A brunette woman with a thoughtful look on her face, representing someone trying to choose the right accountant.

How To Choose A CPA That Really Understands Your Business

Wondering how to choose a CPA or tax professional? You’re not alone! Working with a CPA or tax preparers can help small businesses avoid mistakes and oversights in their accounting and bookkeeping. Misdated invoices or inaccurate financial statements might seem like minor kinks right now, but inaccurate financial statements lead to bad financial information and badly-informed decisions for your business.

The process of trying to choose the right professional is undoubtedly an important decision since poor financial management causes 82% of businesses to fail. But when you’re trying to find an accountant for your business, it can be overwhelming. Should you look at large firms or pick a mid-sized CPA firm to take care of your small business’ finances?

Questions To Ask Yourself Before Looking For CPA:

Old man deciding whether  he should hire an accountant or do his own accounting.
Old man deciding whether he should hire an accountant or do his own accounting.

Can I do this on my own?

This is one of the main questions you should ask when considering whether to hire a professional. Thanks to great software like QuickBooks, it’s quite easy to set up and manage your business’ financial records within a few dedicated hours.

Before you decide to hire a CPA, figure out the specific tasks that they’ll be handling for you. If you know that you’re not savvy during tax season, go ahead and hire a CPA.  If you simply don’t have the time to run your small business and make sure you’re on track with your financial growth goals, talk to certified public accountants in your area.

In summary, before you hire a CPA or tax professional, take time to ensure that you’re either:

  • Hiring them because you aren’t able to those tasks
  • Hiring them because you don’t feel comfortable doing those tasks

What services do I really need from a CPA?

Crossroads sign representing indecision about which accounting services are needed.
Crossroads sign representing indecision about which accounting services are needed.

After you’ve decided for sure that you are going to hire someone, you should do your best to narrow down the services you actually need help with from accounting or from tax professionals. This will help you avoid paying professionals like a tax preparer or certified public accountants for services you aren’t going to use regularly.

So, as you narrow down your list of services needed, consider these examples:

  • tax preparation services (typically offered by a certified public accountant or tax preparer)
  • tax credit and tax deduction analysis to help you maximize as many tax incentives as possible
  • bookkeeping to help you manage, organize, and maintain your company’s records

What level of service do I expect from my accountant?

This question isn’t asked often enough, but it’s vital to ask it beforehand. Although the gist of financial duties and tasks is pretty constant, approaches to accounting can vary from one firm to another. Whether you’re hiring someone to prepare and file returns or to assess and improve your financial preparedness, it’s best to hire a firm that matches your expected level of service.

Do you want your CPA to check in with you periodically, checking in with you as you both work toward achieving your company’s financial goals? Or, do you prefer to only have help during tax season? Understanding your service expectations before you hire a CPA will help you avoid a mismatched accountant relationship.

8 Questions To Ask Before Hiring A CPA

If you’ve decided that you absolutely need help, talk with each prospective CPA and ask the following 8 questions so you can choose the right accountant professional for your needs.

1. What services do you offer?

Woman talking with an accountant on the phone to determine what services they can offer her.
Woman talking with an accountant on the phone to determine what services they can offer her.

The best CPA firms provide a varied range of services. These may include traditional offers, such as bookkeeping and tax services, and more cutting-edge solutions that align with modern business needs. Offering a myriad of services lets certified public accountants provide comprehensive financial strategies based on sound taxes and accurate bookkeeping.

For example, a CFO service allows business owners to make smart financial decisions without incurring the cost of employing a full-time chief financial officer. As your business grows, outsourcing your services saves you time and improves the accuracy of your tax preparation and tax returns, your company’s other work, and allows for better business planning.

When narrowing down your options, learn as much as you can about the portfolio available. Good CPA firms will have one eye on today — handling your incomings and outgoings — while also thinking about your business’s financial future. 

2. How much experience do you have?

Experienced accountants working on a client's financial records.
Experienced accountants working on a client’s financial records.

Be wary of accounting firms who have little to no demonstrable experience with businesses like yours. If this sounds like your current accountant, it may be time to change accountants.

