Q & A: What questions should I ask my accountant before I start my business?

Choosing an accountant/CPA is probably one of the most important decisions to get right, because you are unlikely to have an accountant’s grasp of

• taxation
• company law
• dealing with the tax authorities
• wide range of knowledge about small business.

You need to make sure you find an accountant/CPA who concentrates on small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants before you make any appointments.

Another aspect is size, make sure you are not “one among millions” sort of speak, smaller accountants practices are often more in tune with your small business needs, because they are a small business too.

Here are some questions I would be asking when starting out with a new business venture:

• Should I start my business as a sole-trader, partnership or limited liability company?
• Can you help me to find and raise finance? (Read about bootstrapping first!)
• Will you help me with setting up my cash-flow forecast?
• When do I need to register for VAT (UK), GST (Australia) or when do I need to charge sales tax (US)?
• Am I ready to start trading, or should I wait?
• Do I need to choose my financial year and trading year end date?
• Are you going to do my bookkeeping and accounting work?
• Will you work online with me, so we both can be up-to-date with my business progress?
• Will you deal with my employment issues, pensions, annuities and insurances for me?
• Will you help me to understand more and more of these issues myself, and will you be available for advice if and when I need it?

There are many more issues to consider and they depend on your business, that is where your accountant will help you too. If you find the accountant is dealing with other businesses like yours you are in good hands, they can give you better and more realistic planning guidelines about your business venture.

The most important question is the one you need to ask yourself, “do I trust this person and can I work with him/her long term?” If you feel intimidated, or misunderstood, get up and walk. An accountant should be your advisor, he/she should never be your boss, what I mean is you need to make the final decisions, not your accountant. No matter what advice you get anywhere, you are always responsible.

Most of all your accountant should be a trusted advisor, trust me you will need his/her advice on a regular basis! ST.

Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below – I’d be most grateful.

14 Responses to “ Q & A: What questions should I ask my accountant before I start my business? ”

1. Jason Holden
   
   Said on November 1st, 2007 at 5:52 pm

   Stefan, I like this. You have hit the nail on the head here; clients need to start asking questions of prospective accountants.

   However, I will be honest (as always), some of the questions you say they should ask worry me, as I would be a lot happier if I thought a lot of these are the questions the accountant will answer without being asked.

   When we meet or speak (with those who are not local) to prospective clients I admit we actually interview them, mainly to see if they are a fit with us, our way of working and our existing clients.

   I know this has resulted in some people getting the wrong impression, yes I am fussy who we take on, but for the reasons that I only want to accept clients that we can work well with and help, that is the least we owe them, and after 20 years in the business I know what to look for, but I don’t always get it right, and for that reason I don’t expect a client to be able to assess if I am right for them, how would they know?

2. Stefan Töpfer
   
   Said on November 1st, 2007 at 6:49 pm

   Jason, they can only have an educated guess – the questions I posted will give them an idea how flexible and passionate you are about small business.

   I make mistake, you make mistakes …. but passion is what we need to overcome our obstacles. Show your prospective client, that you care about their business and not about the monthly cheque. That will be a good start I guess.

   Stefan

3. Starting in business | Holden Associates Blog
   
   Said on November 1st, 2007 at 7:22 pm

   [...] you have decided to work for yourself, but after reading Stefan’s blog today it is apparent that a lot of you are not getting the support and advice you need and this is [...]

4. What should I ask an accountant? | Holden Associates Blog
   
   Said on November 7th, 2007 at 5:23 pm

   [...] Stefan made a posting ‘what questions should I ask my accountant’, this prompted me to make a [...]

5. Making strategy work for you : AccMan
   
   Said on November 11th, 2007 at 12:49 pm

   [...] entirely different take, check Jason Holden’s article on firm selection which is an add-on to Stefan Topfer’s piece in similar [...]

6. I disagree, and here’s why | Holden Associates Blog
   
   Said on November 12th, 2007 at 12:49 pm

   [...] an entirely different take’, I think Dennis has not understood either my posting or that of Stefan, which is a shame, all our postings were intended to do was give the ‘man in the street’ an [...]

7. Tom
   
   Said on January 19th, 2008 at 10:05 pm

   I make scented candles and have about 200 that I can’t sell because they are beginning to deteriorate. Fading in color, loss of color, metal containers beginning to rust. Can I write them off as a loss of some sort?

8. Tom
   
   Said on January 19th, 2008 at 10:08 pm

   Can I write off products which I can’t sell due to deterioration. I make and sometime buy scented candles for resale. I have over 200 which I can’t sell due the appearance. Dye fading, metal containers beginning to rust, wax shrinking or cracking. Can these be written off?

9. Discount Soy Candles
   
   Said on July 7th, 2008 at 1:37 pm

   Very interesting points. May I ask a question? Is it a must to get into business school before attempting to build a business?

10. steve houde
    
    Said on July 21st, 2008 at 7:36 pm

    i am opening a roadside live lobster and seafood stand selling fresh fish, clams etc.. out of a refrigerated truck in the town next to where i live. i will not have to pay any rent for the space so no overhead there. i got a used truck for $5000 which a relative bought for me as a gift so no payback there either. my cost is for gas and product now only! the location is a very busy traveled road and is in the same lot as a ice and propane store and just next door to a target department store and major supermarket which does not carry fresh fish just packaged!
    I am in Massachusetts about twenty minutes from the coast and there are several retail shops within a few miles with big overhead so thus higher prices than i will be! People love their fresh live lobsters and seafood up this way!
    i also thought about trying to market to seafood markets in pennsylvania or upstate newyork and do the 7-10 hour drive in my truck twice a week trying to sell wholesale. i buy direct from maine lobster boats so i have no middleman or cost inbetween and can sell at or less then the biggest of companies. what do you think of all this?

11. Investing In Annuities
    
    Said on August 26th, 2008 at 2:33 am

    I might add trying a business venture without one is not wise, I tried it that way once

12. Jen
    
    Said on November 21st, 2008 at 5:25 pm

    “The most important question is the one you need to ask yourself, “do I trust this person and can I work with him/her long term?” If you feel intimidated, or misunderstood, get up and walk. An accountant should be your advisor, he/she should never be your boss, what I mean is you need to make the final decisions, not your accountant. No matter what advice you get anywhere, you are always responsible.”

    I think this is probably true with any person you hire, whether it’s someone outside your company or someone you’re going to work with directly everyday. While having specific qualifications and being able to get the job done are important, it’s also equally as important that you feel comfortable around the people you work with.

13. Leaflet Distribution
    
    Said on December 26th, 2008 at 9:50 am

    Years ago we knew about an accountant, whilst he appeared to be very good, seemed to be very much in control of HMRC issues and very effective, he may well have been a little too clever at times. I would suggest now that you find one who is straight down the line, plays by the book, that way you will not be in for nasty suprises at a latter date.

14. Shaun Lawrence
    
    Said on November 11th, 2009 at 2:25 am

    Those are good examples of questions. I am a CPA in Newport and I would say most of those questions are not going to take much time for a CPA to deal with and be very valuable for the client. Clients need to ask questions. Good article.

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