How to choose an accountant for your small business

Published Friday 31 October 2025

Table of contents

• When to hire an accountant for your business
• Understanding different types of accountants
• Choose a certified or chartered accountant
• Look for an accountant with relevant expertise
• What accounting services will cost
• Ask yourself if location matters
• Large firm vs solo practitioner
• Talk to government and business associations
• Tap into your social networks and online connections
• Decide how the accounting work will be divided
• Find out what software the accountant uses
• Interview several candidates before you decide
• Red flags to avoid when choosing an accountant
• Always negotiate fees
• Do background checks
• Get someone who's proactive about saving you money
• Learn to use and trust your intuition
• Choose an accountant who will help your company grow
• FAQs on choosing an accountant

Key takeaways

• Prioritize certified professionals (CPAs or Chartered Accountants) who can represent you before the IRS, handle complex tax situations, and provide the credentials needed for audited financial statements and loan applications.

• Interview 3-5 candidates with consistent questions to compare expertise, communication styles, and cultural fit while gaining free business advice and clarifying your specific service requirements.

• Verify that your chosen accountant uses compatible cloud-based accounting software or is willing to learn your system, as software compatibility prevents data sharing errors and improves collaboration efficiency.

• Negotiate transparent fee structures by obtaining written quotes from all candidates and understanding how costs will scale as your business grows, typically budgeting 2-5% of annual revenue for accounting services.

When to hire an accountant for your business

The right accountant selection process focuses on five key areas that directly impact your business success:

• Credentials and expertise: Ensure they have relevant qualifications and industry experience
• Cost structure: Understand their fees and how they charge for services
• Technology compatibility: Confirm their software works with your systems
• Service scope: Define what tasks they'll handle versus what you'll manage
• Growth potential: Choose someone who can scale with your business needs

Following these steps helps you avoid costly mistakes and find an accountant who adds value to your business.

Understanding different types of accountants

Accountants can have different roles. Knowing the differences helps you choose the right one for your business.

Here are a few common types:

• Bookkeepers handle daily financial tasks like recording transactions, managing payroll, and reconciling bank accounts. They keep your financial records accurate and up to date.
• Tax accountants specialize in preparing and filing tax returns. This group includes Enrolled Agents, who are federally-licensed practitioners required to pass a comprehensive exam to demonstrate proficiency in federal tax planning, preparation, and representation, helping you minimize your tax liability legally.
• Certified Public Accountants (CPAs) have passed a rigorous exam and met state licensing requirements. They can offer a wide range of services, including tax advice, financial planning, and auditing. Their certification provides an extra layer of trust and expertise.

Choose a certified or chartered accountant

Professional accounting credentials indicate the level of training and expertise your accountant has completed:

Certified Public Accountant (CPA):

• Passed rigorous licensing exam and continuing education requirements
• Can represent you before the Internal Revenue Service (IRS) and handle complex tax situations
• Required for audited financial statements and loan applications

Chartered Accountant (CA):

• Completed degree-level study plus workplace experience
• Internationally recognized qualification with high professional standards
• Suitable for complex business structures and international operations

Non-certified accountants and bookkeepers:

• Can handle basic bookkeeping and simple tax preparation
• Cost less but have a limited scope of services; for example, the IRS states that uncredentialed preparers are authorized to prepare tax returns, but this is the only authority they have and they cannot represent clients before the IRS.
• May not be sufficient as your business grows or faces audits

Choose certified professionals from the start if you plan to grow, need loans, or have complex tax needs.

Look for an accountant with relevant expertise

Relevant expertise means finding an accountant whose experience matches your business needs:

Business size experience:

• Should handle companies with similar revenue and employee count
• Ask for client examples in your size category
• Confirm they can scale services as you grow

Industry specialization:

• Look for experience in your specific sector (retail, construction, professional services)
• Industry knowledge means better tax strategies and compliance understanding
• Sector expertise helps with benchmarking and business advice

Technology proficiency:

• Must be experienced with cloud-based accounting software
• Should understand integrations with banks, payroll, and e-commerce platforms
• Technology skills improve efficiency and reduce errors

Growth track record:

• Ask about client growth stories and how they supported expansion
• Request examples of handling increased complexity (multi-state taxes, inventory, payroll)
• Ensure they have capacity for your future needs

What accounting services will cost

Accountant fees vary based on your needs and location. There is no single price for accounting services.

