A Guide To Finding An Accounting Consultant For Your Small Business

Jan 1, 2018

As an entrepreneur, you know only too well that money is the lifeblood of any business entity. Without enough cash, you won’t be able to bring additional staff on board, invest in research and development, improve your product, or even market the business.

And did you know one of the top reasons businesses fail is inexperienced management? The owner wants to wear many hats, from product development to accounting.

Some roles are better left to professionals. If you don’t have accounting expertise, for instance, it makes perfect sense to hire an accounting consultant.

In this article, we will briefly dive into how an accounting consultant can help your business, and provide tips to help you find the right professional for your business.

The Role of an Accounting Consultant

In most instances, accounting consultants are rarely in-house employees. They typically work for established consulting firms, so you contract them for a certain period of time.

Now let’s get into what they can do for your business.

Developing Organizational Accounting Policies

Every established organization has policies that dictate how various accounting tasks are executed. For instance, who is responsible for authorizing payments to suppliers? Who takes responsibility for an accounting mistake? For how long should financial records be kept?

However, if you’re a starting business, or haven’t been in the game for a while, you may not have accounting policies in place. And if you do, they might not be very effective.

An accounting consultant will step in, evaluate your accounting functions, and develop policies to streamline those functions.

Financial Forecasting

Ever watch the TV show “Dragon’s Den”?

If you have then you’re probably familiar with this question: how much money do you expect to earn this year?

Without any finance or accounting experience, it’s virtually impossible to give a near-accurate estimate of how much your business will pull in within a certain period.

This is where an accounting consultant comes in.

He or she will analyze your sales records, cash flow, and other financial records, and make financial projections for your business.

Such projections are not only useful when pitching your business to investors, but will also help you know when you’ll break even.

Identifying the Accounting Services You Need

As your business grows, you’ll realize that the bookkeeper you started out with is no longer capable of handling the increasing accounting tasks.

So you do what many other entrepreneurs would do, which is to hire an additional bookkeeper. But is it the right move?

In many cases, an accounting consultant is often the right professional to hire. They will assess your accounting needs and recommend services you should be using to get the most out of your accounting functions at the lowest cost. For instance, the consultant can recommend that you invest in an accounting software to automate certain functions instead of hiring an additional bookkeeper.

Keeps Your Business Tax Compliant

As an operator of a business in Canada, you have tax responsibilities.

However, trying to understand the tax code so you can file taxes on your own can prove challenging. Moreover, you’ll waste time that you should otherwise be investing in your business.

Accounting consultants will take the guesswork out of your tax responsibilities. They will guide you to correctly report your business income depending on the structure of the business, as well as help you claim qualifying deductions.

Ultimately, a consultant will help keep your business tax compliant. This will prevent unnecessary audits and even regulatory fines.

Helps You Make Hiring Decisions

Your business can’t rely on the expertise of an accounting consultant forever. At some point, you’ll need to hire your own competent accountants.

Before you let go of your accounting consultant, though, let them help you to hire the right accounting personnel. The consultant will develop job descriptions for the various accounting positions you want to fill, and determine the qualification the holders of these positions must have.

The consultant will also help you conduct the interviews and select the best applicants.

Finding the Right Consultant for Your Business

Evidently, having an accounting consultant on your team is a wise move. Yes, their services can be pricey, but they will help your business improve its bottom line.

But how do you pick the right consultant from the many that are in the market?

Know What You Want the Consultant to Do

Many business owners make the mistake of hiring an accounting consultant with having a good handle on what they want them to do.

Do you want a consultant to help you will all matters related to accounting? Or you just need tax advice?

Going into the hiring process with a clear view of what you need will enable you to hire a consultant who is the right fit for your company. On the other hand, lacking a good idea of what your business needs will lead you to hire someone who might lack the necessary expertise required to tackle the specific issue you need to be addressed.

Qualification and Experience

In any industry, a consultant is an expert. This is someone who has earned the relevant academic and professional qualifications, and gained vast industry experience.

As such, you must check the academic qualifications and experience of a potential accounting consultant.

Beyond the degrees, look at the professional qualifications. Some certifications to look out for include:

  • Chartered Accountant
  • Certified General Accountant
  • Certified Management Accountant
  • Chartered Professional Accountant

(Please note: These certifications are now all combined into the Chartered Professional Accountant designation)

When it comes to experience, be careful not to fall for a consultant who has been working as an “accountant” for a certain number of years. Look at the number of years they have practiced “consulting”.

Consider Reputation

It’s easy to fall for an accountant consultant with the right qualifications and vast experience without considering their reputation.

After all, as long they are able to do the work, why should you care about their reputation?

Well, reputation is an important virtue. A consultant may be more than qualified academically, but what if they overcharge you for their services? What if they are not honest and can easily manipulate your business numbers to make everything look good?

This is why it’s important to evaluate the professional reputation of a consultant. Ask the potential candidate to refer you to some of his previous or current clients.

Reputable consultants will have no problem referring you to some of their clients. They want their work to speak for itself!

Know Where to Find One

In this digital age, the internet has become our go-to source for everything, and for good reason. Many businesses now advertise their products and services online, and it’s highly convenient and cost-effective to use the internet.

But is the internet the best place to find an accounting consultant? It is, as long as you know where to look.

Professional accounting associations in Canada are a good place to start.

These associations typically have online directories where you can view members and their qualifications and experience.

Besides the internet, it pays to attend events organized by these associations. You’ll have the opportunity to network with accountants, improving your chances of being referred to the best accounting consultants.

Another option is to seek recommendations from other business owners. If they’ve previously worked with a competent consultant, they may recommend them.

Now Go Find the Best Accounting Consultant

With the information in this article, we’re confident you’re ready to go out, vet various consultants and settle on the best.

Remember, it’s still possible to hire a consultant who may tick all the boxes, but just not be the right fit for your business. It’s important to keep tabs on their performance and assess whether they are doing what you need them do.

If you feel something is not adding up, don’t be afraid to pull the plug and hire someone else.



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