How to Find the Best Accounting Firm

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How to Find the Best Accounting Firm

As a Marketing Director with 10 years of experience in the accounting industry, I felt compelled to write this article because of the high volume of inquiries I receive from individuals, business owners and nonprofit executives looking for a new accountant, tax specialist or bookkeeper.

Believe me when I say there’s a wide range of accounting providers to choose from. Switching accountants can be a daunting task but it’s crucial to find the right one for your needs.

I hope my perspective helps you narrow down your search.

Let’s get started!

One Size Does NOT Fit All

The accounting industry is a complex one. In general, CPA’s (Chartered Professional Accountants in Canada) either work within “industry” (as an internal accountant, CFO or Controller for example) OR work in what we call “public” accounting.

In public accounting, accountants have many clients. A CPA in public accounting might be a sole practitioner working independently running their own practice OR they may join a more sizable firm with a greater range of services from income tax preparation to financial statements to audits and other advisory services.

A public accounting firm can be small, mid-sized, or large like the “Big Four” firms we’re familiar with (Deloitte, EY, PWC, and KPMG) The large firms have a significant focus on serving public companies and very large businesses, whereas small and mid-sized firms are an ideal solution for small to medium-sized owner-managed businesses and nonprofits.

Stern Cohen is a mid-sized accounting firm in Toronto Canada and we focus on the small to medium-sized business market, specializing in owner-managed and family businesses. We also have a strong not-for-profit niche practice.

What this means for you

If your needs are not complex and you only require a personal tax return, a sole practitioner CPA or a high volume, low cost provider like H&R Block or TurboTax is ideal for you.

If you’re a contractor or a small start-up business without employees, a generalist accountant focussing on small business might be the best option for you.

If your needs are more complex or numerous, you will be better served by a mid-sized firm with in-house tax and accounting specialists. A mid-sized firm can offer you both deeper support and a faster response time due to their ability to leverage staff. In many cases, mid-sized accounting firms like Stern Cohen also have in-house industry specialists as well as audit and assurance teams for more complex accounting services.

Timing is Key

Do you want to switch accountants or accounting firms? Here’s an important tip. Don’t search for a new accountant during tax season. In fact, the months of February through the end of June are now considered “busy season” for accountants in Canada. During this period you’ll probably have a rough time finding a new firm because many accountants have reduced capacity to take on new clients due to the many tax and reporting deadlines occurring at this time of year. The seasonality of the accounting and tax industry is a challenge.

How much are accounting services?

Quite often we receive calls from prospective clients asking for a fee estimate for accounting services. It’s not easy to estimate annual fees unless we have some background or supporting information. After all, would it surprise you to hear that accountants are detail-oriented? 🙂 As a result, a good accountant needs to carefully gauge the scope of services (deliverables, time and resources) before providing an estimate. An experienced accountant will want to see the following before committing to a fee quote.

Information Required for a Fee Quote

Businesses:

A PDF of the business’s most recent:
- annual financial statements (Compilation, Review or Audit)
- corporate tax return (T2)
- personal tax return (T1) of the business owners or shareholders
intel on any changes since these financial statements were issued OR anticipated changes
an idea of longer term goals and objectives
an understanding of the services required and why you are leaving your previous provider

Individuals:

a copy of your most recent personal tax return (T1)
intel on any life changes since your last tax return (like marriage, divorce, investments, purchases, new businesses, inheritance)
an idea of your longer term goals and objectives
an understanding of the services required and why you are leaving your previous provider

TIP: Beware of unsubstantiated quotes because at the end of the year you might very well end up with a higher bill than you expected! The best accounting firms are transparent about fees.

How Fees Work

In general, the larger the firm, the higher the fees due to service and industry specialization and the experience of the firm’s partners and senior team members.

Although senior resources at mid-sized to large firms are, naturally, more expensive, rest assured that partners leverage trained staff for compliance tasks and only get involved for the heavy lifting (complex tax, advisory and oversight). So while you will pay more for a Partner’s time, it includes an efficient and dedicated support team and the reassurance of having an advisor with strong expertise and significant experience. This will save you time and money in the long run!

When do you need to look for a new accounting firm?

