Comprehensive guide on how to hire a business accountant that fits your budget

“You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language.” Warren Buffett

Every business needs an accountant. They are your financial partner for life. With an in-depth knowledge of finances, they will help you with everything from upscaling your office to assisting you to fund your son’s tuition fees. Yes, an accountant does it all without losing their BALANCE.

As much as it is important to understand accounting, knowing how to hire the right accountant for your business is of greater importance, a quest with a unique set of challenges. First, there’s an acute talent shortage. Even if you manage to attract candidates, you must ensure they possess the right skills in your niche and technical skillset. But, how? Let’s find out.

What is business accounting and what does an accountant do?

Accounting is the language of business. It delivers valuable financial information to founders, managers, creditors, investors, employees, and the government and helps everyone involved make informed decisions. Here’s a brief on 4 main financial statements,

1. Balance sheets: Shows what your company owns and owes at a fixed point
2. Income statements: Records how much money you made over a period and associated expenses
3. Statement of shareholders’ equity: Shows changes in the interest of your shareholder’s over time
4. Cash flow statements: Reveals financial transactions between the company and the world outside

These reports help you oversee the financial health of your business over time or a specific period. And predict the future financial situation also.

A Business Accountant is a person who issues financial statements by keeping track of your business transactions and reporting company performance. Their services vary from day-to-day bookkeeping, tax analysis and preparation of taxes to financial planning.

Did you know J. P. Morgan started his career as a business accountant on Wall Street? His initial days as an accountant helped him turn his father’s small-time banking company into JPMorgan Chase & Co., the most dynamic and powerful banking house worldwide. Rest is history.

Who is a CPA?

On the search for accountants, you will come across CPAs (Certified Public Accountants) holding accounting degrees synonymous with accountants. The state certification that CPAs hold is what makes them exceptional. They undergo rigorous 150-hour extensive education and a four-part standardized test to earn the title and annual courses to retain it.

Why should you hire an accountant? – benefits of hiring one for your business

Regardless of the size of your business, you must hire a business accountant to have precise knowledge of your financial situation. Also, they save you from the risk of reporting inaccurate information to investors or worse, tax officials.

Here are some reasons why you should hire them.

1. There are state rules, there are federal rules, and there’s local tax authority. They all have different rules that are complicated and confusing enough for companies/individuals to do their own taxes, let alone avail of all deductions. So, it all comes down to your accountant. They keep up with the constantly changing tax codes while eliminating tax worries and preventing expensive mistakes.

2. With a clear picture of your company’s financial standing, they help you make crucial financial and non-financial decisions that include investments, sales and procurements.

3. As your business grows, so do your budget and financial needs. An accountant eliminates cash flow mismanagement and supports your growth by ensuring your finances are in place for successful expansion while ensuring profitability. 

4. They save the time you put into finance by attending to daily bookkeeping and accounts, thus freeing you to concentrate on other business areas. Not to mention the errors and related losses you could incur owing to poor decisions.

5. A clear picture of your finances keeps your current investors happy and attracts new investors.

Business accountant skills and job responsibilities

In 2004, when Blockbuster was at the top of its game, it employed over 84,300 employees and rented 9,094 shops worldwide. Six years later, Blockbuster filed for bankruptcy protection. The company faced challenging losses and $900 million in debt owing to poor accounting and industry changes. And competition from a small company called Netflix back then. I know, right.

Behind every failed business, there’s a lousy accountant who makes big promises before seeing your financial statement.

In addition to recordkeeping, financial advising, tax responsibilities, employee payroll and managing bills, here are the skills you must assess a business accountant for.

1. Excellent communication skills to convert complex jargon into easy-to-digest language.
2. Expertise in the latest technology / software to gain deeper insights into financials.
3. Strong data analysis skills to analyze data and spot issues.
4. A better understanding of your niche and business needs.
5. Attention to detail and a quick eye for inconsistencies.

If they have a loophole named after them, all the better. Just kidding.

Quick note: The best business accountants have a master’s degree while specializing as a financial specialist, certified internal auditor, or certified management accountant (CMA).

Business accountant salary insights

In the United States, an accountant earns an average of $59,736. The minimum entry-level salary is $40,000, and the maximum is $86,000, reports Indeed. 

And according to Glassdoor, their average base pay is $63,000, based on 35,500+ anonymous salary submissions. 

However, the salary range may vary depending on the candidate’s experience, technical skills, software expertise and job location.

Should you hire in-house or outsource accountants?

An in-house accountant is trustworthy. They are always within hearing distance to attend to your queries on statements and help you control your finances better. They fit in your company well, have an exceptional understanding of the processes you follow and will multi-task if need be.

But, if your business doesn’t operate on typical business hours, hiring a full-time accountant is not the best idea. In the case of after-hours work, they might leave you hanging.

An outsourced accountant would be your savior here and is available at a fraction of the former’s cost. Plus, they possess exceptional CPA skills and up-to-date knowledge that makes them stand above the competition and deliver high-quality work.

Accounting software assists bookkeepers and accountants by offering basic to advanced features, including automation of repetitive manual processes. Ensure your accountant hire has hands-on Zoho Books, FreshBooks, Intuit QuickBooks, Sage or other top accounting software

How to hire a business accountant?

Once you have decided on the educational qualification, skills, job responsibilities, salary range and whether to outsource or hire in-house, comes the tedious process of searching for quality talent. Let’s go through the possible methods.

