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As businesses grow and change, it is necessary to re-evaluate your relationship with your Certified Public Accountant (CPA) from time-to-time and assess whether that CPA is the right match for your business.
If your business has grown significantly since you hired your CPA, now might be a good time to look at that relationship. Here are questions to ask yourself and your CPA to better judge whether you are well-served and tips on how to choose a CPA if you discover that it is time for a change.
- Research. Find out how many businesses your CPA firm works within your industry. Expertise in your industry indicates the depth of experience with the intricacies of your tax situation.
- Review Correspondence. Has your CPA firm reached out regularly to ensure accurate financials are being recorded throughout the year? Do they communicate in a way that works for your financial team?
- Do Some Digging. Check with the CA State Board of Accountancy to ensure your CPA doesn’t have outstanding complaints against them (do this when looking for a new CPA firm, as well).
- Assess Your Situation. Think about whether you need an Enrolled Agent (EA), a CPA or a tax lawyer. Determine what combination of support best serves you if your tax situation is complex.
Once you and your team have assessed your needs and current situation and if you decide it’s time to move on, here are some questions to ask potential CPA firms:
- How long have you been in business?
- What are your specialties?
- Will you do the work, or do you outsource tax preparation?
- What other services do you provide? Tax lawyers in-house, bookkeeping, financial guidance?
- How much do you charge and is it negotiable?
- How have you handled audits in the past?
Qualifications to Look for in a CPA
Understanding how to choose a CPA starts with understanding their credentialing. The primary qualification of a CPA would be a license from the state board of accountancy for the state in which you need services. This license serves as evidence that the CPA has completed the necessary educational requirements and passed the Uniform CPA Exam.
When choosing a CPA for professional services, it is important to be sure that the individual chosen is qualified and experienced. Other qualifications to look for include extensive experience in the areas of taxation, auditing and financial planning, as well as a commitment to professional ethics. It is also important to ensure that the CPA is up-to-date on any changes or updates in state or federal laws related to their area of expertise.
HOW DO YOU KNOW IF A CPA IS RIGHT FOR YOU?
Choosing the right CPA is crucial for your business’s success. Let’s take a look at some important factors that can help you determine how to pick a CPA:
Industry Expertise:
Make sure the CPA has experience in your specific line of business so they can give you good advice.
Proactive Communication:
Look for a CPA who keeps in touch, gives you information, and is there for you even after tax season is over.
Responsiveness:
An efficient CPA will get back to you quickly in response to your questions.
Up-to-Date Knowledge:
Make sure that the CPA keeps learning so that they are up to date on changes to tax laws and accounting standards.
Range of Services:
Check to see if the CPA offers a lot of different services, like financial planning and strategic advice.
References and Reviews:
Verify the CPA’s reviews and references to be sure they are reputable and offer top-notch services.
Professional Ethics:
It is important to ensure that the CPA maintains a strong commitment to ethical standards and has a clean disciplinary record.
Personal Compatibility:
Check to see if working with the CPA makes you feel at ease and if the way they talk to you fits your needs.
Who Needs a CPA?
Businesses of all sizes need CPAs to manage their financial operations, from the large corporate entity to the small start-up. CPAs are also needed for special business deals such as mergers and acquisitions, international transactions, and tax planning. Given their vast knowledge in the areas of taxation, auditing and financial planning, finding a CPA that is a good fit for your organization will ultimately provide invaluable guidance for business leaders looking to set a sound financial strategy for the company.
THE IMPORTANCE OF REGULAR CPA EVALUATION
It’s important to keep an eye on your relationship with your CPA as your business changes and grows. This process makes sure that your CPA stays the best fit for your changing needs and that you get the best financial help.
Why Regular Evaluation is Necessary
Regularly evaluating your CPA is critical for several reasons.
Adapting to Business Growth:
Your company’s finances become more complex as it expands. Regular evaluations of your CPA are necessary to ensure that they have the knowledge and assets necessary to fulfill your expanding requirements.
