Amy RigbyHiring an accountant is a wise step as a freelancer! Unfortunately, though, it can be a headache, especially if you don’t know what you’re doing.
Over the past almost seven years that I’ve been freelancing, I worked with and spoke to at least six accountants before finding one I love working with. Below, I will share ALL my best tips for finding an accountant for your freelance business.
Step 1: Decide WHY You Need an Accountant
To simplify the process, before you go looking for an accountant, be able to specify what you need them to do.
Why? Because who you choose depends on what you need done. For example, one time, I needed help valuing parts of my business for an upcoming sale of the business, and for that, my regular accountant couldn’t help because she doesn’t specialize in mergers and acquisitions. So I had to seek help from an accountant who regularly did M&A work. On the other hand, when I needed help setting up my LLC in Florida, I went to a local CPA in my state to help with that because he has the best knowledge of state and local laws.
So before you start your search for an accountant, make sure you know exactly what you’re looking to get done. That way, when you interview your potential candidates, you can make sure you select the one with the most appropriate experience.
Step 2: Begin your search.
Now, in step 2, you are NOT committing to any accountant. You’re simply adding names to a list of potential ones.
- Google. The easiest way to begin your search is to type “accountant for freelancers” or “accountant for freelancers in [your city or your state].” Peruse the websites in the results and make a note of the ones you might be interested in working with.
- Ask your freelancer friends. Do you know other freelancers? Ask them who they work with and who they’d recommend.
- Post to Facebook groups. Facebook groups for freelancers are a helpful resource. Try searching old posts for any mention of “accountant.” If that doesn’t help, post to the groups and ask for accountant recommendations.
Step 3: Email Your Potential Accountants and Set Up a Call or Meeting
Now that you have your list of potential accountants, it’s time to cull the list. Start emailing the accountants and tell them the following:
- Your name and your business name
- Your business structure (e.g., sole proprietorship, single-member LLC)
- What you need help with (e.g., preparing my income tax return, forming an LLC, estimating my quarterly tax payment)
- Ask them if they have availability for new clients
Example email:
“Hi [Name],
My name is [Name], and I run a freelance business called [Insert Business Name If Different From Your Name]. It’s a sole proprietorship. I’m looking to hire an accountant to prepare my income tax return this year. Do you have availability for new clients? If so, could we set up a free consultation call to ensure it’s a good fit?”
Most accountants will offer to meet with you via phone or in-person for free before they charge you anything.
Step 3: Interview Your Accountant
Wait a couple of days to gather responses. Then set up calls/meetings with the accountants you like. On the call, view it as your interview of the accountant. You want to make sure you get along well and are a good fit.
What to Ask a Potential Accountant Before You Start Working With Them
- Do you work with freelancers? It’s important to find an accountant who’s accustomed to the “feast or famine” nature of freelancing and the multiple different sources of income you may have from side gigs.
- Do you consider your approach to be conservative (you follow a strict interpretation of the law) or liberal (you loosely interpret the law)? As long as the accountant doesn’t advocate for anything illegal, there’s no “right” or “wrong” answer to this. This is just completely for your comfort level. For example, I am extremely conservative when it comes to the law; I like to follow the letter of the law to a tee. But some accountants are much more liberal in their interpretations of the laws and are willing to get creative when there is gray area. I am NOT comfortable with that. It’s important your accountant knows your comfort levels.
- What accounting software(s) do you use? Some accountants will ONLY work with Quickbooks, while others will only work with Xero. This is essential to know because going with one accountant might mean you have to change your accounting software. Sometimes, though, accountants don’t care which software you use as long as you can export a Balance Sheet and Profit & Loss Statement for them to review at the end of the tax year.
- What are your rates? For tax returns, most accountants charge a flat fee depending on the type of return. For consultations, accountants typically charge by the hour. Make sure you know their rates ahead of time.
- How do you ensure the safety of sensitive client info? This is particularly important to ask if you will work with your accountant virtually instead of in-person. The accountant should have a secure online portal where you can upload documents. They should NOT send or receive tax forms and sensitive data via email.
