What to look for in a Bookkeeper or Tax Pro | Incite Tax

How do you choose the right bookkeeper or tax professional? This is the question I will answer as I review a list of commonly suggested criteria for selecting a bookkeeper or tax pro. While these lists are easy to find through internet searches or coaching programs, they often miss the mark because they lack insights from real-world accounting experience. As someone who has owned a firm for 15 years and employs over 200 people, I understand the importance of choosing the right professional. Many of these lists were likely created with good intentions, but they, they often don't come from individuals who truly understand the intricacies of bookkeeping and tax services. I'm going to walk you through these points, explaining why some of the advice may not be practical while highlighting what you really need to consider based on my extensive experience in the industry. Let's dive into the list and separate the valuable advice from the impractical suggestions. Oh, right. There's that. It's important we never forget the IRS sucks. If you were on fire, they wouldn't even use their glass of water to put you out. Instead, they'd just toast marshmallows and make s'mores. Let's actually look at the list now. First one on our list is reviews and references. These lists say that the bookkeeper or tax professional you use should have lots of positive reviews and be able to provide you with references. I'll start by recognizing that reviews and references are 2 distinct things and need to be addressed separately. So reviews— While reviews can provide valuable insights, consider your own experiences. How often do you leave reviews for good experiences compared to bad ones? Human nature tends to make us more inclined to share negative experiences. This is because when we purchase a product or service, we naturally expect it to be a positive experience. So when things go well, it's easy to think, that's how it should be. On the other hand, a bad experience stands out because it clashes with our expectations. And negative experiences cause stronger emotions, which drive us to take action, often in the form of a negative review. We all have a psychological need to vent frustration and seek validation. Positive experiences, while pleasant, don't trigger that same urgency to share. For example, my firm has filed tens of thousands of returns over the years. Yet we have about 500 reviews, and that's even with a process in place to ask clients for reviews. When I think of negative reviews, I often think about the Better Business Bureau as an example. Many people think of it as a trustworthy source for reviews. However, the BBB, founded in 1912 by a marketing agency, is not a government body. But because of the word bureau, it gives us a false sense of reality that it's a credible organization. Well, it isn't. It's often criticized for its pay-to-play model, where businesses can pay for better ratings. Despite its claim to advance marketplace trust, it has been involved in multiple legal battles over this issue. They've, they've even been known to use marketing companies to sell their scam. The same marketing companies of which had the worst possible BBB rating. This business model very much reflects what you and I would call blackmail. I wouldn't even bother looking at the BBB ratings personally. They are not a good resource for us to determine the quality of a bookkeeper or tax professional. Google Reviews, on the other hand, might be a more reliable source for assessing accountants. For one, they're free for both businesses and clients to use, so we don't have a pay-to-play conflict of interest, which is found like in the platforms like BBB. Another helpful way you can use Google Reviews is to pay attention to how businesses respond to negative reviews. No business can avoid an irrational client, so it's crucial to see how they handle the response to those bad reviews. A thoughtful response to the negative review can indicate professionalism and a commitment to customer satisfaction. Now, let's talk about references. This will be short. In most cases, accountants can't disclose their clients due to confidentiality. To do that, they have to get the client's permission, which can and has been done, but you have to realize they'll likely only refer you to satisfied clients. It's like looking at someone's social media posts with only their highlights. It's not an accurate or complete picture. That's why I don't recommend wasting time on references to make your decision. In summary, while reviews from the BBB and other pay-to-play platforms are unreliable, you could glean some insight from review platforms like Google, but this should be looked at as a small piece of the puzzle you're trying to put together because a low number of positive reviews doesn't necessarily mean anything About the accountant. And with references, don't waste your time. Let's move on to the next point. The tax pro or bookkeeper you hire needs to have excellent communication skills. This is true. Now, how do you evaluate their communication skills? You want to assess their timeliness of responses and quality of responses. If they're slow to respond before you're a client, That's a sign they will be likely slow to respond