5 Signs It’s Time to Find a New Accountant for Your Business

July 23, 2022

As a business owner, you likely want to do whatever you can to keep your company’s finances in check.

This is why it’s imperative to work with an accountant that you can trust and count on to maximize your enterprise’s financial health.

Whether you have an in-house bookkeeper or you outsourced all of your bookkeeping tasks to an accountant at a firm, you want to ensure that the person you entrusted your business’s finances to is doing the best job possible. That said, are you wondering if you hired the right person for your business’s accounting needs?

In my experience as the CEO and founder of CMA Exam Academy (a Certified Management Accountant exam review program) and as a CMA myself, I know how important it is to work with an accountant who truly has your business’s best interests at heart. You wouldn’t want to continue working with an accountant who isn’t doing the best they can to boost your bottom line! That said, here are some telling signs it’s time to find a new accountant for your company.

They Don’t Provide Financial Statements Each Month

As the company owner, you will need to make critical decisions all the time to move your company forward. How would you be able to make the smartest, most informed decisions for your company if your accountant is not regularly providing you with a Profit & Loss Statement, Cash Flow Statement, Balance Sheet Statement, and other crucial financial documents each month? Knowing exactly what is in these statements will give you an accurate picture of profit margins, company expenses, and how much cash is available for big business purchases.

You need to analyze these statements each month to locate areas in the business that may be draining overall profits. Looking over these statements will also help you better budget for next month’s initiatives and project future sales and profits. That all said, if your current accountant doesn’t share these financial documents every month, it may be time to look for a new one.

You Find Many Inaccuracies in Your Financial Statements

Say your accountant does provide your financial statements each month, which is ideal, but you notice a ton of inaccuracies in them. Shipping costs are not correct, the amounts of certain client invoices are way off, and payroll amounts are all wrong… all of these inaccuracies will lead to a false depiction of profit margins and the company’s overall bottom line. It also shows that your current accountant is doing a sloppy, careless job or they just don’t have great attention to detail, which is paramount for handling any company’s finances.

So if you notice all kinds of errors in your statements, it would be in your best interest to consider finding a new accountant. Or, if you don’t have the resources to hire a full-time CFO, then you should consider hiring a fractional CFO who can provide you with the same level of expertise but on an as-needed basis.

They Don’t Regularly Reconcile Your Accounting Books

To optimize a company’s financial health, an accountant needs to reconcile the books (ie. compare bank statements and journal entries, bank deposits and withdrawals in the accounting ledger, etc. to ensure everything is consistent) on a regular basis. If they don’t, they can easily forget to record a recurring monthly expense when setting up the next month’s budget. Also, your accountant may not even realize that an invoice hasn’t been paid yet or they will just guesstimate what a transaction was when writing journal entries, which could be way off from the actual amount (leading to an inaccurate financial picture).

They Take Way Too Long to Get Back to Your Questions

This is a big one. When running a business, there will likely be instances when you have a critical question for your accountant that must be answered right away. Maybe you need to know if you have enough leftover budget to pursue a promising new sales strategy. Or, you might need to quickly verify if you were overcharged when purchasing bulk raw materials to produce your company’s products. Whatever the case may be, does your accountant take forever to get back to your emails/calls, or do they simply not reply to some of them? Not only is this incredibly frustrating, but also it can cause you to miss out on business growth opportunities.

Don’t you want to know that your accountant wholeheartedly values your business? That they truly care about helping your company grow and succeed? I bet. Yes, your accountant could just be insanely busy, as we all are, but there is no reason why they can’t send a quick email to let you know that they will be able to fully get back to you a little later. So if your current accountant takes forever to get back to your questions, it may be time to start looking for a new one.

They Don’t Document Expense Receipts Accurately

As a company owner, you likely have a ton of expenses that you write off every tax season. These could include the costs of your products’ packaging supplies and shipping, bulk raw materials, digital marketing costs, project management software, billboards and other advertisements, business dinners, and the list goes on. It is your accountant’s job to ascertain that all of these expenses’ receipts are properly documented. This will be vital in the event that your business is audited by the IRS — having proper documentation of all the receipts will make the audit much more streamlined and a lot less stressful.

Therefore, if your current accountant doesn’t properly record these receipts, it is time to start looking for a new one. Trust me, the last thing you want to happen is for your business to be audited and you realize that your accountant didn’t bother to record any of your receipts. This could lead to hefty fines and worse.

They Don’t Help With Financial Analysis

The accountant you hire needs to be the finance expert for your business — they should be giving you an in-depth analysis of your accounting books and statements to help you fully understand your company’s financial health, overall costs, and profit margins. This financial analysis is so pivotal for keeping you informed on the current state and potential future of your business’s finances, which will help you make sound business decisions.

Therefore, if your enterprise’s current accountant doesn’t help with any financial analysis at all — they only keep the books updated and call it a day — it’s time to find a new one. I recommend looking for an accountant who makes a point to walk you through each statement at the end of the month and show you areas in the business to cut costs, allocate more budget for, etc. This will help you run your business much more efficiently.

To Wrap It All Up

As a business owner, you will want to entrust your company’s finances to the best accountant possible. It’s time to find a new accountant if your current one doesn’t provide financial statements every month, do monthly reconciliations of your business’s books, or help with financial analysis. Other telling signs that it’s time to find a new accountant are if they don’t help with financial analysis and you find a lot of inaccuracies in your books. Start looking for a new accountant now if any of these signs apply to your current one.

Nathan Liao is the founder of CMA Exam Academy, a top Certified Management Accountant exam review program. As a CMA and CMA coach, Nathan mentors accounting and finance professionals in over 80 countries to earn their CMA certification in as little as 8 months. The unique review framework in CMA Exam Academy has proven to be the key to his students’ outstanding success in attaining their dream of earning the Certified Management Accountant certification.