Questions to Ask Accounting Firms
Questions to ask an accounting firm before you hire it, written for the owner of a small or growing business sitting in a first meeting. The 54 questions open with the ones to ask if time is short, then cover the firm and its team, fees, how the work runs day to day, advice beyond the filings, and the safeguards: audits, errors, insurance, your data, references and what happens if you leave. Every question carries a short note: what a solid reply includes, what a dodge sounds like, or the follow-up to put next. Licensing, audit rights and disclosure rules are not the same in every country, so several notes tell you to check what applies where you file. This list is for a client choosing a firm. Interviewing for a job at an accounting firm is a different conversation.
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The questions
Each question, and why to ask it
Start here
What services does your firm offer, and which of them would a business like mine need?
Why ask it
Most firms list bookkeeping, payroll, tax returns, year-end accounts and advice, but few are equally strong in all of them. Listen for the one they describe in the most detail, since that is usually where their best people sit. If they recommend everything on the list, ask which they would drop first if your budget were half the size.
Who would prepare my accounts and returns, and who checks them before they are filed?
Why ask it
The partner across the table is often not the person who will be in your ledgers. Get the name and the qualification of whoever prepares the work, and find out whether a second person checks it before anything is filed, because that check is what catches a miskeyed figure while it is still cheap to fix.
How many of your clients are businesses like mine, in my industry and about my size?
Why ask it
You want to be a typical client, neither their smallest nor their largest. Among clients ten times your size you may be treated as an afterthought, and as the biggest on the books you may bring problems the firm has not met before. Push for a rough number, not a yes.
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.
What licenses and qualifications do the people on my account hold?
Why ask it
Titles differ by country: CPA, chartered accountant, enrolled agent and others, and in some places anyone may call themselves an accountant. Ask which body regulates each person and what that credential lets them sign or file that an unqualified preparer cannot. Then look the names up on the regulator's own register, which takes a few minutes.
Which records do you want from me each month, and by which date?
Why ask it
Precise replies sound like this: bank statements by the fifth, sales invoices entered weekly, receipts photographed as you go. When the reply is loose, the gathering tends to pile up at year end, and by then some of those papers are hard to find. Get the list in writing so whoever does your admin can work from it.
Looking at what I've shown you, what would you change in the first three months?
Why ask it
Only worth asking if you brought your records, and a good reason to bring them. Someone who has read them points at something particular: an account that has never been reconciled, a structure you have outgrown, a deadline you are cutting fine. If you get general talk of best practice, your papers probably went unread.
Firm and team
How long has the firm been in practice, and has its ownership changed in the last few years?
Why ask it
Age matters less than stability. A firm that has recently merged, been bought by an investor or lost a founding partner may be changing its prices, its software and its staff all at once. If there has been a change, ask what is different for clients since.
How big is the firm: how many partners and staff, and how many of them are qualified accountants?
Why ask it
The total matters less than the mix. Find out how many are qualified, how many are still training, and how many work on clients like you instead of in a department you would never use. A firm of forty with three people in its small-business team is, for your purposes, a firm of three.
What problems do you see again and again in businesses in my industry?
Why ask it
Someone who works in your trade answers quickly and in its vocabulary: retentions in construction, tips in a restaurant, deferred income in software, stock in retail. A reply that would fit any business suggests yours would be the one they learn the industry on.
Will the same people handle my account every year, or does the team rotate?
Why ask it
Some firms move juniors between clients on purpose, which is good training for them and means you explain your business again every year. Neither model is wrong. What you want to know is who holds the memory of your file: a named manager, or only the notes in the system.
Who covers my account when that person is on leave or leaves the firm?
Why ask it
A small team is the most exposed, since one resignation can leave a file untouched for weeks. Ask who the named deputy is and whether that person ever opens a client's file before having to. Then ask how many people have left the team in the last two years.
Is any of my work sent outside the firm, to contractors or an overseas team?
Why ask it
Outsourcing preparation work is common and not a mark against a firm by itself. You are asking so you know where your records travel, who checks what comes back, and whether the firm tells clients about it in writing. Some places require your consent before tax information is sent abroad, so ask how it works where you file.
How does your team keep up when tax and reporting rules change?
Why ask it
Licensed accountants generally have to complete continuing education, so the hours themselves tell you little. The better evidence is recent: ask for a rule change from the past year that affected clients like you, and how those clients heard about it. An email sent to the whole client list is a weaker answer than a call to the people it touched.