If you’re working with a sole practitioner CPA and your business is hitting annual revenues approaching $1 million, then you have probably outgrown your accountant.
When your business is in rapid growth mode, and you anticipate increasing revenues, you will benefit from working with a mid-sized accounting firm (like Stern Cohen) that specializes in comprehensive services for owner-managed or privately-held businesses. In many cases, we are actually referred from sole practitioner accountants who realize that their customer requires more sophisticated expertise and resources.

TIP: Have you outgrown your accountant? If your business is growing rapidly, your sole practitioner CPA might recommend you move to a larger firm to ensure more complex services can be performed and tax planning opportunities are flagged and addressed at opportune times.

Get Proof for Client Service Claims

With so many accounting firms to choose from in Toronto and across Canada, how can you feel confident that you’re working with one of the top accounting firms? Being able to see a firm’s client ratings is greatly reassuring to those who are looking for a new accounting provider. Most businesses promise excellent service. Our annualized client survey is proof!

These stats from our 2023 annual client survey show just how well we stack up against the competition:

Stern Cohen received satisfaction scores of 9 or 10 out of 10 from over 78% of clients surveyed. That’s significantly higher than the industry’s current average of 45%.
Our Net Promoter® Score of 74%, is considered world class.

View our client’s ratings and testimonials publicly available on ClearlyRated.com – an online business directory that helps buyers of professional services find service leaders and vet prospective firms. Simply click on the widget below for a live feed of our results:

Conclusion

I hope this article was helpful. In addition, scroll down to look at my answers to some frequently asked questions on this topic.

Q & A

More tips for finding a new accounting firm.

How do you know it's a good accounting firm?

Read online reviews, ratings and testimonials. While searching don’t forget to look at Google business reviews or ClearlyRated. Many established firms, like Stern Cohen, feature a page of client reviews on their website. You can view our Testimonial page here.

Does location matter when choosing an accounting firm?

Geography doesn’t play that much of a role anymore. Modern accounting firms like Stern Cohen have adopted cloud accounting systems enabling remote work. While in-person meetings are available, we can speak with you over the phone or in a Zoom call, saving everyone the travel time. This frees you up to choose an accounting firm like Stern Cohen even if you’re outside of the Greater Toronto Area in Barrie, Collingwood, Hamilton, Sudbury, or even further afield. We have the tax and advisory services you need thanks to our experience in a mature, sophisticated market. We also specialize in helping international companies open Canadian subsidiaries. So now you can work with Stern Cohen even if you’re in Orillia or Tokyo!

Are you the right client for Stern Cohen (or another firm of your choice)?

It’s a two way relationship. Just like you expect the best from your accountant, your accountant has expectations of you, too.

In order for us to provide accurate and efficient services, we require:

business owner or finance team members’ availability during key service delivery times
timely responses to our requests for information

Increasingly, like any business, the accounting industry is choosing clients with the following attributes:

Cooperative: Firms are severing ties with difficult clients to ensure that valued staff have a positive work experience.
Specialty or Niche: Firms are zeroing in on client types they can provide the highest value to (based on industry or service expertise). As a result, firms are carefully screening prospective clients to ensure fit. It benefits the firm and the client.
Technology Friendly: Clients open to adopting best practices and efficient apps are highly desired. A shoebox of receipts takes too long to process so now we highly recommend apps allowing business owners to electronically capture and store receipts, invoices and other tax documentation.

Have accounting services changed over the years?

Yes, accounting has changed and continues to do so. In the past, accountants spent their time looking at what we call “lagging indicators” or where you’ve been in the past. For example, preparing your year-end financial statement or your annual tax return. Business owners have also changed. In today’s mature and sophisticated market, growing organizations need pro-active and real time advice for the present and the future. Stern Cohen FIT is focused on the transactions of today and pro-active advice for tomorrow. Our FIT clients have regular monthly or quarterly calls to discuss their KPIs (Key Performance Indicators). This sets business owners up for increased success and security. Accounting is also changing due to technology. See the next question for more info.

Do good accountants help with accounting technology?

The pandemic accelerated the adoption of cloud accounting systems and a good firm will assist with migration to modern accounting technologies like QuickBooks Online and other industry-leading apps like Wagepoint and Dext. If you have let your accounting technology infrastructure get obsolete, you’re taking a risk and missing out on efficiencies and improved reporting capabilities, too. Our clients regularly tell us how happy they are with their modern cloud accounting platforms.

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