and invoicing yourself while delegating complex work like tax preparation and financial analysis to your accountant to maximise cost efficiency.
• Interview at least three candidates and negotiate fees upfront, comparing different pricing models like hourly rates, monthly retainers, or project-based fees to find the best fit for your budget and business needs.

What does an accountant do for a small business?

An accountant does more than just file your taxes. They can be a key advisor, helping you understand your finances and make smarter business decisions.

They handle core tasks like bookkeeping, preparing financial statements, and managing payroll. They also ensure you stay compliant with tax laws and filing deadlines. Beyond the basics, a good accountant offers strategic advice on cash flow, budgeting, and growth opportunities, turning your financial data into a roadmap for success. This is a critical function, as 82% of business failures are due to poor cash flow management.

When to hire an accountant for your small business

Knowing the right time to hire an accountant can save you from future headaches and set your business up for growth. While you can manage the books yourself at the start, certain signs show it's time for professional help.

Consider hiring an accountant when your finances become too complex to handle, you're spending too much time on bookkeeping instead of running your business, or you're preparing for a major change like hiring employees or seeking a loan. Hiring an expert early helps you build a strong financial foundation.

Types of accountants explained

Not all accountants are the same. Understanding the different types helps you choose the right professional for your specific needs.

A Chartered Accountant (CA) or Certified Public Accountant (CPA) has advanced qualifications and can handle complex accounting and tax matters. A bookkeeper focuses on daily financial tasks like recording transactions and reconciling accounts. You might work with a bookkeeper for day-to-day finances and a CA or CPA for year-end taxes and strategic advice.

Top tips for choosing an accountant

Choosing the right accountant means finding someone who fits your business needs, budget, and working style. The right person saves you time and money year after year.

Here's what to consider when choosing an accountant:

• Qualifications: are they certified or chartered?
• Expertise: do they understand your industry and business size?
• Cost: what pricing model works for your budget?
• Location: do you need someone local or can you work remotely?
• Software: will they use accounting tools compatible with yours?
• Working style: how will you divide the accounting workload?

Choose a certified or chartered accountant

Certified and chartered accountants are professionals regulated by official bodies that set qualification standards and enforce ethical practices. Depending on your location, they may be called Certified Public Accountants (CPAs) or Chartered Accountants (CAs).

These accountants have completed degree-level study, workplace experience, and professional competence programmes. In the US, for example, all states require CPAs to complete a minimum of a bachelor's degree and 150 total hours of college education.

When you need a certified or chartered accountant:

• applying for business loans or investment
• preparing for an audit
• managing complex tax situations
• planning for significant business growth

When you might not need one:

• basic bookkeeping and transaction recording
• simple tax preparation for sole traders
• general financial management for very small operations

If you're unsure, start with a qualified accountant. It's easier to build a relationship early than to switch providers as your needs become more complex.

Look for an accountant with relevant expertise

Relevant expertise means your accountant has experience with businesses similar to yours in size, revenue, and industry. This helps them understand your specific challenges and opportunities.

Look for an accountant who has:

• Size match: experience with companies of similar revenue and employee count
• Industry knowledge: familiarity with your market sector and its unique requirements
• Growth experience: a track record of helping clients scale over time
• Technology skills: comfort with cloud-based software if that's how you work

Questions to ask when evaluating expertise:

• can you share examples of clients in my industry?
• what's the typical size of business you work with?
• how have your clients grown since working with you?
• what accounting software are you most experienced with?

How much does an accountant cost for a small business?

The cost of an accountant varies based on your needs, location, and the accountant's experience. Understanding the common pricing models helps you find a solution that fits your budget.

Fees can be hourly, a fixed monthly retainer, or project-based. A monthly retainer for ongoing services might be a few hundred dollars, while a one-off project like a tax return will have a set price. For small businesses, the annual cost usually falls between $1,000–$5,000, with hourly rates typically between $50–$400. Think of it as an investment. The right accountant can save you more than they cost by identifying tax savings and improving your financial efficiency.

