Questions to Ask Accounting Firms
Questions for a first meeting with an accounting firm, written for an owner of a small or growing business. They cover who would do the work, what the fee actually includes, how mistakes and deadlines are handled, and how to check the answers.
The questions
Open any question for the note
Who would actually do my work day to day, and who reviews it?
Why ask it
The partner in the meeting is rarely the person in your ledgers. Ask for the name and the qualification of the person doing the work, and whether a second person checks it, because unreviewed junior work is where most errors in small accounts come from.
How many clients do you have that look like me, and what size are they?
Why ask it
You want to be a typical client, not their smallest or their largest. A firm whose other clients are ten times your size will price you as an afterthought; one where you would be the biggest may not have seen your next problem before.
Are you licensed to represent me if I'm audited, and have you done it?
Why ask it
Rights to represent a client before a tax authority depend on credentials, so ask which they hold and how recently they have used them. A firm that has handled audits will describe the process plainly; one that has not will change the subject to how unlikely it is.
What exactly is in the annual fee, and what triggers a bill on top?
Why ask it
Get the list of included work and the list of extras: a late correction, an extra set of accounts, a letter to a bank, a payroll change. The second list is where a quoted fee quietly becomes a larger one.
How do you charge for a phone call or a quick question?
Why ask it
This determines whether you will actually ask for advice before a decision or after it. Firms with an unlimited questions policy tend to price it in elsewhere, which is fine as long as you know which model you are buying.
What would the first year cost, including tidying up the state my books are in now?
Why ask it
Cleanup is the most commonly under quoted item in this industry, and it is unavoidable if you are switching firms mid year. Show them your actual records rather than describing them, and ask for the cleanup as a separate figure.
Which software do you require, and who pays for the licenses?
Why ask it
Some firms only work in one system and will move you onto it at your expense, along with the retraining. Ask whether the subscription is in your name or theirs, since that decides who controls the data later.
If I leave in two years, what do I take with me and in what format?
Why ask it
Ask this in the first meeting, while goodwill is high. You want confirmation that your records, working papers and access remain yours, because disputes over data on the way out are common and expensive.
In your busiest weeks, how long does an email take to get answered?
Why ask it
Every firm has a season where response times triple, and it usually coincides with your own filing pressure. A specific commitment, two working days, and the name of who answers when your contact is buried, is worth more than a promise of good service.
Who covers my account when that person is on leave or leaves the firm?
Why ask it
Small firms are exposed here, and a single departure can leave your file untouched for a month. Ask about turnover in the team that would handle your work over the last two years.
What do you need from me each month, and by what date?
Why ask it
A firm that answers precisely, bank statements by the fifth, sales invoices in the system weekly, has a working process. A vague answer means you will be chased at year end for eleven months of documents you have already lost.
If a filing is late or wrong because of something at your end, who pays the penalty?
Why ask it
Ask for the answer and then look for it in the engagement letter. Most firms accept responsibility for their own errors, but the interest, the penalty and your time are treated differently, and this is the moment to find out which.
Do you carry professional indemnity insurance, and at what level?
Why ask it
It is a fair question and a licensed firm will answer it without discomfort. The level matters in proportion to the size of the mistake that could be made in your accounts, not in proportion to your fee.
Would you advise me on tax planning, or only file what I give you?
Why ask it
These are different services and both are legitimate. What you need is clarity, because assuming you have a planner when you have a preparer is how people discover options in April that had to be taken in October.
Looking at what I've shown you, what would you change in the first three months?
Why ask it
This is the closest thing to a work sample you will get for free. A useful answer names something specific about your records, structure or timing. A generic answer about best practices tells you they have not looked.
What happens when a client's records are a mess, or when they go quiet on you?
Why ask it
You will be that client at some point in the year. A firm with a real answer, reminders, a deadline, a conversation, is easier to work with than one that says it never happens, which usually means silence and then a rushed filing.
Have you told a client they were not a good fit, and what was the reason?
Why ask it
Firms with standards can name a type of work or client they decline. It also tells you what would make you a difficult client for them, which is useful before you become one.
Can I speak to two clients of about my size who've been with you three years or more?
Why ask it
Ask for length of relationship rather than satisfaction, since anyone can produce a happy new client. If no reference can be arranged, ask why, and treat that answer as part of your decision.
Would I hear from you between filings if something looked wrong?
Why ask it
The difference between a bookkeeper and an adviser is whether anyone calls you in July. Ask for an example of something they flagged to a client last year unprompted, and what happened next.
What do you need me to stop doing?
Why ask it
An unusual closing question, and a revealing one. A firm that has been paying attention will name the habit that costs them most time on accounts like yours: cash withdrawals with no receipts, personal spending through the business, invoices raised in a document rather than a system.
Choosing and checking an accounting firm
Practical guidance for the conversation itself
What to bring to the first meeting
- Last year's tax return and financial statements, and the current year to date figures however rough they are.
- Access to, or a screenshot of, your bookkeeping system as it stands. Honest mess produces honest quotes.
- A one page description of the business: what you sell, how you are paid, how many people you employ, where you operate.
- Anything unusual coming up: a loan application, a property purchase, a partner joining or leaving, sales into another country.
- Your three biggest frustrations with how the finances run now. Those are what you are actually buying a solution to.
Check these independently
- The license or registration, through the relevant professional body or state board rather than the firm's own website.
- Whether the individual doing your work is qualified, or supervised by someone who is.
- How long the firm has traded under its current name, and whether it has recently merged or been acquired.
- Public reviews from business clients rather than personal tax clients, since the services are not comparable.
- The engagement letter, read in full before signing, including scope, fees, termination and who owns the working papers.
Comparing quotes fairly
- 1Write down the exact list of deliverables you need, then ask every firm to price that same list.
- 2Ask each of them for the first year cost and the steady state cost separately.
- 3Add your own time to each quote. A cheaper firm that requires you to prepare more is not cheaper.
- 4Ask what would make the fee rise next year, and by how much it rose for comparable clients this year.
- 5Decide before the meetings what you would pay for good advice as opposed to compliance, so that a higher quote gets judged on the right basis.
Warning signs
- A fee calculated as a share of the refund they say they can get you.
- Any suggestion that a deduction can be claimed without records to support it.
- Reluctance to put the scope and the fee in writing.
- A preparer who will not sign the return they prepared, where signature is required.
- Pressure to decide in the meeting, or a discount that expires this week.
- No named person responsible for your file, or a different contact each time you call.