when you are a client. But if they are prompt to respond before you're a client, that doesn't necessarily mean they're going to be prompt once you become a client. When I was earning my master's degree in tax, I heard this story. A man arrives to the gates of heaven. St. Peter tells him he can come in, but he wants the man to be happy and comfortable. with his afterlife, so he will get a chance to see what hell is like before he makes a decision. After descending in the elevator, the devil greets him with a smile and a cup of hot chocolate. People are dancing, the music is fun, looks like there's a casino, an all-you-can-eat buffet, rooms full of comfy couches and huge TVs. The man goes back to Saint Peter and says he thinks hell is the place for him. When he returns and the elevator doors open up to hell, the scene is now quite different. Everyone is chained to each other and they're walking in a continuous circle under the, of course, blazing fire and brimstone. The man asks Satan, what happened to the party and the food and the TVs? Satan responds, oh, that? That was recruiting. So while we want the accountants to respond promptly, unfortunately, We can't give them credit for doing that during the sales stage. The other element we want to address is quality communication. For me, that refers to how easy is it for me to understand what they're saying. For example, we once needed to hire an HR attorney, so we paid one for a short consult on a very specific question to try them out. The response we received was very lengthy, and I'm sure the HR attorney felt like they were very thorough and detailed, but lengthy, thorough, and detailed doesn't always mean easy to understand. As non-attorneys, we found the answer confusing. When we asked for clarification, the response was equally perplexing. Is the way in which the accountant is communicating with you easy to understand? And one last thing on easy-to-understand communication. It'd be silly for us to assume there won't be any type of miscommunication at some point during the relationship. Asking the accountant how they handle misunderstandings or miscommunications would be worthwhile. You'd be looking for an answer something along the lines of, if it's our mistake, we will apologize, review, and improve our processes. And then we make sure you feel like we adequately resolved the error to your satisfaction. But their answer shouldn't stop there because the customer is not always right, especially when it comes to accounting and taxes. They should also include, and if it was your mistake, we will politely tell you why it is your mistake or your misunderstanding. Hopefully you end up with a sense of their problem-solving skills and their ability to maintain professionalism. So the summary: prompt responses don't help us because they could be in recruiting-only mode, but the lack of prompt responses can tell us they are not timely in their communications. We also want to pay attention to their communications to see if it's easy for us to understand, but due to the nature of communication in hiring a bookkeeper or tax professional compared to how much more involved the communication would be when they are providing the actual service, We won't really have a lot of data points to know how well they communicate until we are actually working with them. When considering the right tax pro or accountant, many suggest prioritizing those with lots of experience and specialization in your industry. But let's unpack this. First, while extensive experience can be beneficial, it's not a guarantee of quality. Imagine an accountant who has worked solo for decades without feedback or peer review. They might've been doing things incorrectly for years, accumulating a lot of experience, but not necessarily the right kind. I think the experience requirement is also unfair to those that are newer in their career who may just be as competent. The newer accountant is usually less expensive than the experienced accountant, and while they might not know as much, It's unlikely they end up charging you to research basic things they know they should know. Even better if they charge flat prices because you're looking for a result, and if you're happy with the price and you get the result, do you really care how long it took them to provide your desired result? Next, let's talk about specialization. While it's beneficial, it's not a deal breaker. A specialized bookkeeper might have a tailored chart of accounts for your business, or no specific tax deductions for your industry, which are clear advantages. But specialization is not always essential. Many business owners mistakenly think hiring a bookkeeper means they can completely hand off their financial management. In reality, you will always need some level of involvement. Even specialized accountants will have questions about specific transactions. And a bookkeeper that isn't specialized can certainly develop that specialty for your business over time. For tax professionals, most industries don't have unique tax rules. While a specialized accountant may charge more, consider whether their expertise justifies the premium. It can, certainly it can, but it's not guaranteed. I've been doing this for 15 years. I still have to look up stuff. It's good to