1. Ask for referrals

An employee referral program encourages your employees or first-level connections to recommend suitable candidates. To up the game, you can announce incentives like salary bonuses or other perks, making the program competitive. However, ensure to clearly define your expectations of the candidate so that you and your circle won’t waste time.

If you are looking for CPA expertise, you can check your state’s CPA society for vetted professionals.

2. Post your job online 

Leverage social media channels like LinkedIn, Twitter or Facebook to source candidates organically or employ paid ads to target a specific audience. You can even go after job boards. Promote your company with social proof. Video testimonials from your employees describing the work culture and environment are terrific to attract quality talent.

Beware of making any mistakes in the hiring process. The accountant you hire gets exclusive access to your business records and proprietary & confidential information. Thus, it’s crucial to test them for their authenticity.

3. Pre-screen to evaluate applicants

With all the applicants, the first ideal step would be pre-screening and assessment.

There are certified public accountants (CPAs) who have a strong understanding of generally accepted accounting principles (GAAP). Then, there are self-taught accountants who became so by being friends with a CEO, which isn’t always negative. To ensure you end up with the best talent, pre-screening is essential.

But can you do it unbiased and accurately? Yes. Enter Testlify.

4. Assess Their Skills Using Testlify, the finest talent assessment platform

By removing unconscious bias from the screening process and enabling you to find talent from underrepresented backgrounds, Testlify conducts a thorough assessment of a business accountant. The tool tests candidates for on-the-job skills rather than relying on trick questions. You can browse from the vast test library or create a role-specific assessment to test them.

Think of 5 crucial skills your accountant must possess and create an assessment with relevant tests. Testlify offers skill tests like Accounts Payable, Financial Accounting, Accounting Assistant, Accounting Manager and a couple more to assess your candidates’ understanding. Check out the brief.

Accounts receivable test

Account receivable refers to the pending payment from customers for the goods purchased on credit. And the Receivable: Sales ratio reveals how efficient your company is in the collection process. The Accounts Receivable Test checks the candidate’s basic accounting knowledge, ratio computation and reconciliation.

Accounts payable test

Unlike Accounts Receivable, Accounts Payable is a business liability, the money your company owes to suppliers/vendors for purchasing goods or services on credit. A decrease in Accounts Payable indicates faster payments. You can check your candidate’s related skills for free here.

Financial accounting

You can check your applicants’ knowledge of basic accounting regulations, their ability to read, analyze & generate financial statements, and how sound they are at financial forecasting and calculating ROI with this test. 

Accounting manager

This 10-minute, medium-difficulty test featuring 12 questions helps you assess your candidates’ accounts, taxation, auditing and business management skills. Get a detailed analysis of their overall management and reporting ability for free. 

Accounting (advanced) test

This Advanced Accounting test is all you need to evaluate the applicants’ knowledge of accounting principles and their ability to find missing information. Add the test to your assessment and make informed recruiting decisions.

Accounting assistant 

An accounting assistant assists the accounting department with analytical thinking, organizational abilities, fact-checking and excellent 10-key skills.  Check this Accounting Assistant Test for the additional skills measured and related roles.

Don’t forget soft skills.

Testlify is candidate-friendly. It means the tests take just 30 minutes to complete, making more than 80% of applicants finish them. Once done, you can evaluate them based on their areas of strength and weakness via a detailed analysis of the results. And use them to compare with others.

P.S. You can access Testlify’s API via Zapier and integrate with 100+ ATS, including BambooHR, Boon, 100Hires, 8xpand and more.

5. Schedule an interview for the cream of the crop

Once you have shortlisted a handful for the face-to-face interview, prepare a set of personal, team-based and job-specific questions and get to know them. Here are a couple of important job-specific ones

1. Our financial goals for the year are (mention a goal or 2). How will you help us meet them?
2. What accounting software do you use, and why do you prefer it?
3. Have you worked with a business with the same niche as ours?
4. Do you see technology/AI impacting your profession in future?
5. How do you stay up-to-date with financial laws and news?
6. How familiar are you with automated accounting?

All accountants seem friendly and knowledgeable while you interview them. But knowing the signs of a bad one will save you from negative press coverage or lost funds.

3 Warning signs of a bad accountant

1. They suggest dishonest practices to qualify for a loan, evade tax or defraud investors. For instance, the Bernie Madoff Ponzi Scheme. 

Bernie Madoff, a successful American businessman, ran an investment fraud, the Ponzi scheme. It was the largest financial fraud in the history of the US. The scheme paid existing investors from new investors’ funds rather than the company’s profit, swindling over billions of dollars from 37,000+ investors. It resulted in Madoff’s arrest on December 11, 2008. He and his accountants were sent to prison.

2. They aren’t discreet. If they are willing to sell out their existing clients to demonstrate their experience, it won’t take long for them to expose yours too.

3. They often miss deadlines, aren’t up-to-date, do not involve themselves in continuous professional development or make careless mistakes.

With that said, run a background check and cross-verify with references before you hire someone new who can access your confidential information.

Final thoughts

Hiring a business accountant will free up your time and give you peace of mind by tracking your finances around the clock. But hiring one isn’t as easy as finding a freelancer online. With a client-centric approach, Testlify strives to shortlist the best candidates through unbiased, automated and accurate skill assessment tests, so you will end up with a business accountant that’s best for your business. Visit Testlify now.