Working in the IT industry means constant evolution and fast-paced changes so the ClienTax team understands why you are looking for assistance with your IT business accounting.

It’s important to have the proper tools and advice to successfully manage your tax planning, cash flow and profit improvement so here are 8 questions to ask an accountant during the interview process. 

Question 1: Do they serve other clients in the IT industry? 

We recommend this as an opening question because it is important to hire someone who has prerequisite knowledge of the IT industry. A ‘general’ accountant might not be able to save you the time or money required to grow if they don’t understand the key areas of your IT business.

Question 2: Do they have experience representing clients with the IRS?

No one wants to have issues with the IRS but in the event issues arise, it’s important to have an accountant there to assist you. Learn about any past encounters they’ve had with the IRS, the reasons behind them and how they could support you, if needed.

Question 3: What type of entity suits your company best?

Many IT companies start as S-corp or LLC to enjoy the benefit of credits, tax losses and avoid double taxation. Over time, some find it better to shift to C-corp status. An expert in IT business accounting should be able to give you a detailed consultation to understand what’s best for your company. 

Question 4: What tax benefits are you eligible for?

There are various tax benefits for the IT industry such as credits for job creation and training. 

When considering tax deductions and benefits, you need to be careful. Your accountant can help you decide which ones to take advantage of and how to claim them.

Question 5: What are your limitations in case of debt and equity?

Fast expanding companies in the IT sector often have different types of debt such as convertible debt, senior debt etc. As they have various founders and partnerships, it can get confusing. The amounts related to debt, except the principal amount to be repaid, is tax deductible. 

In the case of equity, the rules vary for all the different types. The costs associated with raising equity are non-deductible. High debt is very common in this industry but be sure you get to know your limitations from your accountant.

Question 6: What are the key services they can offer you in your field of business?

There are certain services which are unique to the IT industry. Get an overview of them from your accountant. They should include:

• Choosing between cash and accrual method of accounting

• Percentage of completion method

• Monitoring job costs and allocating indirect costs

• Classifying as large or small contractor

• Business & Risk Insurances

• Accounting software for payroll, invoicing, etc.

• Wealth creation strategies including retirement and transfer of Capital Gains

• Industry risk profiling

• Managing the Key Performance Indicators (KPI)

• Advice on sale, purchase, mergers & acquisitions etc.

Question 7: Can you help us do business in multiple states and foreign countries?

In many cases IT companies have locations throughout the US and the world. If this applies to your IT company, it is important to work with an IT business accounting professional well versed in the multi tax system. There can be very detailed laws governing these issues.

Question 8: What software do they use to compute data and perform financial analysis?

Thanks to IT professionals like you, newer accounting software can perform a detailed compilation of all the accounting data and provide additional information to do a detailed analysis of the business.  Make sure the IT business accounting professional you are working with has the best in tech to support you and your IT business.

ClienTax specializes in accounting for IT companies 

Our team understands the IT industry which can mean the difference between just surviving and potentially thriving. Over the years, our team has assisted dozens of IT professionals through various stages of their business life cycle – from start up right through to sale. We would love to offer you our experience, technical tax knowledge and most importantly, an accurate and personalized service that comes from our intimate understanding of your industry.