Hiring an accounting firm can prove to be a critical factor in the success of your business. The role of accounting continues to adapt from the traditional role of bookkeeping to providing business analysis and guidance for owners to take well-informed decisions for the prosperity of their businesses.
Accounting has been affected by the introduction of new technologies in the corporate sector.
Further, accounting firms have been actively adapting to the changing industry trends and needs.
Every industry has its specific needs that require a tailored approach to the accounting solutions that can be provided to each. Therefore, the CEO has to scrutinize the depth of the professional expertise of the service provider, since not every accounting firm can provide the entire range of solutions for every industry.
In the prevailing employment scenario, it is becoming difficult to find industry-fit candidates even for the beginner-level roles. According to research conducted by Hayes, S, Freudenberg, B, & Delaney, D. (2022), titled “Work ready graduates for Australian small and medium Accounting firms,“ “a work ready graduate for an SME firm has a working knowledge and understanding of business accounting software programs, taxation and tax software.“
Following are five questions to ask accounting firms before hiring them.
1. Are You Familiar with Accounting Software?
Today, quite a lot of accounting processes have been automated using software. Before hiring an accounting firm, it is important to ensure that they are familiar with the software in use by the company.
Several accounting programs include MYOB, Xero and QuickBooks. The service provider must be technically sound enough to understand the software in use by the company and what its data security and integrity requirements are.
For example, a firm struggling financially may possibly not have financial statements in a finalized form, and the outsourced accounting firm should be competent enough to go through all the records and have the financials prepared according to the applicable corporate and tax laws.
Moreover, accounting software being used should allow quick and efficientdata processing and transmission.
Accounting information system (AIS) is of great importance to businesses and organization. It provides valuable assistance in facilitating management decision making, internal controls, quality of the financial report, and facilitating the company’s transaction.
A study states, conducted by Wickramasinghe, Mihiri and RMMD, Pemarathna and Cooray, N. H. K. and Dissanayake, Sulochana, titled “Impact of Accounting Software for Business Performance (2017),“ “there is strong relationship between accounting software system and business performance, which means access to accounting information, will lead to organizational effectiveness.”
2. What Services Do You Offer?
The lack of internal accounting expertise compels companies to go for third-party service providers (accounting firms in this case), but, not all outsourced accounting firms provide an all-in-one package.
Before signing the contract, it is important that companies ensure that they are paying for the services they want rather than paying for the services the accounting firm offers.
Further, it needs to be ensured that the accounting firm offers all the services your company requires so that you do not have to perform several accounting tasks yourself while having hired an accounting firm.
Several empirical studies have shown that SMEs owners have relied on professional accountants as source of consultancy. Their expertise needs to be studied. They should be competent enough as their advice will directly have an impact on the performance of your company.
Prioritize quality over quantity. If an accounting firm offers more services at lesser price, owners must ensure that they are reliable and authentic.
Research in social psychology suggests that during social greetings, individuals develop perceptions of strangers instantaneously and effortlessly. Consider a firm that is genuinely confident on its services rather than one that pushes companies in buying all its services.
Companies must research about potential accounting firms and their competitors so that they are better informed before taking a decision.
3. Do You Have Experience in Our Industry?
Accounting is a technical field that requires extensive work experience. Each industry has its own culture. A 30-minute interview will not entirely suffice in recognizing if the outsourced accounting firm is well suited for your company.
Meet the firms in Trade Shows events, where hundreds of professionals from dozens of accounting firms showcase their firms and interact with owners, and ask accounting questions.
Companies should utilize this opportunity to learn more about the firms they may be hiring. Furthermore, it also acts as a bridge between like-minded business leaders. Spend 5-7 minutes with professionals in your desired service line.
Try to know what makes a firm stand out among their competitors.
4. What Are Your Fees?
Companies should have a clear idea of how much they can afford while hiring an accounting firm. It is important that owners understand the pricing structures of the accounting firm before hiring it.
Owners, for valuable insight from an accounting and business perspective, can schedule a free consultation with Haroon Jafree (CPA) – CEO of Expertise Accelerated, which is an outsourcing and staff augmentation specialist.
As the total cost for hiring an accounting outsourcing firm is far less compared to hiring an in-house staff, evaluate the cost differences between hiring a personal accountant or an outsourced accounting firm.
One of the priorities while hiring an accounting firm is to maximize profits and reduce costs.
5. How Can You Improve Our Financial Matters?
Focus on hiring firms that can improve your company’s financial matters rather than just handling it. Keep in mind, you are hiring a team of experts — if you wanted to just do it as a daily task, you could have handed it over to your internal team.
EA’s general accounting service provides quality-assured, cost-effective solutions to help you gain competitive foothold.
Accounting has occupied a vital role in operating an organization. It also has various processes; some simple, others complex and burdensome. Every business must keep track of financial information that relates to its business activities.
However, as the demand and supply grow, companies have to maintain their accounting numbers at a higher pace. Rushing a process makes it prone to errors so hiring an accounting firm minimizes the risk of errors that lead to larger complexities.
Therefore, the growing trend of outsourcing basic core accounting services continues.
According to Labour Market Research, “81% of degree-qualified accounting applicants were deemed unsuitable for the vacancy, with employers commonly citing lack of experience as a decisive factor.“
Hiring an accounting firm saves companies the trouble of going through the recruiting and training processes. Furthermore, businesses get access to a team of expert accountants that helps them in reducing costs and maximizing profits.