Ask about the firm’s background, the number of ongoing clients it has, and the team’s credentials. The more they understand about your sector, the better support they’ll be able to give. Also. be sure to ask about their continuing education policies; it’s a good idea to hire professionals who are dedicated to staying current with all tax law changes and requirements.

If you’re hiring a tax accountant to help with your tax return, check their preparer tax identification number to ensure it’s valid and legitimate. This will help you avoid handing your state or federal tax return to a dishonest tax accountant who has no experience or will cause audit troubles later down the road.

Also, learn to spot the signs of bad accountants, such as a lack of discretion when discussing other clients or suggesting dishonest practices. Knowing how to spot a red flag when looking for a certified tax accountant or CPA will help you avoid wasting time and money.

3. How will we communicate on a daily basis?

Most accountants choose to email their clients because it's easy and universally available.
Most accountants choose to email their clients because it’s easy and universally available.

Some CPA firms and tax firms are still catching up. They may be skeptical about cloud-based tools because of security issues, despite the high-end measures the best platforms use. This unnecessary suspicion makes collaboration inconvenient for modern businesses that depend on online communications daily. 

Most reliable firms leverage various communication solutions to interact with clients. 

For enrolled agents and tax professionals alike, make sure they send your tax documents through a secure portal – not email. Sharing sensitive information like your tax documents over email leaves you vulnerable to various cyberattacks by hackers and scammers.

4. How will you help my business prepare for the upcoming tax season?

Organized tax documents and financial records are vital to ensuring a smooth tax season
Organized tax documents and financial records are vital to ensuring a smooth tax season

Preparing and filing your taxes is rarely pleasant. But it becomes much, much more comfortable with a tax expert on your side.

A professional firm offering tax services will focus on accurate bookkeeping and necessary adjustments throughout the year to:

  • Take advantage of any deductions available
  • Lower taxable income with tax credits (if viable)
  • Help you to maintain regulatory compliance with the IRS

Leaving taxes to the last minute increases your risk of making mistakes, being audited, and even facing brutal penalties. Without help from a tax expert, you could miss out on opportunities to increase savings and end up paying more than you need to.

5. Can you help me improve my existing accounting system?

Person checking their bank account online as it syncs with their accounting software.
Person checking their bank account online as it syncs with their accounting software.

Your current bookkeeping software may make managing your finances more difficult than it should be. 

Working with a professional presents an opportunity for you to engage in strategic financial planning, maximize your productivity, outsource bookkeeping services to save money, and integrate the best software into your daily processes. 

6. How does your payment system work?

Businesswoman making online payment to her accountant.
Businesswoman making online payment to her accountant.

Will your accountant charge on an hourly basis? Will they send you an invoice at the end of the month? Or, do they have a subscription model in place?

Make sure you’re clear on payments before hiring an accountant. Understand what you’re paying for, how much it costs, and when you’re expected to pay. 

7. Who will handle my financial information?

Businesspeople and accountant greeting another with handshake.
Businesspeople and accountant greeting another with handshake.

The majority of business owners want to know who’s responsible for their accounting, bookkeeping, tax filing, etc. And that’s generally not an issue if you’re working with a small or solo, accountant team.

But firms employing numerous CPAs may appoint multiple experts to handle your finances. If that’s a problem for you, don’t be afraid to voice your concerns. The best firms are committed to total client satisfaction and will flex to align with your expectations. They’ll be happy to answer your questions and set your mind at ease. 

In any event, make sure that the professional handling your tax return is qualified to prepare your federal tax return and has experience in applying federal tax law.

8. What changes can I make to save money and improve my financial management?

Two paths in a forest, representing how accountants help clients choose the best path.
Two paths in a forest, representing how accountants help clients choose the best path.

Choosing the right CPA or tax preparer will make you more productive since they’ll often suggest ways to streamline your bookkeeping processes and free up time for other tasks. Your workforce may become more efficient, focused, and profitable as a result. 

Want to choose the right CPA?

Choosing the right accountant can alleviate much of the stress brought by managing your finances while reducing the risk of cash-flow problems throughout the fiscal year.

Whether this is your first time or if you’re changing accountants, learn as much as you can before you decide. A good team will always be happy to provide total peace of mind. 

To learn more about the benefits of working with experienced accountants, contact our team today.

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