A large portion of baby boomers are business owners because the scarcity of jobs when they entered the workforce drove them to create their own jobs and become...
Three Simple Things to Look for when Hiring a CPA
Certified Public Accountants come in many forms. Some focus purely on doing taxes at the end of the year while others prepare financial statements, manage payroll, assist owners in preparing their businesses for sale, assist prospective buyers in obtaining loans to buy businesses, and much more. Additionally, there are CPA firms that have become a one-stop-shop for all of your financial needs. Regardless of the situation, there are three things you can do to make sure you are finding the best CPA for your business.
1. Communication Skills
This may seem obvious, but let’s delve into what it actually means. This goes beyond whether you can get through to your CPA when you try to call him or her, although this is an important first step. When you do talk, do you understand what he or she is saying? Many CPAs use jargon when speaking to clients, which may sound impressive but does not help them understand what is going on with their finances. Find a CPA that can explain things to you in layman terms.
2. Ask for References
This is KEY to finding the right CPA for your business. Many business owners believe that just because a person has the title “Certified Public Accountant” that they are automatically trustworthy and a good fit for any business. Think about it, you are hiring this person to see some of the most sensitive financial information you have. Obtaining a reference is a small step you can take to ensure the CPA you hire is credible. Ask him or her for three to four names and phone numbers of former clients: some individuals, some businesses in your industry, and some businesses in other industries. Call them and ask a few basic questions, such as:
- How often does the CPA meet with you - or is everything done through his or her staff?
- How technologically competent is the CPA?
- Is the CPA well-known in the community?
- What are the CPA’s strengths and weaknesses?
See what these people have to say. Sure, you can just ask the CPA, but he or she has a service to sell and wants to attract new clients. Take the time to find out who this person is before you hand over the lifeline of your business.
3. Meeting on Regular Basis
Many business owners are reluctant to call their CPA with simple questions throughout the year because they believe it will cost them too much money to get advice. However, many CPAs will not charge for quick phone calls and simple questions. When searching for the right CPA, ask how they handle questions that come up throughout the year. If you already have someone, call and find out whether they charge for quick phone calls or emails. Finding this out will allow you to maximize the use of your resources. Your CPA should be more than just the person who does your taxes. Here is a great example: if you have a business that is expanding and you would like to purchase a vehicle for it, should you personally buy or lease the vehicle? Should the company buy or lease it? Should you buy it and lease it to the company? Your CPA can help you decide which option is best for your business now, rather than just advising on whether you can get a tax deduction at the end of the year. Asking these important questions as they arise will allow you to make better business decisions.
Whether you have a CPA or are in the market for one, ask the right questions. CPAs are one of the most underused tools business owners have in their toolbox. Make sure your CPA has communication skills and is willing to meet with you on a regular basis. Furthermore, always ask for references before giving access to your financial information. Following these simple tips could save you a lot of time, money and unnecessary hassle. For more tips on choosing the right CPA, listen to our podcast
Scott Shields Bio
Scott Shields ,CPA , Founder of Shields Blice and Company
Scott is a 1981 graduate of the University of Akron with a Bachelor's of Science Degree in Accounting. Upon graduation, Scott went to work for Price Waterhouse in the Chicago, Illinois office. His list of clients included Oscar Meyer, US Steel, Marathon Oil, and Marsteller Advertising Agency. While working for Price Waterhouse he earned his CPA certificate in 1983...