ask how the tax professional or bookkeeper will handle situations outside their experience or specialty. This will give you insight into their problem-solving skills and the exchange of value with you. The summary: while experience and specialization are important, they shouldn't be the sole deciding factors in choosing a tax pro or bookkeeper. It's more about finding someone who can deliver the results You need. And, uh, and this is similar to the last one. The tax pro or bookkeeper you hire should provide customization to fit your specific needs. The idea here is that a one-size-fits-all approach isn't adequate for your tax and bookkeeping needs. Okay, let's consider the realities of customization. Firms capable of true customization are often significantly more expensive. From our experience, most small businesses aren't willing to pay for it once they are quoted for it. In reality, you probably need much less customization than what these evaluation lists created by non-accountants suggest. Most firms aren't custom shops, but most firms have a hard time saying no when they should. Anytime you ask a service provider to deviate from their standard processes, to accommodate your specific requests, the risk of mistakes increases. This is because you become an exception to their established workflow. Something is going to get missed, and you are not going to be happy when you discover it, because you will be the one that discovers this type of mistake, not the accountant. If you really feel like you need customization, you must be prepared to pay a premium for it. Customization requires additional time, effort, and resources from your accountant or bookkeeper, which justifies the higher cost. On the flip side, efficient standard processes can be highly effective for most small businesses. These processes are refined through repeated use and are designed to handle the majority of common accounting needs accurately and efficiently. So instead of seeking extensive customization, Focus on finding a professional whose standard practices align well with your business requirements. The summary: customization could be beneficial, and usually it's completely unnecessary. It's more practical to seek a tax pro or bookkeeper with well-established processes that meet your needs without the added complexity and cost of customization. Next one. The tax pro or bookkeeper you hire should be of high integrity and be trustworthy. Sometimes these lists also use words like reputation and credibility. All those words mean the same thing here. So here's specific wording I've seen on many lists: inquire about their professional ethics policies and any measures they have in place to protect integrity. Look, no one is going to respond if you ask that question or inquire, we aren't ethical. We don't have integrity. Yeah, you, you definitely shouldn't trust us. Determining if someone has integrity and is trustworthy before actually working with them is really challenging. A conversation might help you feel comfortable with someone, but that doesn't necessarily indicate their integrity or trustworthiness. I like to assume everyone is trying to do a good job, and I give trust initially. Hopefully this trust is well-placed, and if not, Then reassess. Again, it's difficult to make this judgment without more interaction with the bookkeeper or tax professional. A couple of things that come to mind on what little you can try is to first pay attention to your initial interactions. Do they follow through on their commitments? And second, trust your instincts during those initial meetings. If something feels off, it might be worth considering other options. In summary, while integrity and trustworthiness are crucial, they are nearly impossible to evaluate before you start working with them. You can try my approach of giving trust initially, but remain vigilant and ready to reassess based on your interactions with them. Next, the right bookkeeper and tax pro will be technology proficient. No doubt bookkeepers should be using some sort of software, not Excel, to do your books. We have clients that track their own stuff in Excel. Great, they aren't being paid for it. Your bookkeeper that you are paying should not be tracking it in Excel for you, certainly not on paper. Tax accountants also definitely need to be using software, not a pen and paper filling out forms by hand. We agree they should be technology proficient. The challenge is, how do you know that they are technology proficient as the potential client? Simply asking if they use software isn't enough, especially if you're not familiar with the specific tools used in the tax and accounting industry, which you're likely not. So 5 indicators your accountant could be technology proficient. Email domain. Check their email address. An email like bobstaxes@gmail.com is a sign they may lack the necessary tech knowledge. A professional email domain like bob@bobstaxes.com would be a better sign of a technology-savvy business. Communication methods. Notice their preferred communication methods. If they rely solely on phone calls and avoid using Zoom, email or text messages. They may not be comfortable with modern technology. Document handling: observe how they request and handle documents. Asking for paper copies