Negosentro.com | How To Choose a CPA for Your Business | Many people think of CPAs as simply the people who prepare their tax returns, however, CPAs offer many valuable services in addition to tax advice and preparation. Choosing the right CPA can be vital to the financial health of your business. Consider these factors when making your hiring decision.
Experience in Your Industry
Best practices can vary from one industry to another and though all CPAs should have a base level of general knowledge, a CPA who lacks experience with your specific industry may not be able to optimize your business’s financial procedures as well as one who does. The more familiar your CPA is with your industry, the better advice they will be able to give you about your business decisions.
Experience With Business Tax Preparation
Tax advice and preparation is one of the most important functions of a CPA. Businesses can have complex tax reporting requirements and you will want an accountant who has had experience working with the types of tax issues that your business may encounter. Your CPA can represent you with the IRS if you get audited, so you may wish to retain a CPA who has experience doing so.
Communication
You will need to check in with your CPA often, so you will want to find one who is available during the hours you need and who you feel comfortable communicating with. Your accountant will have access to a lot of information about you and your business, so it is important that you feel like you can be open and honest with whoever you choose. If you will be working with a firm, you will want to find out who will be your main point of contact and how and when you can contact them.
Fees
It is important to know not only how much your CPA charges for services, but how they determine the fees they charge. Some accountants may charge an hourly rate, while others may charge on a per-project basis and some may do a mixture of both, depending on the service being performed. Another option is to pay a retainer fee so that the CPA or firm will be available to you whenever you need them. Some firms offer monthly plans that may have different tiers that come with different services.
Valid PTIN
The IRS requires that all persons who prepare tax documents or give tax advice for compensation have a valid preparer tax identification number. PTINs can expire, so you will want to make sure that they have a valid PTIN for the year or years in which you intend to use their services. Your state board of accountancy should be able to verify that the accountant you are considering has a valid PTIN.
Location
Technology has made it easier to communicate with people over long distances, but it can still be valuable to have a CPA who you can meet with in person. For this reason, you may want to consider hiring a local CPA or CPA firm.
Firm Size
A smaller firm with fewer clients may be able to provide you more individualized services and may value your business more than a large firm with many clients. However, a larger firm may also have a wider pool of employees with expertise and experience in more areas to draw on. Which type is better for your business depends largely on the complexity of your operations and your personal preferences. If you prefer to work with the same person every time and it is important to you that you receive personal service, a small firm might be ideal. However, if it is more important to you that your accountant is available whenever you need them or you have larger projects that may require more manpower, a larger firm might be the better choice.
Education
All CPAs have to meet a minimum standard for both post-secondary education and continuing education to maintain their license, however, if you need an accountant with specialized knowledge, you may want to look for a CPA with an advanced degree. In addition to seeking a degree, such as an MBA with a tax emphasis, some CPAs may choose specialized areas to study as part of their continuing education credits.
CPA License
A person can be an accountant without being a licensed CPA. CPAs must pass a rigorous exam and meet ongoing continuing education requirements in order to maintain that license. It can be a good idea to verify that the accountant you are considering has a valid CPA license in your state.
Reputation
Once you have found a firm that meets all of your requirements, it can be a good idea to verify what type of reputation they have with past clients. Look for online reviews, reviews by industry experts and testimonials from past clients. Consider contacting past clients to see if they would be willing to share with you how satisfied they were with the services they received from the firm you are considering. Most businesses will get a few bad reviews, but a pattern of unsatisfied clients can be a red flag. You can find CPAs who meet high standards for transparency, integrity and consumer protection on The United CPA Association website.
There are many factors to consider when choosing the right CPA or firm for your business. A good reputation and valid current licenses are essential, while other factors will depend upon the nature of your business and your preferences.
