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We are not playing on the same team

Guide to selecting an accountant

The topics I teach cover the wide range of aspects of successfully, and profitably operating a garden center. Many of the programs I teach deal with aspects of financial management. There are two reasons for this. The first is this is a requirement of any business; successful financial management through understanding. The second reason is that I have the advantage of having grown up in a family business. I do understand there is a difference in accounting and small business accounting.

Accounting deals with debits and credits; double entry systems, and a bunch of other terms that are difficult to understand. Then there is small business accounting. This second type is having information that becomes a series of tools for you.

Just like a shovel and garden hose can be the right tools for the job, this financial information should also be the right tools for the job of operating the business.

Unfortunately, just a piece of paper with words and numbers is not the right thing; it has to be the right information that is arranged in the manner you can understand and utilize to make decisions.

I like to think that when you attend the sessions I teach you see me as a tool as well as someone that is on your side; understanding the challenges and opportunities as well as interpreting that information on the paper so to help you make better business decisions.

During the first weeks of January, I took a look at the many businesses that had called me over the past calendar year. The most frequent subject of our conversation was overwhelmingly something that dealt with money. It may have been inventory control, seasonal ordering, the bottom line, payroll, cashflow or some aspect of the financial statements.

With each of these callers there were several aspects of the concerns that were constant through all the businesses. While you as the owner and I were starting to work together on the same team, there was frequently someone that was not playing on the team. That person was the accountant or bookkeeper.

As we discussed the concerns of the caller, I was usually wondering why the accountant was not having this conversation with the business owner. If the business owner stated they had used the same accountant for many years, I was wondering why this question was instead being asked of me as well as why not being asked many years earlier in the working relationship.

Looking at the financial statements, I frequently found something that was out of place. Perhaps it was an expense that was reported incorrectly, or an expense that was excessively high or low with relation to the revenues.

The comment I frequently make has been, “How is it you can come to this class and have a fellow business owner teach you something in an hour when the accountant has not shown it to you in all the years you have been paying that accountant?”

From the front of the room, the expression on faces of people in the audience is speaking volumes with regards to the concerns. After the class is over and having told of the experiences of our business in having good accountants, my response is that you have to look for them; that you should prepare a series of interview questions so that you do not waste money, and several years, in finding out the next accountant is no better than the last one.

So, what could you ask an accountant? Here is my list of what I would want to know before I hire the next one.

How many other garden centers do you perform accounting duties for? This is asked because some accountants will say, ‘If there is a problem, I will let you know’. If the accountant does not do the books for other garden centers, how would this one know how to compare your experiences with another garden center?

How many other independent retailers do you perform accounting duties for? While there are unique aspects, your business has more in common with other small businesses than you have differences.

How many other small businesses do you perform accounting duties for? This is a fall back question. If we do not get the answers we want to the first two questions, at least we want an accountant that has the experience of working with a business owner who is wearing many hats.

Where do you live? I want to know the accountant lives in the immediate area. I want them to have a feel for the community and what is going on locally.

What stores do you shop in? Does the accountant list chain stores, the box stores, or do they list independents? With this question I want to see if they have a feel for the independent businesses.

What do you do for hobbies? The accountant gets a lot of ‘brownie points’ if the answer includes, ‘working in the yard’ or ‘working in the garden’. This ties to the shopping preference lets me know if I might see them as a customer.

How often can I expect to see you at my business? Sure, I can make an appointment to go to their office, but sitting in that big leather chair in that office with a cup of coffee in my hand and all the dark furniture puts me to sleep. I want to see that accountant on ‘my turf’.

When would those visits be? More brownie points are given when the visits occur on weekends and after traditional office hours. This tells me I can expect the accountant to be interested in my business.

How will you help me make money? We had an accountant that said that if his annual fees were $6,000, that his job was to show us how to save $6,000 or make $6,000 or a combination of the two so that the accountant was a source of income instead of an expense. I am looking for an accountant with the same idea.

In changing to your accounting firm, how many years of my business history do you need to review? The shorter the number of years, the better I like it. More brownie point if the accountant says none.  My experience has been that some accountants want you to spend thousands of dollars for them to review, and possibly restate your financials. This idea has never made sense to me as I have not seen a situation where the review resulted in getting tax dollars back.

How will you find out what I do not know or understand about my financials? What will you do about it? A two part question; my belief has been that accountants are very smart and know when you do not understand what they are talking about. I want your business to have an accountant that calls your bluff and makes you demonstrate you understand the financials.

There was one accountant I met that gave potential new clients a written test about accounting terminology. If the business owner failed the test, they were required to take a class at a local college to learn more about accounting. The accountant’s explanation was that a successful business required both parties to be ‘carrying their weight’ in the discussion and efforts to make the business profitable. I want you to have an accountant like this.

Another multi-part question; “I have three children at home, enjoy looking at other garden centers, like to write with a nice pen, do enjoy cooking and socializing with some of my customers. Can I tie these to my business?”

Does the accountant suggest that instead of an allowance you employ your children in the business? The accountant may suggest you track the mileage and meal expense you have as you visit the other garden centers looking for ideas to add to your business. Perhaps the accountant suggests the business provide you with a nice Monte Blanc and that you keep track of the customers you invite to your cookouts, and the expenses for these ‘client goodwill’ events you are hosting.

Expenses are subject to interpretation as to what does and does not qualify. You want an accountant this is, at the least, wanting to listen to your idea of claiming an expense for your business.

Ask the accountant how many hours of continuing education they are required to take each year? Then ask how many hours of continuing education they do take each year. As an example, the accountant may state the requirement is 18 hours per year. Their second answer may be that they take the required 18 hours each year.

Do you want someone that only does the required minimum? Or do you want an accountant that is investing in themselves so they can be of more value to you?

The final question for the accountant is, “How much is two plus two?” The answer I want to hear from the accountant is, “How much do you want it to be?”

OK. Perhaps that is not the answer you were expecting. However, that answer demonstrates two things. The first is that accounting is not an item of black and white. There are lots of ‘shades of grey’ that are to be considered. You definitely do not want an accountant that simply states you should just send them the receipts and they will deal with it. Again, this is a partnership.

The second reason for this question is that you want to see if the accountant has a sense of humor. For many small business owners, accounting is the painful part of operating the business. You do not need someone adding to the pain.

Notice that in these questions, none of the questions will allow for an answer that is ‘yes’ or ‘no’. Just as when you are selling, you want open ended questions so that you can get the substance behind their answer.

Want an accountant that is going to work as hard for your business are you are working? It is going to require an effort on your part to find that person. This interview can help.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 128, Dardanelle, AR. 72834. Phone 727-823-7205. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.