Planning to work with an online accountant

by Tony Novak, CPA, MBA, MT     January 25, 2015

When I first moved my business to a completely paperless environment in the mid 1990s we had many questions. We didn't even know if some of the tools I used, like digital signatures, were even recognized as legal in all situations. Now even 20 years later the concept of online professional service is still not familiar to many. Regardless of whether you are using a remote bookkeeper, a CPA or some other accounting service, many of the considerations are the same. This article lists some of the issues to be considered.

#1 Establish rapport

First, make sure that that you feel comfortable with the relationship. This is always the first and most important consideration and the online component does not change the ranking. You want to know that you are communicating well and "on the same page". Pay attention to your gut feelings.

It turns out that some people simply don't have a good way to evaluate who they should trust and this could lead to disaster. I wrote about this in an article titled "

Even with all the technology, nothing is as good as a face to face meeting. Despite having worked for clients throughout the U.S., I go to extreme lengths to try to meet my clients face-to-face early in the relationship. I know that is not practical from a cost or time invested but I do it anyway. So I know that for most people, some other approach is necessary.

#2 Custody of funds

It is important to know the legal limits that you've conveyed (or plan to convey) to your  accountant. Have you given authorization for the accountant to speak to IRS, a creditor, your bank? Can the accountant sign checks, withdraw money or make investment trades? Having access to your money is called "custody". An accountant with custody is in a different category that one that works in an advisory capacity only.

There is no right or wrong answer with regard to the appropriate level of  authority, rather just that you are fully aware of the details.

#3 Online Security

Almost all accountants have a well-stated security policy. It is usually plainly posted online and in their communications. Your job is to scan for signs that the security might not be as stated.

#4 Transport

Transfer of information is a basic part of your relationship. I don't think there are any right or wrong answers here. Again, it is a matter of individual preference.

I have clients with diverse preferences on this issue. I simply make notes about each of their preferences and act accordingly. One client, for example, won't speak over the telephone for fear that he is being tapped (by commercial competitors, not a NSA issue). He uses email instead.

The most discussed issue is email. Is regular email safe for transporting your financial records or do you prefer a secure portal with encryption?

Younger clients tend to send all their financial records by text message. If they get a letter from IRS they simply snap a cell phone photo and text it to me.

The fastest growing communication platforms are those that combine document sharing with video conversation. Skype, Ringcentral, Google+, Facetime are all possibilities. Use whatever feels right.