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• Does he understand how to do a
leveraged buyout or finance internal
growth?
• Can he transfer control of your
business to your children?
• Does he know how to select a
new computer system or update an
existing system?
• Can he construct a personal
financial plan and plan your estate?
• Can he show you the best way
to price your products and services?
• Can he help you develop a
strategic plan?
8. What services do you render
other than the standard financial
report?
Your annual financial statements
should be the beginning, not the end,
of your accountant's work . Will the
candidate review your statements
with you? Will he point out trends,
weaknesses, opportunities, changing
ratios , and other points? Ask him to
describe what he does for other
clients. Then ask him to tell you what
he can do for you .
9. Why is your firm the right size
for us?
Two things are more important
than the size of an accounting firm .
One is whether the prospective firm
dedicates all or most of its professional
resources to serving closely held
businesses. (The more clients the firm
serves that are at or near your size,
particularly in your industry, the
better off you are. Get a sample client
list.) The second is whether the firm
can perform the services you need on
a timely basis.
Final-decision questions
10. Do you know how to help me
make money?
Now we 're getting down to the
nitty-gritty. The middle questions (five
through eight) should have gone a
long way toward answering this ques-
tion . But you at least should expect an
answer that analyzes your profitability
from your top line to your bottom line .
Can the accountant develop a system
or improve your present system to
analyze your income? Which products
or services produce the most income,
the least, or a loss? Are direct costs
being charged correctly? What costs
might be reduced without affecting
quality? How? Can receivables be cut
and inventories reduced? Does he
have legitimate tax ideas to cut the
IRS' share of your profits? An accoun-
tant who really knows how to save you
money will eat this question alive. Be
forewarned . A torrent of ideas may be
useless. You are looking for practical
money-saving ideas that will work for
you and your company.
If your business is subject to con-
stant change , your accountant should
have a computer able to build a finan -
cial model that reflects the impact on
profit for each likely change . This
allows you to play what -if games
necessary in a changing business
environment.
11. Is the fee structure reasonable
and clear?
Almost all accountants charge per
diem - by the hour. The higher the
staff level, the higher the rate, with the
top rate going to the partner or part -
ners who work on your job. Ask for a
schedule of hourly rates . Most firms
make an honest attempt to hold down
their fees by matching the staff level to
the task to produce the lowest overall
average rate, and by teaching you how
to do as much work as possible inter-
nally . Also, your year-end fees can be
reduced substantially if your account -
ing firm uses a microcomputer audit
package.
Get a written proposal. Your fee
should be the lower of the aggregate
time put in on your job or a predeter-
mined top figure . Each job or special
consulting engagement should be
quoted separately.
Remember , quality work costs
money. If you try to buy price alone,
YOO HOD!!
it's a good bet your new accountant
will turn into an expensive experience .
12. Where should the firm be
located?
If you do not have complex or
special accounting needs, you should
be able to find a local accountant. But
let's face it, the increasing complexities
of modern business have become an
everyday fact of life. It requires more
and more specialized talent in side
your operation and from your outside
professional advisors - particularly
accountants. The telephone , over-
night delivery, and the airplane make
an out -of-town accountant a viable
alternative. It is no longer a matter of
miles , but of minutes (by phone) or
hours (by plane) to talk to or meet with
your accountant. But again, you must
check it out. Get a list of the candi-
date's out ·of-town clients . Call them .
Find out if they are happy with their
service.
Now let's put it all together . Find-
ing an accounting firm that can give
you perfect answers to all of the ques-
tions posed here is not likely, but you
should get as close as possible.
This article is not theory, but is
based on the actual experiences of our
firm when being interviewed by poten-
tial new clients . Most accoun ti ng
firms, ours included, attempt to prac-
tice in such a way that potential clients
will hire them. Your job is to determine
that the firm you want to hire is in fact
what it says it is and appears to be .
In the final analysis, hiring an
accountant is a business decision .
Hire an accountant who will save you
the most money, but don't hire some -
one you will not enjoy work ing with .
Good hunting.
•
Irving L. Blac kman is a partne r in
Blackman, Kallick & Company, Ltd.,
with offices in Chicago and Houston.
The firm specializes in closely held
bus inesses. If you haue a quest ion,
call him at (312) 207-1040.
DON'T YOO HOD ME,
YOU YAHOO!!
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PLAY METER. December 1 . 1985