Ensuring Compliance:
Accounting rules and tax legislation are under ongoing change. Frequent contact with your CPA guarantees they remain current and your company stays compliant, preventing expensive fines and legal problems.
Maximizing Financial Efficiency:
Optimize your finances by constantly evaluating your CPA. You can expect your CPA to be proactive in finding methods to streamline your financial operations, cut expenses, and boost profits.
Building a Strong Partnership:
Regular reviews help people talk to each other freely, set clear goals, and strengthen working relationships by making sure that everyone is on the same page with their plans and goals.
Can I Do My Own Accounting for My Business?
One of the most important decisions business owners have to make is whether or not to handle their own accounting and financial activities. While there are certain tasks that should always be handled in-house, such as reconciling accounts payable and receivable, preparing monthly financial statements and compiling tax returns, other activities can often be outsourced.
Bookkeeping, payroll processing, and even tax planning can all be outsourced to a professional accounting firm, freeing up time and resources for the business. It is important to understand the benefits of using outsourced accountants before making a hiring decision, as cost savings should not be the only factor considered when choosing whether or not to outsource certain activities. Ultimately, when considering how to find the right CPA for your company, focus on finding an experienced professional who can ensure accurate and timely accounting records while freeing up time for the business to focus on other areas.
How a CPA Can Help Your Small Business
A CPA can be a valuable asset to any small business. They provide guidance and advice on managing finances, creating financial strategies, and setting up accounting systems to ensure accuracy. CPAs also make sure taxes are filed correctly, help businesses develop budgets and track net cash flow, prepare payrolls and assist with personnel management, and offer advice on structuring loans and other debt. When thinking about how to choose a CPA for small business needs, recognize that CPAs are in a unique position to also give guidance about cash flow planning, pricing strategies, and all types of tactical decisions with financial implications.
How to Get the Most Value from a CPA’s Services
Start by understanding your unique financial situation and goals and then look for ways that a CPA can help you achieve those objectives. Learning how to find a good CPA will ensure that who you employ will be able to provide comprehensive financial advice. Take full advantage of their skills. For those that don’t want to manage the entire accounting process in-house, outsourcing services to a CPA can be a great way to maximize efficiency while minimizing costs.
SIGNS IT’S TIME TO REEVALUATE YOUR CPA RELATIONSHIP
Even though regular reviews are important, there are some signs that it might be time for a more in-depth review of your relationship with your CPA:
Lack of Proactive Communication:
If your CPA only gets in touch with you when there’s an issue or during tax season, it might be time to find someone who offers continuous guidance and assistance all year long.
Missed Deadlines and Errors:
Significant red flags include inconsistencies in your financial accounts, missed deadlines, and frequent mistakes. These problems could undermine the credibility and financial stability of your company.
Inadequate Industry Expertise:
If your CPA doesn’t have much experience or knowledge in your industry, they might not fully understand the problems and chances your business faces. This gap can make it harder for them to give good help that is relevant.
Stagnant Growth in Services:
As the needs of your business change, your CPA should be able to offer you new services and information to meet those needs. If your CPA’s services haven’t changed as your business has grown, it might be time to look into other choices.
Poor Responsiveness:
A CPA needs to be easily accessible to answer your queries and concerns. They might not consider your company to be a top priority if they are constantly difficult to get in touch with or slow to reply.
IS A CPA WORTH IT FOR A SMALL BUSINESS?
Yes. The comprehensive financial analysis, ability to assess the business’s risk exposure, and help set pricing strategies, is invaluable strategic advice for growth or restructuring. It is too easy for small businesses to fall prey to the skills their team lacks. A CPA evaluation of a business’s financial operations ensures that the business will have the peace of mind it needs that its finances are taken care of and in compliance with laws. Understanding how to pick a cpa will lead to your business becoming more efficient and profitable.
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
This post contains trusted sources. All references are hyperlinked at the end of the article to take readers directly to the source.
Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