Do you act for any of my competitors, suppliers or business partners, and how would you handle a conflict?
Why ask it
Working for several businesses in one trade is normal, and it is part of why a firm knows the industry. The trouble comes when two clients are on opposite sides of a deal or a dispute, or when the firm also acts for your co-owner personally. Where there is a real policy, they can tell you who decides and which client would be asked to go elsewhere.
Have you told a client they were not a good fit, and what was the reason?
Why ask it
Most firms with standards can name a type of work or client they decline. The reason also shows what would make you a difficult client for them, which is useful to know before you become one.
If my business doubled in size, what would change in how you serve me?
Why ask it
You are checking for headroom. A good answer names the point at which you would need monthly management accounts, a payroll bureau or an audit, and says whether the firm provides those or passes you on. Changing accountants in the middle of a growth spurt is hard work, so it helps to know where their ceiling is before you reach it.
Why should I choose your firm over a smaller practice or a larger one?
Why ask it
It sounds like an invitation to sell, and the sales answer is the weak one. The useful reply admits a trade-off: a small practice gives you the owner's attention and less cover, a large one gives you specialists and a higher bill. If you hear only strengths, ask what a client gives up by picking them.
Fees
Do you price by fixed fee, by the hour, or as a monthly package?
Why ask it
Each model moves the risk somewhere. Hourly billing puts the cost of a messy year on you, a fixed fee puts it on the firm, and a monthly package spreads the bill but can hide what each piece costs. Whichever they use, ask to see a sample invoice so you know how much detail you would get.
If I call with a ten-minute question, does that show up on a bill?
Why ask it
Better to find out before the first call than from the first invoice. Some firms fold ordinary questions into the fee, some bill in short units of time, and some draw the line where a question needs research. Ask for an example of a question that would be free and one that would not.
What would the first year cost, including tidying up the state my books are in now?
Why ask it
Cleanup is the figure most easily quoted too low, because nobody knows how bad the books are until someone opens them. Show the firm the actual records instead of describing them, and ask for the cleanup as its own line so the second year's fee is visible underneath.
Will I get an engagement letter setting out the scope and the fee before any work starts?
Why ask it
The engagement letter is the contract, and a careful firm will not begin without one. Read what it says you are responsible for as closely as what it says they are, because the client's duties are where blame lands when a deadline is missed. Anything promised in the meeting and absent from the letter should be added before you sign.
How much did fees rise last year for clients like me, and how much notice did they get?
Why ask it
Asking about last year gets a fact where asking about next year gets a reassurance. An annual rise is ordinary. What matters is whether it is announced before the work is done or discovered on the invoice afterwards.
Is there a minimum fee or a minimum term, and how much notice would I have to give to leave?
Why ask it
Monthly packages sometimes carry a year's commitment or a notice period that runs past your year end. Neither is unreasonable if you know about it. Find out as well what happens to work already paid for and half finished when notice is given.
When do you send invoices, and what are the payment terms?
Why ask it
Some firms bill monthly by direct debit, some on completion of each job, and some ask new clients for a deposit. Match it to your own cash flow, since a large bill landing in the same month as your tax payment is a problem you can design out now. Ask too whether a filing would ever be held back over an unpaid invoice, because practice varies and so do the professional rules on it.
If a job turns out bigger than the quote, do you check with me before carrying on?
Why ask it
The answer you want is yes, in writing, with a revised figure. Overruns usually come from something the firm could not see when it quoted, such as a missing year of bank statements, so also ask what has pushed the fee up for other new clients. That list tells you what to tidy before they start.
Day to day
Which software do you require, and who pays for the licenses?
Why ask it
Where a firm works in one system only, moving onto it costs you a subscription, a data transfer and a few weeks of retraining. Others will work in whatever you already use, sometimes for a higher fee. Ask whose name the subscription is in, because the account holder is the one who keeps access if you part.
Who keeps the books day to day: your team, my staff, or a bookkeeper I'd need to hire?
Why ask it
Raising invoices, coding the bank feed and chasing receipts all have to be done by somebody, and the quote assumes it is one of you. Go through those tasks one at a time and write a name against each. If the firm takes them on, ask whether that is the same team as your accountant or a separate bookkeeping desk.