Ask yourself if location matters

Your accountant doesn't need to be local if you're comfortable collaborating online. Cloud accounting lets you and your accountant view the same real-time data from anywhere.

The right choice depends on how you prefer to work:

Remote accountants work well if you:

• prefer communicating via email, video calls, or secure software
• want access to specialists who understand your specific industry
• don't need someone at in-person meetings

Local accountants work well if you:

• prefer face-to-face contact for complex discussions
• need someone to attend business meetings with you
• want to build a closer working relationship in person

Wherever your accountant is based, make sure they're an expert in the tax laws that apply to your business.

Find out what software the accountant uses

Software compatibility between you and your accountant prevents data-sharing headaches and security risks. Using the same accounting platform means you both see identical, real-time information, which can help build confidence, as research shows nearly 40% of CFOs do not completely trust the accuracy of their organisation's financial data.

Why software compatibility matters:

• Efficiency: no time wasted exporting, converting, and importing data
• Accuracy: fewer errors from manual data transfers
• Security: no sensitive financial data sent via email
• Visibility: both parties see the same up-to-date information

What to look for:

• an accountant who uses the same software you do
• willingness to adopt your preferred platform if needed
• experience with cloud-based accounting tools
• built-in encryption for secure collaboration

Cloud-based accounting software with shared access is the most secure and efficient option. You and your accountant can work from the same data without exchanging files.

Decide how the accounting work will be divided

Dividing the accounting workload between you and your accountant can save money and keep you closer to your finances. Since accountants often charge by the hour, handling simple tasks yourself frees them for higher-value work.

Tasks you can handle in-house:

• entering basic transaction data
• creating and sending invoices
• tracking receipts and expenses
• categorising routine transactions

Tasks to delegate to your accountant:

• bank account reconciliation
• tax return preparation
• payroll processing
• capital depreciation calculations
• financial reporting and analysis

Cloud-based accounting software makes this division easier. You can handle day-to-day entries, then give your accountant secure access to review and complete the more complex work.

Get someone who's proactive about saving you money

A proactive accountant does more than complete your tax returns. They actively look for ways to reduce your tax bill and improve your financial position, which is why 71% of small companies outsource their tax preparation.

Questions to ask about tax savings:

• what operating costs can I offset against tax?
• can I claim portions of phone, car, or home office expenses?
• what are the implications of claiming these deductions?
• are there any pitfalls I should know about?

For example, using your home as business premises might trigger a tax charge when you sell it. A good accountant will explain both the benefits and risks of any strategy.

Tax avoidance vs tax evasion:

• Tax avoidance: using legal methods to minimise your tax bill
• Tax evasion: illegally hiding income or misrepresenting finances

You need an accountant who knows tax law well enough to save you money legally, without crossing into risky territory. Remember: if something goes wrong, you as the business owner bear the consequences.

Talk to government and business associations

Government and business associations offer free resources to help you find the right accountant. These organisations exist to support small business growth.

Where to find accountant recommendations:

• Government small business advisors: many countries offer free advisory services for small business owners
• Chambers of commerce: local business networks often maintain lists of vetted professionals
• Industry associations: sector-specific groups may recommend accountants with relevant expertise
• Small business development centres: these provide guidance on key business decisions, including hiring professionals

Networking through these organisations can also connect you with other business owners who may recommend accountants they trust.

Tap into your social networks

Ask friends and family who own small businesses if they'd recommend their accountant. Find out why or why not, as their answers can help you identify what to look for.

Keep in mind that accountant fit varies by business type:

• an accountant suited for a PR consultancy may not fit a manufacturing company
• a sole trader's accountant may not handle the needs of a 10-person team
• industry-specific experience matters more for some sectors than others

Use referrals as a starting point, then evaluate each candidate against your specific business needs.

Make use of your connections online

LinkedIn and other professional networks can help you find accountants recommended by people you trust. Search for accountants in your area, check their recommendations, and see who in your network has worked with them.

Five ways to use your social network for more information

Once you've identified potential accountants through your network, dig deeper into their professional background.

