Hiring an outsourced accountant is a great way to save money, automate operations and get access to a plethora of experience.
If you are unfamiliar with the world plethora, please take a moment to watch the video below.
I have a secret for you though. Are you ready? Here it is – Not all accountants are good guys. When you find an accountant you can trust, that relationship will become a cornerstone to your company's success. Getting there though takes some doing.
That’s why mankind has invented the word Embezzlement. The term has been around since the early 15th century and comes from the Anglo-French word embesiler which means “to steal, or cause to disappear”.
You don’t have the time to do all of your own accounting, at least not if your business is growing the way it should be. So you have a problem: you need to be able to trust an accountant, but how do you find someone that fits the bill?
It’s a great question. I’m going to give you 5 qualifications that your accountant must meet before you can trust him or her. If this person doesn't meet the merits listed below, move on to greener pastures.
#1 - Do They Lack of Experience as an Outsourced Accountant?
A lot of accountants are getting into the outsourced accounting scene and will tell you that they have 20 to 30 years of accounting experience. That’s great, but they may not have experience in outsourced accounting. They likely don’t have what it takes to manage paper flow, the software systems, communication, and all of the other elements that come into play when they’re not working in your office full-time. This accountant needs to be able to function outside of your company. If he or she has never done that, then they'll likely cause traffic jams in your operations.
It's pretty common for an outsourced accountant to try and do ALL the accounting work for you, and I understand why. It’s very convenient for the entrepreneur to hand over all the boring financial work and get back to business.
Let me run a scenario by you.
What if you gave your outsourced accountant the ability to create vendors, enter bills into the accounting software, issue checks against those bills, and even sign and mail those checks for you? Do you see any issues with that? You should.
This kind of poor accounting process makes it possible for your accountant to steal from you. All he has to do is create an LLC, write small checks to that entity, and sign them on your behalf. It sounds like this would be easy to catch as the business owner, but did you know that's how most embezzlement happens?
You need an outsourced accountant that segregates accounting duties between his staff and your staff so that there are checks and balances in place. For example, at Ignite Spot, we don’t sign checks for our clients. We can get everything ready up to check signing, but then the client needs to take some time each week to go over the checks and sign them before they go out.
It’s a simple fix, but most accountants don’t do it. Tisk tisk.
#3 - Do They Have Insurance?
An outsourced accountant isn't regulated the same way a CPA firm is. As such, many of them don't carry insurance in order to keep overhead low. What are you going to do if something goes wrong? If for some dire reason you had to take legal action to recover your losses, you’re going to be in a world of hurt if your accountant doesn't have an errors and emissions policy.
#4 - Do Their Customers Only Exist on Paper?
People like to make themselves look better. Unfortunately, many customers believe what they read on the internet and so when they see written testimonials, they take them as solid evidence of the accountant’s success.
Wouldn't it be easy to cut and paste some pictures of fake customers, create a few testimonials and then post them on a website? Of course it would be.
Is your outsourced accountant certified in anything? You'd be surprised at how many outsourced accountants have little to no experience. Do you really want to trust that kind of person with your finances? After all, it’s only your livelihood were talking about here.
Your outsourced accounting company should have qualifications that prove their experience level. For example, at Ignite Spot, we have a staff of internal CPA’s to oversee the work that goes out as well as QuickBooks Pro Advisers to make the most of the clients accounting software.
What Happens When You Have a Dishonest Accountant?
A dishonest accountant can bring an entire company down. See for yourself!
I would love to hear from you. What are some of the qualifications you want to see in your accountant before you feel like you can trust him or her? Also, if you’re in a shaky accounting relationship right now, feel free to fill out the form below to learn more about Ignite Spot and how we meet the above qualifications for over 500 companies nationwide.