How To Choose A CPA

Sure, some small business owners in the U.S. prepare their own taxes, but many entrepreneurs wouldn’t even consider handling this aspect of their operations.

If your business is looking to hire a tax accountant this season, there are several things to keep in mind.

First, understand that some firms are accepting new tax clients for 2016, while others are not. If your business hasn’t had an accountant before or in several years, be prepared to contact several firms and perhaps ask the accountant to file an extension request with the IRS for 2015 taxes. Of course, the IRS doesn’t require a Certified Public Accountant (CPA) or even an accountant to prepare a business’s taxes. There are other professional tax preparers available, and the IRS provides a guide to choosing a tax professional on its website.

Keep in mind, however, that hiring an accountant or CPA to do your taxes could lead to business growth opportunities you may have never considered – if you hire well. And that leads to the second consideration for businesses looking to hire a tax accountant: Determine, up front, what other questions you have about your business that a trusted financial advisor might be able to answer.

-Would you like help improving your cash flow?

-Do you want guidance applying for a loan?

-Is financial planning related to your business or your estate important?

-Are you thinking of exiting the business – either by selling to employees or outsiders or by passing it on to family?


Identifying these questions is important because many accounting firms provide business planning advice, consulting on financing and retirement planning, and valuation services to help owners get out what they expect upon exiting the business. In fact, providing these so-called advisory services has been a major push by accounting firms that anticipate continued downward pressure on the prices they charge for traditional compliance-related services, such as tax and financial statement preparation and audits.

Brian Hamilton, chairman of Sageworks, a financial information company, is a longtime advocate of business owners taking advantage of the financial information accountants can provide to help run businesses better.

“Financial statement information is massively underused by both accountants and the clients they serve,” he said. “I recommend that business owners sit down with their accountants at least once a year for a 30-minute financial checkup. Through simply sitting down and reviewing their financial statements with their accountant, business owners can develop a good framework for future decisions.”


Once you’ve identified your priorities (in addition to tax preparation) for using a CPA or accountant, look for a firm that can provide those services. Check firms’ websites, including partner profiles, for services offered, industries served and any information for potential clients. Ask peers and other advisors you trust for recommendations of accountants who prepare taxes and who also offer any other services you want. The American Institute of CPAs (AICPA) and the National Society of Accountants also have links to directories and state accounting associations.

Here are a few question to ask when you meet with a prospective CPA:

What degrees, professional certifications or training do you have in accounting? Other areas?Not all accountants are CPAs, and not all CPAs perform services you may want in the future. For example, some financial services require licensing.

What experience do you have working with businesses in my industry? Of my size? Some accountants can provide industry comparisons to your financials or may have useful professional contacts in your industry, while others serve a variety of industries within a certain geographic region.

Who will be my main point of contact and how quickly should I expect them to respond?Accounting firms can range from one-person shops to organizations with thousands of employees, and if you are going to be working with a junior staffer rather than the partner, you probably want to know that up front.

How do you set fees? Is it hourly, by project, or do you require a retainer for advisory services? Some firms provide different levels of monthly fees to match the client services provided. For example, a basic fee would cover providing financial statements or tax prep only, while a top-level fee might include anytime access to more extensive services such as business planning, financing guidance, etc.


Sageworks Chairman Hamilton said business owners may think only of taxes when they think of their accountant, but that can be a big mistake. “Business owners are sharp people,” he said. 

“After all, they run businesses. But many of them are so busy running the business that they don’t have time to sit down and analyze their financial data. Tax time is a great time to start thinking about how to use your financial information to make better decisions about your business.”

Source: http://www.forbes.com/

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.