Use LinkedIn or other professional networks to research each candidate's background:

• Check their connections: do they have a strong network of business professionals?
• Review their content: do they communicate clearly and show genuine interest in their work?
• Read their recommendations: what do past clients say about working with them?
• Verify their experience: how long have they been in business, and what's their background?
• Confirm their qualifications: are they a chartered accountant, CPA, bookkeeper, or financial advisor?

Interview several candidates before you decide

Interview at least three accountants before making your decision. Comparing candidates helps you understand what's available and clarifies what you actually need.

Benefits of interviewing multiple candidates:

• Better comparison: you'll spot differences in expertise, communication style, and pricing
• Clearer requirements: each conversation helps you refine what you're looking for
• Free insights: candidates often share useful advice during interviews
• Confidence: you'll know you've made an informed choice

Always negotiate fees

Accountants use different pricing models, and the right one depends on your business size and needs. Understanding your options helps you negotiate effectively.

Common pricing models:

• Hourly rates: pay for time spent on your accounts
• Monthly retainer: fixed fee for ongoing services
• Percentage of turnover: fees scale with your revenue
• Project-based: one-time fee for specific tasks like tax preparation
• Hybrid: combination of models to suit your situation

How to negotiate fees:

• get written quotes from all candidates you interview
• compare how each fee structure works at your current size and projected growth
• ask about sliding scales or combined pricing methods
• consider what happens to costs as your business expands

Don't assume prices are fixed. Many accountants will adjust their fee structure if you ask.

Do background checks

Ask for client references before signing with an accountant. A genuine professional will provide contacts you can speak with directly.

Questions to ask references:

• how long have you worked with this accountant?
• how responsive are they when you have questions?
• have they helped you save money or avoid problems?
• what's their communication style like?
• would you recommend them to a business similar to mine?

A brief phone call tells you more than a written questionnaire. Aim for 10 minutes and focus on the working relationship, not just technical competence.

Learn to use and trust your intuition

Trust your instincts when evaluating accountants. After checking qualifications, pricing, and references, ask yourself whether you could trust this person with the details of your business.

Your intuition picks up cues that logical analysis might miss:

• do they listen carefully to your questions?
• do they explain things clearly without being condescending?
• do you feel comfortable asking them follow-up questions?
• can you see yourself working with them for years?

If something feels off, pay attention. You're choosing someone who'll have access to sensitive financial information and influence important business decisions. When your gut says no, it's usually worth walking away.

Good accountants will help your company grow

The right accountant becomes a trusted partner in your business growth. They manage complex financial work, offer practical advice, and help you make better decisions.

A good accountant will:

• save you time on tasks you shouldn't be doing yourself
• reduce your tax bill through legal strategies
• keep you compliant with regulations
• provide insights that help your business grow

Ready to find an accountant who understands your business? Search for experienced, Xero-certified accountants in the advisor directory who can start helping you from day one.

If you're not using Xero yet, see why small businesses and their accountants choose Xero. Try Xero free for one month.

FAQs on choosing an accountant for your small business

Still have questions about finding the right accountant? Here are answers to common questions small business owners ask.

Can I do my own accounting instead of hiring an accountant?

Yes, if your business is simple and you're comfortable with basic bookkeeping. However, as your business grows or tax situations become complex, professional help reduces errors and often saves more than it costs.

When is the best time to start working with an accountant?

Consider hiring an accountant when you're spending significant time on bookkeeping, your tax situation becomes complex, you're hiring employees, or you're planning for growth. Starting early builds a relationship before you urgently need help.

What's the difference between a bookkeeper and an accountant?

Bookkeepers record daily transactions and maintain financial records. Accountants analyse financial data, prepare tax returns, provide strategic advice, and typically hold professional certifications like CPA or CA.

Should my accountant be local or can they work remotely?

Either works, depending on your preference. Cloud accounting software lets you collaborate effectively with remote accountants. Choose local if you prefer face-to-face meetings or need someone at in-person business discussions.

How do I know if my accountant is doing a good job?

Look for timely responses to questions, accurate and on-time tax filings, proactive advice that saves you money, clear explanations of your financial position, and no surprises at tax time.