Whether your nonprofit organization is newly formed, growing, or just looking to switch things up, there may come a time when you need to hire a new accountant. Some organizations require a full-time employee to handle all in-house accounting matters, while other organizations prefer to contract with an outsourced accounting firm. If your organization requires a financial statement audit, you will need to hire an independent firm. No matter what your needs are or which path you take, be sure to shop around and ask lots of questions to find the best fit.
Here are a few questions you should always ask before hiring a new accountant:
What type of credentials do you have?
One of the first questions you should ask an accountant is their type of certification or firm credentials. Ideally, you will want to have access to a licensed Certified Public Accountant (CPA). CPAs undergo rigorous testing to earn their license and are required to take ongoing professional education courses to stay up-to-date on all the latest accounting regulations. CPAs are typically the most knowledgeable people in the accounting world, and they will be able to give your organization important insight.
Who will perform the work?
If you’re working with an accounting firm, it’s crucial to know who will be personally overseeing your finances. Depending on the type and complexity of work, there may be several different people involved. You may communicate with some of these people more than others, but it’s important to understand what role each team member plays.
What kind of clients do you work with?
Many accountants have a particular niche or industry in which they are most experienced. For nonprofit organizations, you will want to make sure that your accountant is familiar with nonprofit accounting and has in-depth experience in working with nonprofit organizations. Nonprofit accounting can be very different from for-profit business accounting. Will your accountant be able to provide knowledgeable answers to your questions?
What is the size of your firm?
Accounting firms come in many different sizes with different benefits and weaknesses. If you’re working with a sole individual or small accounting firm, you may experience more of a personal rapport and customized services; however, small firms may not be able to provide the same level of resources or knowledge areas that could help your organization grow. Large accounting firms will often have broader knowledge, more personnel, and the capacity to help take your organization to the next level, but there may be less flexibility and more staff turnover. Both small and large accounting firms have pros and cons, so you’ll need to think about which type fits your organization’s current and future needs.
How do you bill for your services?
Some accountants bill on an hourly basis, while other use flat-fee pricing instead. An accountant’s billing model can also vary by service type. Consulting work is often billed by the hour, since it can be difficult to predict the extent and duration of the work; while a flat-rate fee is common for outsourced accounting services, which may also include software subscriptions. You’ll want to discuss these billing arrangements in detail before you choose to hire an accountant. Ask them how they charge for other costs as well, such as travel, filing fees, and report production costs.
Why should our organization hire you?
This is the final and most critical question to ask a potential accountant. Your accountant should be able to explain why they are the best fit for your organization. What do they bring to the table that no other accountant or firm can? You should always request a list of client references as well. This will help you verify their track record with similar organizations and get a sense for quality of their service.
Hiring a new accountant or accounting firm can be a difficult process. It can be tough to judge their actual work product until after you’ve already taken the plunge and hired someone. But by asking these questions in advance, you should be able to gain a better understanding of their qualifications and client approach. This will help you find the right fit for your organization.