- Do we ever need to meet in person, or can this all be done online and by phone? Many modern accountants are fine with doing everything 100% online. I rarely meet with my accountants in person. This is up to you, though. If you prefer meeting in person, make sure your accountant is okay with it. Same goes for if you prefer doing everything online.
- Do you outsource any of your work, or will I always be working directly with you? One thing a lot of freelancers don’t realize is that many accountants outsource or subcontract their work. They might have a bookkeeper on their team, for example, who handles your books, and the accountant merely supervises. They should be transparent about this, though, as you have a right to know who is looking at your private information.
- Tell me about your process for doing income tax returns. How do I get my info over to you? Every accountant is different when it comes to their income tax return process. I’ve had accountants send me a client intake form to fill out; others have simply told me to send over a spreadsheet of my income and expenses for the year. Ask for details on how they handle it.
- If I were to get audited by the IRS, would you represent me? A CPA should be able to do so, but they might not want to. Just ask so you know in case this happens.
- Can you provide me the contact info to some of your clients as references? I’d like to reach out to them to learn more about what it’s like to work with you. This one is optional, but if you still aren’t sure about an accountant, ask them to provide references. I’ve done this before, and he was totally fine with it. I was able to email his client privately, and she gave him a glowing recommendation.
Step 4: Get Set Up With Your New Accountant!
Your new accountant may ask you to sign an engagement letter to begin work. They will then need access to your accounting software (if you use it) and may have you fill out a client intake form so they can gather pertinent info, such as your tax ID number and marital status.
9 Accountant Red Flags to Watch Out for
Red flag #1: They can’t provide any testimonials or references.
If an accountant can’t give you any testimonials from their clients or provide contact info to happy clients, don’t work with them.
Red flag #2: They get offended by your questions.
You have a right to vet a professional before you hand over your sensitive data and your money. If an accountant balks at your fair questions, then run the other way.
Red flag #3: They ask for your bank account login information.
There is no reason an accountant should need to log into your bank account. If you have accounting software, they can see your transactions there. Plus, if needed, they can always ask you for your bank statements. Don’t let anyone (your accountant or otherwise) log into your bank account.
Red flag #4: They call themselves a CPA, but their state database doesn’t show their name or shows that their license is expired.
To be a Certified Public Accountant and attach “CPA” at the end of their name, your accountant must follow strict state regulations, including keeping up-to-date on continuing education and renewing their license via a state exam. By law, if they don’t do those things, they cannot use “CPA.”
To find out if your accountant’s CPA license is up-to-date, search their name in CPAVerify.org.
Red flag #5 They charge you based on a percentage of your tax refund.
This is a common scam: Tax preparers who charge you a percentage of your tax refund. That’s just incentive for them to falsify the numbers to get you a bigger refund.
Red flag #6 They make promises around how big of a refund they can get you.
Similar to the scam above, a tax preparer/accountant should never promise you a big refund. They should just do the work legally and you get the refund (or none) that the law allows.
Red flag #7 They’re difficult to get in touch with and slow to respond.
It’s frustrating to wait for weeks to hear back from someone who has access to such personal information. If the potential accountant is difficult to get in touch with, you may not want to work with them.
Red flag #8 They do not have any systems in place to keep your private data secure.
When you ask them how they keep your data safe, if they don’t have an answer, don’t work with them.
Red flag #9 They ask you to send your tax forms, Social Security Number, and other sensitive data via EMAIL.
Never, never send sensitive data over email. It’s too easy for hackers to gain access to it. If your potential accountant is asking you to email your SSN or other sensitive data to them, decline to work with them.
Does My Accountant Need to Be Local?
No, most of the accountants I’ve worked with I’d never even met. However, there are some cases where it’s helpful to have a local accountant, such as when you’re trying to set up an LLC in your state. In that case, you need an accountant who understands your state’s specific laws.
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