How to choose an accountant?

I should say up front that this was more than ten years ago. But I think the question is as relevant as ever, and anyone mulling it over today may find a useful thought or two here.

Of course, there were also people analyzing which vehicle to buy, what to manufacture, or where to locate a business. Those were interesting too, but what fascinated me most was how – and by what criteria – business owners went about choosing an accountant. Luckily, I got to sit in on a few of the presentations, and some of it has stayed with me.

1. The accountant’s age

For some reason, this came first in several presentations. Some preferred younger women. One business owner even made it a condition that the accountant absolutely had to be under 25.

The upside of a younger accountant, they argued, was being quicker to learn and more energetic. And more attractive. The downside was less experience. In the more serious presentations, “age” really meant years in the profession – how much knowledge and working experience the accountant had built up over time.

2. The accountant’s appearance

A few jokers had analyzed this in great detail too. Since most accountants in Estonia are women, the main question was whether an accountant’s clothing could, or should, be fashionable and eye-catching, and what the pros and cons of that were.

I remember the biggest laugh going to the presentation whose greatest drawback was that an accountant dressed too strikingly might keep the company’s managers from concentrating on their work. Several analyses cared more about first impressions, and about sensing whether someone would fit a particular working environment. The more extreme examples were an accountant dressed as a punk, and an accountant in very high heels on a factory floor.

3. The accountant’s skills

Here the business owners were at a loss, because they lacked the knowledge to judge accounting skills themselves. Being comfortable with a computer, having longer experience, not having changed jobs too often, and being able to give references all counted as clear pluses. Some still tried to be creative and listed “logic” as a plus. Presumably it is easier to write “check for logic” into an analysis than to actually test for it.

4. Communication skills

For many, communication skills were a very important criterion. Business owners had figured out that it isn’t enough for the taxes to be paid and the returns filed – you also need to be able to ask your accountant for advice, and the accountant needs to be able to explain the magic behind the numbers in the reports. Some presentations gave the impression that an accountant’s skill set should also include writing flawless letters in several languages, dealing with clients, HR work, and the other usual duties of a secretary, HR manager or executive assistant.

5. In-house accountant or accounting firm

For many, this wasn’t the most important question. Still, small business owners generally preferred an accounting firm, while the managers of larger companies felt an in-house accountant was the better fit. Both have their pros and cons. The drawback of a firm was that the accountant wasn’t right there every day, and that the business owner had to handle some tasks themselves.

The advantages of a firm were that you don’t need to be able to judge an accountant’s skills or their knowledge of accounting and tax yourself, and you don’t have to worry about whether the accountant is sick, on vacation, or decides to quit on the spot. The worry was finding a replacement, or how to hand the work over to another accountant.

It also mattered that a business owner could discuss things with an outside firm that they couldn’t, or wouldn’t, discuss with an accountant working under them. The accountant’s fee, and the overall cost of running the books, were decisive factors too.

…

There were other criteria as well, but these five stuck with me the most, and I had made a few notes about them. Some of the points in those presentations were surely only relevant at the time, but several of the grounds for evaluation are just as important and topical today.

I have had to choose accountants for hire many times myself – to judge their skills, their knowledge, their attitude to work, their willingness to communicate, and how they would fit into the team. It isn’t easy, because a first impression doesn’t always give you the right picture. But experience teaches you.

Personally, I compare an accountant’s profession to a chronicler’s. A chronicler has to record every fact correctly, and has to be able to judge how important and how accurate a piece of information is, whether it fits the context, and how it connects to other things across time and place. Just as both text and numbers matter to a chronicler, in accounting it matters that the numbers are recorded correctly and fairly, and that the narrative part complements the numbers and gives them context.

At times, though, an accountant’s work is more like a detective’s. When an accountant receives documents, information and data to process into a report, they have to be able to judge what kind of transaction this is, whether a piece of information or a document is missing, and whether the data is incomplete or improperly drawn up. They have to make the connections that turn a transaction, or a series of them, into the bigger picture. They have to understand exactly what happened, so they know how to record it in the books and, where necessary, tax it correctly and on time.

An exceptionally good accountant, however, is one who can also see a little way ahead. Who can offer different approaches and solutions, and explain how and why each one affects the company’s results and its financial reporting.

So, if you happen to be choosing or changing your accountant or accounting firm right now – I hope you found a thought or two here! And perhaps a little accounting humor as well. Accounting is nowhere near as dry a profession as people imagine.

Photo: Karolina Grabowska