instead of digital files could be a red flag. A, a tech-proficient accountant will prefer digital documents for efficiency and security. Online presence: Look for their online presence. Do they even have a website? A lack of a website can indicate they're not really up to date with technology. And 5, software usage. While you may not know the specific software, you can ask about the types of tools they use. Names like QuickBooks, Xero, Ultratax, Lacerte, or Intuit might come up. If they're hesitant to discuss their tools, That could be a concern. In summary, you will not be able to know for sure if the bookkeeper or tax pro is technology proficient because you don't own an accounting firm. But you can use things like the existence of a business website, their email domain, their communication methods, and document handling to provide some indication of their tech savviness or, or their lack of it. Your bookkeeper or tax accountant should have the proper certifications and qualifications. You've probably heard this concept before of barrier to entry, meaning how hard is it? Look, it is not hard to start an accounting firm. For bookkeepers, you can just claim you're a bookkeeper and off you go. For taxes, it's only slightly more difficult. You have to mail a copy of your fingerprints to the IRS. Then they do a background check on those fingerprints and voilà, that's it. Notice, neither require accounting knowledge. This is why some sort of certification is better than no certification, but certifications can also be deceptive. I would ask the accountant how many hours of experience they needed in order to earn their certification. As the user of the service, you want to believe that a certification automatically equals credibility, but it doesn't. The majority of certifications consist of videos, and a test. Watch a series of videos, pass a test, get a certification. To give you an example of this, to get a CPA, you pass a grueling test, multiple sections, that takes most people an entire year to study for. Then they also have to have a year's worth of work experience, but not any work experience. It has to be supervised by another CPA. Oh, and let's not forget, you have to have a certain level of master's degree. level of accounting classes to even sit for the exam. Without that experience, you can't even get your CPA. QuickBooks certification, on the other hand, maybe 3 hours of watching videos, simple test, boom, QuickBooks certified. In the tax world, a CPA or enrolled agent are 2 certifications that are regulated by government agencies and are a plus. In the tax world, certifications such as CPA, Certified Public Accountant, or EA, Enrolled Agent, are regulated by government agencies and are reliable indicators of credibility. For bookkeeping, there are lots of bookkeeping certifications, so many, but none of them are regulated by government agencies or someone that can take their ability away to be a bookkeeper. So when evaluating a bookkeeper certification, find out if it required them to have life experience. If it did, place more weight on it. If it didn't, just consider it like a basic credential, and you're not going to use it to sway your decision to hire that accountant. The summary: ask about the experience requirements for the certification, and certifications by government agencies are best because they can enforce the standards they are regulating. Your bookkeeper or tax accountant should be organized and have high attention to detail. You can get an idea of their organizational skills through a few observations. Did they double book your appointment? Did they no-show, reschedule too many times? Do they show up late? If they can't manage promptness, which is a reflection of their organization of time, uh, and honestly requires minimal skill, by the way, It raises doubts about their ability to handle organization of providing the service I'm going to pay them for. Also consider their work environment. If you meet in person, observe their setup. During Zoom calls, pay attention to their background. Do they have piles of folders and a messy desk? I've worked with a lot of accountants over the years and have employed hundreds as well. I'm telling you that piles of folders and messy desks means Not organized. Attention to detail is going to be trickier to assess, but not impossible. You need to be observant in your communications with them. For instance, in their email communication, is it clear? Is it well-worded? Or are there errors that suggest a lack of attention to detail? During initial conversations, do they ask the same questions multiple times, indicating They might not be paying attention to your answers. While you can gauge some aspects of attention to detail through these interactions, the true test will be in their technical work, which you can only evaluate once you start working with them. The summary: the accountant's promptness to schedule meetings and the state of their work environment can be indicators of their organization skills. Paying attention to communications and emails and their retention of your answers can help you see glimpses of their attention to detail, but ultimately you won't know their true level of organization and attention to detail until you work with them. Your bookkeeper