Costs often depend on the complexity of your finances, the specific services you need, and your location. For example, a simple individual tax return might cost a few hundred dollars, while a more complex business return could be several thousand.

Monthly bookkeeping services can also range from a few hundred to over a thousand dollars, depending on your transaction volume and needs. It's best to get quotes from a few candidates and view the cost as an investment in your business's financial health.

Ask yourself if location matters

Location flexibility depends on your business needs and communication preferences. Cloud-based accounting software lets you work with accountants anywhere. Consider these factors:

Remote accountants work well when you:

• Prefer digital communication (email, video calls, cloud software)
• Want access to specialized industry expertise regardless of location
• Need cost-effective services from different geographic markets

Local accountants are better when you:

• Require face-to-face meetings and on-site visits
• Need someone who can attend business meetings with you
• Prefer building relationships through in-person interaction

Essential requirement: Regardless of location, your accountant must understand the tax laws and regulations that apply to your specific business and location.

Large firm vs solo practitioner

When choosing an accountant, you'll likely decide between a larger accounting firm and a solo practitioner. Each has its own advantages, and the right choice depends on your business's specific needs and preferences.

A larger firm often has a team of specialists, giving you access to a wide range of expertise. They usually have more resources and can handle complex, industry-specific issues. A solo practitioner can offer more personalized, one-on-one service. You’ll work directly with the same person, which can build a strong relationship. Their fees may also be more flexible.

Talk to government and business associations

Many governments and organizations offer support to help small businesses grow.

As a small business owner, take advantage of networks of business advisors available to help you make decisions like choosing the right accountant. You can also get advice from voluntary organizations and local chambers of commerce. Their advice is usually free.

These groups are also good for networking with other business owners. You may get recommendations for accountants. This can help you narrow down your list of candidates.

Tap into your social networks and online connections

Your existing network can be one of the best places to find a trusted accountant. Start by asking friends, family, or other business owners in your circle for recommendations. They can provide honest feedback based on their own experiences.

Professional networks like LinkedIn are also valuable resources. You can search for accountants in your area or industry and see their qualifications, experience, and client recommendations. Seeing how they present themselves online can give you a good sense of their professionalism and focus.

Decide how the accounting work will be divided

Accountants can handle every aspect of bookkeeping and small business accounting. In most cases, you can bundle up your bills and invoices, hand them all over, and they can do the rest. But this might not always be the best approach.

Accountants often charge by the hour, so it’s more cost-effective for you to handle simple data entry. Getting involved in your accounting helps you understand your expenses and revenue in real time and spot issues early.

For example, you can enter basic account data yourself, then give it to your accountant. They can handle more complex tasks like bank reconciliation, tax returns, payroll, and depreciation calculations.

Good accounting software makes it easy for you to manage your accounts. It simplifies tasks like invoicing and records details automatically. If your software is cloud-based, you can give your accountant secure access with one click.

Find out what software the accountant uses

Accountants often have preferred accounting software. They may have used the same brand for many years.

Using different software can make sharing data harder. Exporting and importing files can take time and may cause errors. It’s safer to use the same software or a secure, cloud-based system.

Try to find an accountant who uses the same software as you. If not, choose one who is willing to learn. Many accountants use more than one type of software, especially if it’s easy to learn.

Agree to use market-leading accounting software that is easy to use. Only exchange encrypted files. Collaborative, cloud-based software with built-in encryption is even better. This keeps your data safe and makes sharing easier.

Interview several candidates before you decide

Interview several candidates to help you make the best choice for your business.

Here’s a recommended process for interviewing accountants:

• Interview 3-5 candidates to get a good comparison range
• Schedule 30-45 minute consultations to assess expertise and communication style
• Prepare consistent questions to fairly evaluate each candidate
• Take notes on their responses and proposed solutions

Interview benefits:

• Free business advice: Each accountant may offer different perspectives on your financial situation
• Clearer requirements: Multiple conversations help you define exactly what services you need
• Better negotiation position: Understanding market rates and service options strengthens your position
• Cultural fit assessment: Determine who you can work with long-term as your business grows

Red flags to avoid when choosing an accountant

Look for an accountant who feels like a trusted partner.