Would I have a named contact with a direct line, or does everything go through a shared inbox?
Why ask it
A shared inbox or a ticket system is efficient until you need a judgment call the same afternoon. Get the name, the direct number and the hours. If the contact is a junior, ask how a question reaches someone senior and how long that usually takes.
In your busiest weeks, how long does an email take to get answered?
Why ask it
Ask first when their busiest weeks are, since that depends on the filing calendar where you are and on the kind of clients they have. If their peak lands on your own deadline, the reply time they quote for it is the one that matters. Get it as a number of working days, plus who to try when your contact is buried.
How does moving to your firm work, and what will you ask my current accountant for?
Why ask it
Expect a checklist: prior returns, the closing balances, fixed asset records, payroll history, logins and authority to deal with the tax office for you. Ask who writes to the old firm and how long the handover usually takes. Timing matters too, because moving just after a year end is cleaner than moving a month before a deadline.
Do you use a client portal, and what should never be sent to you by ordinary email?
Why ask it
Bank details, payroll files and identity documents are what a fraudster wants from an accounting firm's inbox. The careful answer names a secure upload route and adds that the firm never announces a change to its own bank details by email. If you are told email is fine for everything, weigh that.
How often would we meet to go through the numbers, and is that time included in the fee?
Why ask it
Many engagements include a single meeting, held when the return is ready to sign, which is too late to alter anything in it. If you want a quarterly review, say so now and have it written into the scope, along with who attends and whether it is in person or on a call. Meetings billed by the hour tend to get cancelled by the client, which is worth being honest with yourself about.
When would I see my figures each month or quarter, and what would the report look like?
Why ask it
Ask to see a sample pack with another client's details removed. You are looking for whether it is a raw export from the software or something with a page of commentary, and how many days after the period ends it arrives. A pack that lands after you have already made next month's decisions is of little use, however well it reads.
How many days before a deadline is a return normally ready, and do I get to read it before it is filed?
Why ask it
You are the one who answers for the figures, so you should have time to read them. A return that arrives for approval on the last afternoon has to be signed on trust. Ask what their cut-off date for your records is, and what happens to clients who miss it: an extension, a late slot, or an extra charge.
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. The reassuring reply describes a routine: a reminder, a date, then a phone call. Being told it never happens is less comforting than it sounds, since it often means nothing is said until the filing is being rushed.
Would I hear from you between filings if something looked wrong?
Why ask it
Plenty of firms only open a client's figures when a filing is due, so a sliding margin or a growing tax bill can go unmentioned for months. Ask for something they raised with a client last year without being asked, and what the client did about it.
Which client habits cost your team the most time on accounts like mine?
Why ask it
An odd thing to ask, and people who have looked at your records will have an answer ready: cash taken out with no receipts, personal spending through the business, invoices typed in a document instead of raised in a system. Whatever they name is also what you would be billed for sorting out.
Advice
Do you plan ahead to bring my tax bill down, or only file what I give you?
Why ask it
These are different services and both are legitimate. What you need is to know which one you are buying, because the steps that lower a bill generally have to be taken while the year is still open, and a preparer first sees it after it has shut. If planning is included, ask when in the year that conversation is held.
Do you help with decisions beyond the filings, such as a loan application, a large purchase or a new partner?
Why ask it
Some firms are built for compliance and say so, which is a fair thing to buy at a fair price. If you want a sounding board, ask who in the firm does that work and for a recent example with the details removed. Check too whether it is quoted as a separate project, so that a conversation about a lease does not arrive later as a surprise invoice.
Can you prepare the statements a bank or an investor would ask for, and at what level of assurance?
Why ask it
Lenders sometimes want more than accounts the firm has simply put together: a review or a full audit, each costing more, and in many places only a firm registered for that work may sign one. The names and the rules differ by country. If borrowing or selling is on your horizon, find out now whether this firm could sign what will be asked for, or whether a second firm would have to be brought in.
Do you run payroll and handle sales tax or VAT yourselves, or would I need another provider?
Why ask it
These are the filings with the most frequent deadlines, and so the ones most likely to slip between two providers. If the firm does them, ask whether the people on your account handle them or a separate department does. If it does not, ask who they work alongside and who is responsible for making the figures agree at year end.
If I sell or hire in another state or country, do you do those filings or refer them out?
