When hiring an accountant, especially if you’re not familiar with accounting, there are many factors to consider. You can choose to hire in-house or bring in an outside consultant, each with its own pros and cons. Regardless of the route you take, it’s crucial to ensure that the person you hire has both accounting experience and specific knowledge in not-for-profit accounting.
Understanding the skill level you need is also important. Sometimes, you may require the expertise of a controller or CFO-level individual, but on a day-to-day basis, a staff accountant might suffice. Hiring an in-house controller to handle everything might seem ideal, but they could quickly become bored with routine tasks. Alternatively, hiring a bookkeeper to save money may put them in over their head and ultimately cost you more money to fix their accounting or lose out on funding opportunities because you lack the sophisticated financial statements to apply for this funding. This is where outsourcing can be advantageous. By hiring a firm that provides staff accountants, senior accountants, controllers, and CFO all in one place, you get the necessary skills for the required hours. The staff accountants can manage daily tasks, while the controllers and CFO can assist with more complex issues like categorizing contributions, net asset roll-forwards, audit oversight, and investment classifications.
When considering an outside firm, ask about their NPO experience, the services they offer, the size and number of their clients, and request references.
Key Questions to Consider
No matter which route you choose, ensuring your accountant has the necessary skills is paramount. Here are some questions to ask:
- What education do they have?
- Are they a CPA?
- What work experience do they have?
- How in-depth is their accounting experience?
- What types of transactions and issues have they addressed, and how?
- What industries have they worked in, and for how long?
- What size companies have they worked for?
- Who trained them in accounting?
- Can they describe their day-to-day workload in detail?
- Will they be a good culture fit and support the goals of your organization?
- Ask if they have experience with net asset roll-forwards, functional expense allocations, revenue classifications, and budgeting.
- Ask specific questions about how the applicant would handle accounting situations specific to your organization. For example, give them a funding scenario and ask how they would classify the transaction to ensure it aligns with your organization’s reporting.
You can also give them an accounting quiz, which can be taken and graded online, to assess their knowledge. A trusted CPA advisor can help gauge the applicant’s accounting skills, though they may not comment on culture fit or other job qualifications.
If considering outsourcing, get multiple bids, but don’t always go with the cheapest option. Ask why they are priced the way they are. Larger organizations can expect to pay more for higher-level offerings and skills which could pay off in the long run. If you have additional questions or need assistance with your accounting needs, Tanner can help. For additional information call 801.532.7444 or click here to contact us. We look forward to speaking with you soon.