Here are a few warning signs to look for:

• They are unresponsive. If they are slow to respond to your initial inquiries, it may be a sign of how they'll communicate once you're a client.
• Their pricing is unclear. An accountant should be transparent about their fees. Public companies are required by the SEC to disclose the fees paid for audit and other services, so you should avoid any professional who is vague or unwilling to provide a clear quote.
• They lack industry experience. If they haven't worked with businesses like yours, they may not understand your specific challenges.
• They promise unrealistic results. Be cautious of anyone who guarantees huge tax refunds or suggests legally questionable strategies.

Always negotiate fees

Accounting fees depend on your business size, complexity, and the services you need. Knowing common fee structures helps you negotiate better rates.

Common pricing models:

• Hourly rates: $150-$400+ per hour depending on credentials and location
• Monthly retainers: $300-$2,000+ for ongoing bookkeeping and advisory services
• Project-based fees: $500-$5,000+ for tax returns, depending on complexity
• Percentage of revenue: 1-3% of annual revenue for comprehensive services

Comparison strategy:

• Get written quotes from all candidates using identical service descriptions
• Consider growth scenarios: How will fees change as your business expands?
• Negotiate hybrid approaches: Combine hourly rates for complex work with fixed fees for routine tasks
• Ask about value-added services: What additional support is included in their fees?

Most small businesses spend 2 – 5% of revenue on accounting and tax services.

Do background checks

While it's important to talk to an accountant's clients, you should also verify their qualifications before you sign. The IRS maintains a public directory containing professionals with valid credentials, which can help you confirm their status.

There are professional services you can use to help you with this, but if the accountant is genuine, it's likely they'll be willing to give you a selection of contacts for references.

This helps you confirm their information and learn about their client relationships first-hand.

Get someone who's proactive about saving you money

Proactive accountants do more than basic compliance. They help you reduce your tax burden and improve your finances. Here’s how to spot them:

Questions to ask about tax savings:

• What percentage of operating expenses can I legally deduct?
• Which business expenses am I currently missing?
• How can I optimize my business structure for tax efficiency?
• What quarterly tax planning strategies do you recommend?

Red flags to avoid:

• Promises of unrealistic tax savings or "guaranteed" refunds
• Reluctance to explain tax strategies or provide documentation
• Suggestions that seem too aggressive or potentially illegal
• Lack of knowledge about recent tax law changes

Look for accountants who know the difference between tax avoidance (legal ways to minimize taxes) and tax evasion (illegal practices). The right accountant saves you money with legal deductions and planning, not risky schemes.

Learn to use and trust your intuition

You run your own company and have experience. You likely work well with people, which is key to business success.

Use your skills and trust your intuition. Intuition is your mind processing information unconsciously. It’s a powerful business tool.

When you meet an accountant, trust your intuition. Along with checking location, pricing, experience, and references, ask if you trust them with your business details. If you feel you can work with them long-term, that’s a good sign.

If you feel unsure, it’s okay to keep looking. Your intuition can help you notice things you might miss. Trust it when choosing your accountant.

Choose an accountant who will help your company grow

Choosing an accountant is a big decision. Your accountant will be closely involved in your business. You need someone you trust, with the right experience, who is available when you need them.

Good accountants help your business grow by managing complex financial work and giving practical advice. This can save you money now and in the future. The best accountants become trusted partners – choose wisely and you’ll set your business up for success.

FAQs on choosing an accountant

Here are some questions and answers to consider when choosing an accountant for your small business.

How much should I pay for an accountant?

Accountant fees vary based on your needs and location. Basic tax preparation for a small business can range from $1,000 – $5,000, while monthly bookkeeping services might cost a few hundred to over a thousand dollars. Get a few quotes to find a price that fits your budget.

What's the difference between a CPA, bookkeeper, and tax preparer?

A bookkeeper manages daily financial records. A tax preparer specializes in filing tax returns. A Certified Public Accountant (CPA) is a licensed professional who can offer a broader range of services, including strategic financial advice, auditing, and tax planning.

Should I hire a local accountant or can I work with someone remotely?

This comes down to personal preference. A local accountant allows for face-to-face meetings, which some business owners prefer. However, with cloud-based accounting software like Xero, you can work securely with a remote accountant from anywhere, giving you a wider pool of experts to choose from.

How often should I meet with my accountant?

How often you meet with your accountant depends on your business needs. Some businesses check in monthly or quarterly to review finances. Others only connect annually for tax planning. Set a schedule that works for both of you.

What should I do if I'm not satisfied with my accountant's service?

If you’re not happy, talk to your accountant about your concerns. If things don’t improve, look for a new accountant. Make sure you have copies of all your financial records before you switch.