Why ask it
A customer or an employee somewhere new can create registration and filing duties there, and the rules are different in every place. Firms cope in different ways: some have the skills in house, some belong to a network of independent firms, some hand you a name and step back. Ask which, and who stays responsible for seeing the whole picture.
Who do you refer clients to for the things you don't do, and are you paid for the referral?
Why ask it
Accountants routinely introduce lawyers, lenders, insurers and financial advisers, and a good introduction is worth having. Being paid for an introduction does not make it a bad one, but you should hear about the payment before you act on the name. Whether it has to be disclosed depends on the country and the professional body, so ask plainly.
Where does the firm stand when a tax position is arguable but not certain?
Why ask it
No answer here suits everyone, so look for a firm whose instinct matches your own appetite for risk. Listen for a method: they explain the range, put the weak points in writing and let you decide. Be wary at both ends, of the firm that claims nothing it could not prove twice over and of the one that says nobody ever checks.
Safeguards
If the tax authority opened an audit or enquiry into my return, could you represent me, and have you done it before?
Why ask it
In some countries only certain credentials carry the right to speak for a client before the tax authority, so ask which they hold and what the rule is in yours. People who have been through an enquiry describe the stages plainly, while those who have not tend to tell you how unlikely one is. Check as well whether that work sits inside the fee or is billed by the hour.
If a filing is late or wrong because of something at your end, who pays the penalty?
Why ask it
The tax authority will usually come to you for the money whoever made the mistake, so what a firm can offer is to pay you back afterwards. Ask what that covers, since the penalty, the interest and the cost of correcting the filing are often treated differently. Then find the same promise in the engagement letter.
Do you carry professional indemnity insurance, and at what level?
Why ask it
It goes by different names, professional liability or errors and omissions cover among them, and whether a firm must hold it depends on the country and the professional body. Judge the level against the size of mistake that could be made in your accounts, not against your fee. A firm that holds cover will tell you the figure without fuss.
Is the firm's work inspected by anyone outside it, and what came of the last inspection?
Why ask it
In many places a professional body or regulator reviews firms from time to time, under names such as peer review, practice monitoring or quality assurance. Which firms are covered varies, and a practice that only prepares tax returns may fall outside it, so ask what applies to them. Where a review exists, a firm that came through it well will say so readily.
Which of your staff can see my records, and what would you do if my data were exposed?
Why ask it
An accounting firm holds bank details, payroll records and identity numbers for every client it has, which makes it a target. Sensible answers mention access limited to your team, two-step logins, and a plan for telling clients quickly. Follow up by asking when a former employee's access is switched off, a detail people only know if the process exists.
If I moved to another firm later, which records would you hand over, and in what format?
Why ask it
Which papers count as yours and which as the firm's own working papers varies by country and professional body, so have them spell it out: ledgers, schedules, prior filings, software access. Raise it in the first meeting, while goodwill is high, and ask how long your logins stay open after notice is given.
If the firm were sold or the partner retired, what would happen to my account?
Why ask it
Small practices are often built around one or two people, and their plans are your continuity. A prepared answer names a successor or an arrangement with another practice. Notice too whether your engagement could be passed to a buyer without your say, which the engagement letter will usually cover.
Could you put me in touch with a couple of long-standing clients about my size?
Why ask it
A firm should not hand out client names without asking those clients first, so expect this to take a few days. Ask for clients of several years' standing, who will probably have seen a fee rise, a staff change and at least one mistake being handled. When you call, ask what they would change about the firm.
What do new clients most often forget to ask at this stage?
Why ask it
Leave this for the end and then stay quiet. People who have sat through many of these meetings know what gets missed, often something dull like who holds the login to the tax account. If nothing comes back at all, you have learned how much thought your situation got in the past hour.
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.
What to look for in the engagement letter
- The scope as a list: which returns, accounts, payroll runs and meetings are included, and for which entities and years.
- The fee, how it is billed, what counts as extra work and whether the firm must ask before starting it.
- Your own duties and dates. Records delivered after the cut-off are the usual reason a firm gives for a late filing.
- How long the agreement runs, how much notice either side gives, and what becomes of half-finished work and your logins once notice is served.
- Whether your work may be passed to contractors, to another office or to a buyer of the practice, and whether you are told first.
- Any limit on the firm's liability. If there is a cap, read it beside the insurance figure they gave you and ask about the gap.
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.