“Choose a partner who truly understands the MSP ecosystem, your PSA, the recurring revenue model, and service structure.”
- Matthew Zaroff, Financials360
Not all accountants understand MSPs and the wrong one can leave you flying blind.
You already know that clean bookkeeping is necessary. But once your books are accurate and reconciled, the next step is finding an accountant who can translate that data into actionable decisions.
This is where too many MSPs make the wrong hire.
A generalist CPA may be great at tax season, but if they don’t understand recurring revenue models, PSA integrations, or client profitability, you’ll end up with reports that don’t reflect reality and be given recommendations that don’t actually lead to growth or success.
The wrong hire at any level is risky. But it’s even more important when hiring a role positioned to give you advice on how to run the rest of your business. The wrong advice can turn into expensive decisions that jeopardize the long-term stability of your MSP.
That’s why this article covers five traits MSPs should prioritize when choosing an accountant… plus a few red flags to watch for.
Before diving in, it’s worth clarifying roles:
This distinction is key. You can hire the right person at the wrong stage. And for most MSPs, that means skipping ahead to an accountant too early.
If you need a deeper explanation of the difference between these two, check out our blog, MSP Accounting vs. Bookkeeping: What's the Difference?
Minimally, your accountant should have the basics down cold. That means working knowledge of GAAP (Generally Accepted Accounting Principles) and how they apply to your business. Without this grounding, it’s easy for financial statements to be misclassified, incomplete, or just wrong.
Proper revenue recognition is especially important in service-based businesses like MSPs where recurring contracts overlap with project revenue. Misstating when revenue is earned versus when cash is collected can inflate results and give leadership a false sense of profitability. This is also why cash vs. accrual accounting matters so much. Under cash accounting, revenue only shows up when it hits the bank, which can make a growing MSP look less profitable than it really is. Accrual accounting, by contrast, records revenue when it’s earned and expenses when they’re incurred, giving you a truer picture of margins and service-line performance. Want a clear explanation of cash vs. accrual in an MSP context? Check out our webinar with Visionary360 where we walk through both approaches on a P&L.
Poor financial reporting and weak internal controls are among the top contributors to small business financial mismanagement. Even when fraud isn’t at play, inaccurate reporting makes it harder to raise capital or prepare for an exit. Banks and investors rely on GAAP-based statements for apples-to-apples comparisons; without them, your MSP will face extra scrutiny or rejection.
For MSPs, this knowledge of basics is non-negotiable.
On top of the basics, though, the right accountant will already have MSP-facing experience. A general CPA may be excel in managing retail businesses or restaurants but miss the nuances that make MSPs different:
Without MSP-specific knowledge, accountants often miss how these pieces interact. The biggest risk facing MSPs in hiring the wrong accountant is the gap between your PSA and your accounting system. If time entries, expenses, or invoicing don’t flow cleanly from your PSA into the books, you end up with double entry, reconciliation headaches, and reporting delays. That's why knowledge specifically of ConnectWise, Autotask, Halo, or SuperOps is so crucial.
For example, treating SaaS resale as revenue instead of COGS can distort your margins. Or failing to recognize how labor allocation works between recurring and project-based work can make service lines look profitable when they’re not. These aren’t small oversights, they directly impact whether leadership can make informed decisions. This is something we discussed in our P&L Webinars with Visionary360:
That’s why industry familiarity is central to the right financial partner. An accountant who has worked with other MSPs will already know the questions to ask and the traps to avoid, saving you from months of rework.
Make sure to ask who you’re interviewing if they have worked with other MSPs and if they have any references.
If they haven’t yet, that may not be an automatic no but ensure they are willing to learn your language and your tools because without them they may make assumptions on reports that will be totally inaccurate.
An effective accountant should help you improve the way your financial engine runs. That means setting up your chart of accounts (COA) so you can instantly see which services are profitable, making sure your PSA talks cleanly to your accounting software, and putting repeatable processes in place for how every transaction is recorded and reconciled.
