If you are like most eCommerce businesses, you’ve probably worked with the same accountant since the very beginning. They may even be a family friend.
However, if you only talk to your accountant once a year at tax time or you’ve been questioning the value for the price you pay. It might be time for a change.
The thought of finding a new accountant that you trust, getting them up-to-speed on your business, and then actually managing the transition is overwhelming.
If you are not sure where to start, this post is for you. We’ll outline everything you need to know when switching accountants.
How often should you change accounting firms?
There is no set rule for how often you change accountants. Some eCommerce businesses work with the same CPA for a decade. Others switch every couple of years.
While there are certainly advantages to working with your accountant over a long period of time since they can get a deeper understanding of your business. But, if you experience any of these warning signs, it might be time to try something new and get a fresh pair of eyes on your business’s finances.
Red flags to look out for
- Generalists – They take on any client regardless of industry or type of business. They are generalists rather than specializing in an industry. This makes it almost impossible to provide industry-specific advice to you.
- Below market rates – While there are many times where it is great to bargain-hunt, there are two areas where this strategy rarely works in your favor – your health and your finances. If your accountant is quoting you a rate that seems “too good to be true,” that’s because it likely is. This means that your business will either be a “guinea pig” since the firm is brand new, or there is a higher chance of negligence since they have to work with so many clients just to keep the lights on.
- No contingency plans – Does your accounting firm have backup plans in place? Both for when their firm grows or when accountants in their firm go on vacation or find a new job.
- Old website – If the accounting firm’s website looks like it was created in the late 1990s / early 2000s, this could signal they aren’t tech-savvy. This means they might be using old-school accounting practices and outdated technology when working with you.
- Poor response times – Does it take them days – or weeks – to get back to you every time you have a question? Or, months to take care of your accounts.
- Not proactive – If you are only talking to your accountant at tax time, you are working with an overly reactive accountant.
How do I change my accountant?
The thought of changing accountants might be overwhelming. However, if you found yourself nodding your head to any of the above red flags, then it might be time for a change. Here are some steps you can take to eliminate the overwhelm.
Hiring a new accountant
The first step is to look for accounting firms with experience working with eCommerce businesses and, ideally, the type of eCommerce business that you run (Ex: DTC, dropship, FBA, wholesale, etc).
Accountants with eCommerce experience have deep industry knowledge and have likely seen many of the problems you’ve experienced or are experiencing right now since they’ve worked with dozens – if not hundreds of similar businesses.
In addition to having eCommerce expertise, here are a few additional criteria to look for:
- Good response times – If they take 5 days to get back to you during the sales process, this doesn’t bode well for their response times with clients.
- Services offered – Are they just offering tax filing, or do they offer a range of services, including financial strategy, business structures, tax planning, vCFO services, etc.?
- Fee structure – How do they bill clients? Is it a flat fee, monthly subscription, value-based pricing, or something else?
Once you find a few specialized accounting firms, set up calls with all of them. Do your due diligence during the interview process, ask lots of questions, learn about their processes, and don’t just hire the first one that seems like a good fit.
Key questions to ask when vetting new accountants
Here are some examples of interview questions to help you vet your new accountant.
- What systems and processes do they have in place?
- Do they have contingency and backup plans?
- How does the accountant run their own business? Response times? Team size?
- What cloud accounting software do they use? And, will you need to migrate from one system to another? If so, will they help with this transition?
- Who owns the cloud accounting software subscription?
- What are their communication preferences? (Ex: Zoom, phone, in-person, etc?) Do they align with yours?
- Does their personality and work style match yours?
What’s their pricing structure?
- What services are included in the pricing fee they quote you?
- Are they certified and registered?
- What professional associations do they belong to?
- How much experience do they have working with other clients that are similar to yours?
- What proactive strategies are they implementing with clients?
- What measures do they have in place to protect your confidential data?
- What’s their client onboarding process look like?
Breaking up with your former CPA
Once you hire your new accountant, it is time to let your former accounting firm know that you are moving one. While it might be awkward, it is common courtesy in the industry.
At the same time, you’ll also want to make sure that your former accountant transfers all of your financial and tax records over to your new accounting firm.
What can you do to make the process of switching accountants easier?
Here is an additional tip to make the transition from one accountant to the next easier.
1. Do a test project
Before you make any longer-term commitments, it is a great idea to work with your client on an initial small project first. This helps you see if you like working together.
For example, you might have them do a roadmapping session or build out a cash flow forecast.
Working with Bean Ninjas
If you are looking for a new eCommerce accounting firm, we can help. At Bean Ninjas, we specialize in working with 7-figure eCommerce businesses. Many of them make sales in multiple currencies, sell on multiple third-party marketplaces in addition to their own eCommerce store, and work with employees and contractors all over the world. Schedule a free call today.