Even managing personal finances & taxes becomes complex if you don’t have a financial background. Let alone managing finances for a company. A business’s focus should be on the core operations instead of writing & auditing books of accounts. It is where your accounting department comes into play. But many small or medium-sized businesses don’t afford it. So, they outsource their accounting operations to a CPA. This blog will tell you how to choose an accounting firm that fits best for your company.
Finding the appropriate financial guidance is often a challenging task. Several factors come into play here. The question is not “which accounting and financial services provider” to hire, as there’s no shortage of options. Instead, the question is, “how to choose an accounting firm” that works best for your company?
So, let’s get straight on that.
Top 5 tips on how to choose an accounting firm that fits perfectly for your accounting & financial needs
The following are the unavoidable factors for selecting an accounting and financial services firm.
1) consider the firms’ areas of specialization
Checking the areas of specialization of a financial consulting firm is crucial when looking for outsourcing accounting services. For example, if you need to hire an outsourced accounting and payroll service provider, the obvious choice would be to opt for a firm specializing in your industry.
The pandemic threw the entire world into significant financial disarray. It did not affect the giant corporations much. Small businesses and companies, however, suffered the most.
According to a Statista report, 32% of Americans revisited their financial plans during the pandemic but made no significant changes. At the same time, another 20% confirmed making substantial changes to their financial strategies due to Covid-19.
In unprecedented circumstances like Covid-19, a firm must take quick and decisive financial actions to survive the turmoil. Opting for a financial services firm that specializes in a specific area offers the following benefits:
- Advisory guidance for predicting and preventing future problems
- Providing better decision-making during emergencies utilizing the experience
- Taking swift and efficient measures when clients need changes in specific parts of their portfolio
2) define the exact requirements of a financial portfolio
Any organization or individual looking for financial guidance needs to understand & explain their exact needs.
Some essential things that you need to consider are:
- The size and location of your financial portfolio
- The actual scope and extent of services required
The most common mistake many organizations and individuals make is improper evaluation of their financial portfolios. Despite popular belief, the size and location of a financial portfolio matter. There is no efficient way for accounting or a financial services firm to evaluate client needs remotely.
Documents and emails can only go so far. For example, for an individual based out of California, it is advisable to hire a California tax accountant. Hiring local partners can be the best way to efficiently communicate all financial details and maintain a sense of transparency.
Additionally, correctly evaluating the size of a financial portfolio is crucial. A corporate portfolio will have massively different needs than an individual portfolio. Therefore, pinpointing the extent of needed services is the natural next step. For example, does the portfolio need minor financial consultation, or is there a need for comprehensive oversight? These questions help you to correctly explain your needs to the hired accounting & financial experts.
3) examine organizational compatibility
An accounting and financial services firm is the right choice only when compatible with a given organization or individual.
The right accounting firm will provide detailed and proper guidance to their client. In essence, communication channels between the two parties will have a simple, straightforward, and effective exchange of information.
A client needs to understand and get assurance on how a company will handle its finances as it involves dealing with his company’s private and crucial data. Similarly, a financial services firm must concisely communicate its access requirements & management needs and assure dealing with sophisticated data.
Clients need to build a rapport with their consulting financial services firm. It prevents any instances of mismanagement and communication errors down the line.
4) scrutinize the firm’s certifications and level of expertise
The accounting firm’s prowess is the most important thing to consider while looking for financial guidance along with relevant certifications & qualifications.
Getting caught up in ideas such as “brand image” or an external display of knowledge is incredibly easy. However, all organizations and individuals need to consider what’s at stake.
After all, it is about your personal or organizational finances on the table.
Thus, no organization or individual should ever hesitate to be selective in hiring an accounting or financial services firm. Examining the firm’s legitimacy and certifications is an integral part of the hiring process.
5) Technical orientation
Managing accounts with pen, paper, and calculator is an old story. And modern accounting practices are replacing old-fashioned methods rapidly. Most small or big firms are shifting to digitalizing accounting and financial practices. The obvious reason for this shift is that technology has made accounting smooth, saved valuable time for businesses, and prevented human errors.
So, when planning to outsource accounting and financial services to a firm, you must expect sophisticated tools and software packages from them. They must have experience with the latest techniques and should demonstrate sound knowledge to satisfy your apprehensions about the safety and use of your firm’s data. You should find another team if a firm fails to present its touch with the relevant technology.
Now that you know how to choose an accounting firm, imply these points as primary factors during the outsourcing process. The process of selection can, indeed, be a difficult one. However, it does not have to be intimidating.m
There are several verified and professional accounting firms available online. One such example would be the Stamos & Stamos CPA Firm.
Backed by an incredibly responsive and efficient team, we offer various accounting and payroll services for businesses from different industries. Contact us today to get comprehensive and systematic financial planning.