This process mindset pays off. A Gartner survey in 2023 found that one-third of accountants make several financial errors per week, largely due to strain and poorly defined processes. For an MSP, that translates directly into fewer hours lost to manual cleanups, clearer visibility into margins, and more accurate forecasts.
Without these systems, your accountant may be spending too much time in reactive cleanup mode. But a process-driven accountant flips the script. They build the structures that prevent errors before they happen, creating a foundation that scales smoothly as you add clients and technicians.
In short, a process-oriented accountant adds leverage to your business by ensuring that your financial systems are reliable, repeatable, and built to support growth.
When interviewing, don’t just ask about their technical skills, ask the prospect to walk you through how they’ve improved a finance process in the past. For example: “Can you tell me about a time you automated or streamlined a recurring accounting workflow?” Their answer will show whether they think reactively, or proactively like a process-builder.
Good accounting is all about looking forward. The right accountant helps you answer critical questions like: Can I afford to hire another technician next quarter? Should I renegotiate client payment terms? How much buffer do I need to withstand churn? When will I be ready to sell?
This isn’t tax prep; it’s scenario planning. Cash flow modeling allows you to anticipate risks, stress-test decisions, and plan confidently instead of guessing. The stakes are high: according to SCORE, 82% of small businesses fail due to cash flow issues. MSPs are particularly vulnerable given recurring billing cycles layered with unpredictable project or break-fix revenue.
An accountant with forecasting expertise won’t just prepare last year’s numbers and give your leadership team a nice talk. They’ll actively help you to see around corners, making sure your business can withstand whatever comes next.
For example, they might run a scenario showing that taking on five new low-margin contracts in Q3 could temporarily push AR past 90 days, creating a crunch on cash flow that would prevent hiring the new technician that’s needed. With this insight, you could renegotiate payment terms, stagger onboarding, or adjust your staffing plans, avoiding a crisis before it ever hits.
Finally, don’t underestimate fit. Your accountant isn’t just a vendor, they’re a partner you’ll rely on for some of the most sensitive parts of your business. They need to align with your team’s values, your communication style, and your expectations around transparency.
Equally important is their ability to make the numbers usable. In a recent PwC survey, 57% of executives said they miss opportunities because they lack timely, actionable insight, often because their finance teams lack transparency or default to technical jargon. The right accountant speaks plainly and goes the extra mile. They won’t simply hand you a report, they will sit down with you, explain the numbers in clear language, and connect the dots to real business choices.
For an MSP, that could mean walking through why gross margins dipped last quarter, not just showing the variance on a P&L. It means framing metrics like AR-aging or project margins simply, so your leadership team knows exactly what to do.
When an accountant can bridge that gap between the technical and the practical, they turn finance into a strategic advantage. That’s when accounting becomes actionable. Ultimately, the right accountant empowers you as the owner:
When interviewing potential accountants, the wrong fit often reveals themselves early. Watch for these signals:
If you’re curious about other red flags, want to know how to find the right accountant, or need some recommendations for financial experts who specialize in MSP advising, check out our guide Hiring the Right Accountant for your MSP.
Think of the right accountant for your MSP as a mix of strategist, translator, and early-warning system. They don’t just post transactions, they read between the lines of your financial data and interpret them for you. They notice when a client contract is draining resources, when recurring revenue and project work aren’t lining up with your margins, and when cash flow might hit a crunch before you even see it coming.
They’re proactive, asking the right questions before you realize you need answers. They shouldn’t be just balancing your books and handing over reports, they pursue the issue and can explain the complexities your MSP faces in plain language.
In short, this accountant is a partner, not a vendor. They turn numbers into decisions, structure into clarity, and bookkeeping into a growth engine. When you find someone like this, accounting stops being overhead and starts being one of the most powerful tools for your MSP.
Not sure where to find the right person? Download our MSP Accountant Hiring Guide for vetted MSP-focused accountants!