or tax professional needs to be able to scale with the needs of your business. As your business grows, your tax and bookkeeping needs will inevitably grow as well, but will they grow in complexity? Or just in volume? So 2 things to consider. First one, I've had multiple mentors over the years. Each was chosen based on the specific needs I had at the time. And as I grew and my needs changed, I moved on to new mentors who could handle my current requirements. If you outgrow your accountant, it's okay. You can find a new one when that happens. The second thing to consider Cameron Herold, author of Double Double, once explained that as the COO of 1-800-GOT-JUNK, he was the perfect COO at the time he came on. And then he and the owner agreed that Cameron had taken the business to where he could and wanted to. And the current COO— so they replaced him— the current CEO is now the perfect guy for the job. You see, the business's needs of the CEO role changed. If your business is at $100,000 in revenue, you don't want to pay for the accountant you need when you are at $5 million. Your needs will likely be different at that time. But that's expensive, right? So now, that being said, most accountants will likely be able to scale with your business if your growth is mainly from volume and not complexity. Your accountant doesn't need to be able to scale with the needs of your business. A better question to ask about scalability though, is can your accountant scale without affecting the quality of their service to you? Here are some questions you can ask. What's their firm growth been like over whatever period of time you want to know? Do they have systems for their services? What is their training process for new team members? Do they have a hiring system? Those types of questions can help you determine if the firm's growth will affect your service. We get a lot of new clients because they felt like their past firm outgrew them. The summary here: it is not important that your bookkeeper or tax professional can scale with the changing needs of your business as you grow. What's more important is that your accountant can provide the same level of service you expect as their accounting business grows. Your bookkeeper or tax accountant needs to have clear fees and pricing structures. Understanding what you'll be charged and what services are included is crucial to avoid any surprises. However, the responsibility for clarity lies with both the accountant and the client. As a client, you need to listen carefully to what is being explained and thoroughly review the contract or agreement you may sign. For example, we are always clear about the services we provide for the price our clients pay. Despite this, we often encounter clients who expect additional services beyond what they've agreed to. Consider this scenario. Clients sign up for our basic bookkeeping service, which includes a monthly financial report. We explain that a more expensive service includes quarterly or monthly meetings to consult on those reports. Some clients opt for the basic service, but later express dissatisfaction Because they expected consulting of their business's financial health, which was not included in the basic package. This misunderstanding stems from the client not listening and reading the contract properly. On behalf of all bookkeepers and tax professionals, bookkeeping is not consulting. If you want consulting, make sure you are asking for the service that includes that. Tax preparation is also not tax consulting. If you sign up to have your taxes filed, then a meeting with your tax accountant would be to go over the return to see if you have any questions about the return. But if you want advice on how to lower your taxable income or future tax planning, that is consulting and would be a separate service. To avoid these misunderstandings, Make sure you ask enough questions so that you can fully understand what is included and what is not with the service you sign up for. And remember that the cheapest option is not always the best when it comes to professional financial services. Having clear expectations that match the conversation and contract can save you from frustration and unexpected costs down the line. So the summary. Clear fees and pricing structure is a must. Your accountant should be clear what services they offer, and that clarity should match the contract you sign. Take time to make sure you fully understand what you get and what you aren't getting. The bookkeeper or tax professional needs to have a robust range of services. I can jump straight to the summary on this one. This is a ridiculous thing to include on a list. What are the needs of your business? Does the accountant offer a service that takes care of those needs? I said this before in a previous list item. If your business is at a— is at $100,000 in revenue, you do not want to pay for the accountant that you need when you're at $5 million in revenue. Your needs will be likely different, and the cost is going to be different as well. Your bookkeeper or tax professional needs to be available and accessible. Absolutely 100% true. And you need to have realistic expectations on what available and accessible means. You won't be their only client, so don't expect them to drop everything