Every business, regardless of size, needs a trusted advisor to help with the planning and achievement of financial goals. As strategic business consultants, Certified Public Accountants (CPAs) have the advanced training and experience necessary to advise on a variety of tax and accounting matters.
Among their other qualifications, CPAs must pass a rigorous state examination, and keep their knowledge up to date by completing a requisite number of continuing education hours each year. CPAs are a particularly valuable resource when your business is in startup mode. But working with a qualified CPA is a good idea any time for benefitting from operational improvements that could save your company money.
Why Your Business Needs More Than a Bookkeeper
Many small business owners are unclear where a bookkeeper’s role ends and an accountant’s kicks in. So let’s take a brief look at their professional responsibilities:
Bookkeepers perform organizational and data entry tasks that include recording the figures related to your company’s income and expenses. This input is often accomplished with the help of financial software.
Accountants review a bookkeeper’s record-keeping with the aim of preparing and analyzing financial reports, such as your company’s income statement and balance sheet. Accountants are financial and tax professionals who follow the very stringent rules outlined in Generally Accepted Accounting Principles (GAAP).
CPAs are accountants, but not all accountants are CPAs! Certified Public Accountants are the most qualified professionals when it comes to performing detailed and strategy-based analysis and forecasting around your company’s financial data.
While all financial experts will add value to your business, with their current knowledge of state and federal tax codes, sanctioned representation at IRS tax audits, and advanced financial expertise, CPAs are in a class by themselves.
What to Look for in a Certified Public Accountant
In many cases, the success of your venture will derive directly from the quality of professional advice you receive. Choosing the right CPA for your needs is critical, but some business owners are unsure where and how to begin their search. Here are some key considerations that should help get you started.
Industry Experience: Make sure the accountant you hire has other clients in the market you’re in. Many industries are unique in terms of the best ways to track and optimize inventory, costs, or company expenses. An experienced CPA will help you navigate these areas efficiently and profitably.
Firm Size: The larger the firm, the higher the fees and less personalized the service you can likely expect. At the same time, an accounting firm that’s too small may not have the expertise or range of services to meet the needs of your business.
Services Offered: Many CPA firms offer services ranging from bookkeeping and tax preparation, to financial planning and business consulting. If you need a company that performs audits or business valuations, make sure that’s part of your search criteria.
Availability: How easy will it be to get in touch with the individual in charge of your account when you have questions or need financial advice? You should also consider the professional qualifications of whoever will be assigned to assist you.
References: Choosing the right accountant is crucial when it comes to making the most of the business you’re in. Rather than settling for the first licensed CPA you stumble across, ask for and check out the client references they provide. Word-of-mouth recommendations from other business owners in your industry are a great place to start. And don’t forget that many accounting professionals will have been reviewed independently online.
Some pertinent questions you may want to ask current or former clients include:
- Does the CPA or accounting firm provide services, and respond to queries, in a timely manner?
- Do they keep their clients in the loop regarding tax law changes and other relevant business information?
- How modern is their infrastructure in terms of technology?
- What is their track record like when it comes to personnel turnover?
Industry knowledge aside, you should verify just how many years of experience your CPA has, and whether they’ll be personally handling your business concerns. Make an effort to interview and compare at least two accounting professionals, and don’t make the mistake of choosing one over another, based on pricing alone.
Remember, interviewing a prospective CPA is much like hiring a new employee. You’ll want to make sure you’re aligned as closely as possible – both professionally and personally – to maximize the success of your long-term relationship.
It’s not uncommon for many small business owners to supplement services received from their CPA of choice with those of other accounting professionals. In fact, you may wish to hire an outside bookkeeper, payroll company, or tax preparation service to help with some of your more routine financial tasks. Just be sure you have the right CPA lined up to review and sign off on the results of those tasks – one who’s capable of turning financial analysis into solid business advice.
Photo credit - Canva