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Finding an accountant

It doesn't matter in what stage of life you are -- a 20-something recent college graduate, a senior vice president of a "Fortune 500" company or a self-employed small business owner -- sooner or later you will need someone to help you with your finances. You're going to need an accountant. When that day comes, make sure you've done your homework. Doing research ahead of time can save you emotional stress and money in the long run.

Choosing a financial mate
Think of choosing an accountant for your small business or personal finances as akin to choosing a mate. In this case, you are choosing a financial mate. You want someone who has your best interests at heart. Someone who is a good listener. Someone you can trust.

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Why? Because an accountant has to know virtually everything about you, your family (if you have children) and your business (if you have one or in the process of setting up one).

Hire a certified public accountant (CPA). Joyce L. Gioia, a certified management consultant with The Herman Group Inc., a management consulting firm in Greensboro, N.C., says it's best to get a certified public accountant (CPA) to handle your financial affairs because they are better trained and more experienced.

To be a CPA most states require students to complete five years of coursework at an accredited university and pass a national exam covering a variety of subjects such as income tax law, business law and theory.

"I would not hire an accountant who did not have a CPA," says Gioia. "Just like when you are looking for a good consultant, you should look for (an accountant) that's certified."

Know your own needs
Have an idea of what you need from your accountant. A CPA can help you sort through your taxes, steer you toward viable investments and stocks, and work with you on reducing debt. Oh, and it's never too late to start planning for your retirement.

Young adults should start planning for their retirement as soon as possible. The later you start planning and saving, the less money you will have when you eventually retire. If you wait until you're in your 40s, you'll wake up all of a sudden and realize you'll retire soon. You'll have missed 10 years to put money away.

Where to start searching
Asking your friends and colleagues who does their taxes may be the first step in finding an accountant. Many accountants contend that word of mouth is one of the best ways to get a lead. They are typically friends, family and business associates.

If you are new to an area and don't know anyone, go through the phone book and start your search there, says William Crosby, associate dean in the College of Business Administration at Jacksonville University in Jacksonville, Fla. Crosby says it's wise for people to always ask for a free consultation. If a firm is not willing to give one, move on to the next firm.

Asking for references is good, but be careful Crosby says. More than likely the firm will give you someone who is extremely pleased with the firm's work. But it's a good starting point.

Questions to ask
Try finding an accountant with a solid background and extensive experience in what you're looking for. Once you have found three to five accountants you are impressed with, set up an appointment with each one. Some questions to ask are:

  • How long have you been in business?
  • What services do you offer?
  • What is the size and type of the clientele?
  • What are the rates? Are they hourly or is there a flat rate?
  • Will they represent you if there's a dispute with the IRS?
  • When do they need your information in order to prepare your taxes in time?

"Once I've determined the level experience, I would like to know about his or her personnel. Will the CPA be doing the work, or will a bookkeeper be doing the work?" says Crosby.

Recommended qualifications
According to Cathy Hunter, an executive recruiter with Accounting Alliance, an accounting staffing agency in West Palm Beach, Fla., "You want to look for an accountant with a stable, solid employment history. People have patterns. You don't want an accountant who has moved from job to job. That tells you something about their character."

Hunter also suggests getting someone who is poised, confident and a good communicator. Remember your accountant needs to effectively communicate with CFOs (chief financial officers), boards of directors, bankers, attorneys and colleagues. Other recommended traits are strong organizational and analytical skills -- a "forward thinker."

An accountant's purpose
The goal of a good accountant or tax adviser is to help individuals and businesses accumulate and preserve wealth, says Ron Hanser, president of Hanser & Associates, a public relations firm for the accounting, tax and financial firm RSM McGladrey in West Des Moines, Iowa.

"RSM McGladrey's thinking is that when a new client approaches the firm for advice, we should be able to save the client enough money to more than cover the fee he or she will pay us," Hanser says. "Just as important, your tax firm should demonstrate that it is up to speed on tax law and can apply creative thinking in its work for you."

Crosby says check credentials and professional organizations the accountant may be a member of.

What it really comes down to is whether you are comfortable with the person. He or she can have all the credentials in the world, but if you are not comfortable with the person, then it's not going to work.

"I would want someone who has at least five years in the business because they know more and have seen and done things," says Jerry Eichenberger, a CPA and partner with RSM McGladrey in Houston. "Young adults should seek an accountant because a good accountant can save them money and make them money. I am a CPA, and happen to believe you get what you pay for."

-- Updated: Nov. 21, 2002

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See Also
10 key questions to ask prospective financial planners
10 tips for better money management
12 money-management tips for college students
Financial advice glossary
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