for you at a moment's notice. And I can hear some saying right now, of course I know I'm not their only client. Most of those people are the same ones that will email us, call us right after they sent the email because they didn't get a response within 10 minutes, Send us a text. They left a voice message saying they sent us an email and then complain to us 50 minutes later they can't get a hold of anyone at our firm. Don't be that person. Here are some ways to get on the same page with realistic expectations of what is a prompt response and what does your accessibility to the accountant look like. Review your agreement. What does it say about their availability to you Based on the services you agreed to. A client that pays us to file their taxes is not receiving the same accessibility as a client that is paying for email responses to their answers and questions, or a client that is paying for additional consulting services. Ask about response times. Asking about their typical turnaround time for emails, calls, and other communications is going to give you an idea of how promptly they will address you. Preferred communication methods. Find out how they prefer to communicate. Is it by phone? Is it email? Is it meetings? And how do they handle urgent requests? For example, many of our clients pay for unlimited email responses. This means they are not paying for unlimited phone calls or meetings. Client load. Ask about their current client load and how they manage their time. This can help you understand if they have the capacity to give your business the attention it needs. Or in this case, the attention that you're paying for. Availability during peak times. Discuss their availability during these times, such as tax season. This is going to help you gauge their accessibility when you might need them the most. Here are some realistic expectations to consider. Remember that bookkeeping and tax issues, while important, are rarely emergencies. Set reasonable expectations for response times. Understand that scheduled meetings might be the best way to get dedicated time with your bookkeeping or tax professional, assuming of course that you're paying for that service. And respect their professional boundaries. Continuous availability is not sustainable, and it's not a sign of a well-managed business. The summary: while it's important your bookkeeper or tax professional is available and accessible, It's equally crucial to set realistic expectations. By asking the right questions and understanding their communication practices, you can figure out if their availability and accessibility match your needs. Your accounting professional, bookkeeper, or tax pro needs to be proactive with your planning needs. Proactive planning. I agree, it's super important. Clients want their accountant not to just merely react to issues as they arise, but to anticipate potential challenges and address them before they're problems. Sounds amazing. If you want that, you'd better be prepared to pay for it. That level of anticipation requires a premium. I'd have to charge $10,000 a month for that, and I'd still only be dedicating an hour a week to thinking about your business. Many non-accountants have an unrealistic view of what proactive means in this context. They might not be willing to pay for such a high level of service, and often they don't need it. Most business circumstances aren't changing so rapidly that they need their accountant to be constantly thinking about them. The same goes for tax. Tax rules don't change frequently enough to justify That level of proactive attention. The most economical approach to being proactive is how we do it at my firm Insight. We put out a lot of content through YouTube, podcasts, emails. These are designed to inform and educate our clients, prompting them to ask us relevant questions. Clients can, can then reach out to the professional and say, hey, I saw this content on whatever topic and I have this situation. Does it Does it apply to me? And side note, make sure your service agreement includes the ability to do that, or you're going to need to be willing to pay for that extra service. Also notice, if you want your bookkeeper or tax accountant to be proactive, you have to be more involved in consuming their content. They can't be proactive with you if you ignore them. And if they aren't producing content, then I can promise you they are not going to be proactive for you. The summary: 2 ways to evaluate before you experience working with the bookkeeper or tax pro to see if they are proactive is to 1, see and ask about how much education content they produce, and 2, make sure you're paying for the level of proactiveness you want in the services you sign up for. Selecting the right tax accountant or bookkeeper is one of the most critical decisions you can make for your business. It impacts not only your day-to-day operations, but also your long-term financial health and business strategy. I hope my review of the lucky 13 things to look for when hiring a bookkeeper or tax professional has helped debunk some of the idiocy on the lists you see online, or that these non-accountant mentors give you, and that this review has armed you with the real things you can actually assess to make the right decision for yourself.