I sat down with two experts in the profession – Liz Mason, CEO of
High Rock Accounting, and Byron Patrick, Managing Director of
Network Alliance – to find out what questions small business owners should ask before hiring a CPA firm.
Taking the first step
Small business owners often ask me when they should
enlist the help of an accounting professional. It’s pretty unanimous that you should have an accountant involved in your business from the very beginning.
“Day one,” said Byron. “If you start on the correct foot, you will save thousands of dollars in the long run. Easier tax return prep, no cleanup of inaccuracies and better business decisions.”
If you have no accounting experience, Liz also recommends engaging an accountant right away. “There are ways to get reviews for internal bookkeeping done at reasonable rates,” she said.
Asking the right questions to potential CPAs can help both of you discover if you're the right fit for each other. These questions can pertain to technology preferences, personality or overall scope of work; whatever matters most to you as a business owner.
Aligning your goals with a potential CPA firm’s goals right off the bat will help them maximize their time and accomplish more for your business than filing tax returns. So, before you hire a firm, create a list of what’s most important to you and your business. Where are your financial gaps? What do you want to understand better or have someone take care of for you? Do you have specific criteria you’re looking for in a firm?
For example, you might be looking for a CPA with the ability to support multiple pieces of software, a CPA with an automated process or someone with a more professional demeanor as opposed to one that’s laid back.
Once you’ve decided what you need from a firm, you can ask questions that will guide you toward the right individual or team to help you reach your goals. When communication is clear from the beginning, your CPA can make better use of your time and gain deeper insight into your business.
Expert advice on maximizing your accountant’s value:
1. “How would you describe your firm’s culture?”
Asking about a firm’s culture can help determine if they’ll be a good addition to your business’s team. It’s a matter of matching values, beliefs and personalities, since the CPA firm will be spending a significant amount of time interacting with you and other members of your staff.
For instance, if you’re a small, tech-oriented company, you probably won’t want to hire a firm that still uses paper records and requires you to ship or deliver receipts at the end of the month. It comes down to seeing eye-to-eye on how you would like to run your business. Identifying a firm that shares your interests can help you make your final decision. And according to Liz, a good culture equals better communication.
“I’m in 25 different Slack teams, and it’s because they (the clients) add me and their entire accounting team to a channel for quick internal communication,” she said. “Those are the relationships that work the best because we communicate the same way.”
In addition to asking about a firm’s culture, ask about their preferred method of communication and their average response time. Is it email, phone calls, text messages, Slack or Google Hangouts, or video calls? And do their methods align with your preferred communication approaches?
If you’re flexible, you might think finding a firm with similar culture fit isn’t a priority. But if you can eliminate any unnecessary confusion, you’ll allow your CPA to focus on meeting your needs.
2. “What systems do you use?”
When screening potential CPA firms, you should determine which systems your candidates use, so that you know how complex their process is. Like Liz, Byron recommends asking about preferred communication styles, but a follow-up question, he says, is how flexible both parties are when it comes to systems.
“Do you have preferred technology platforms or tools you work with, and what is your willingness to adopt new tools?” he said. “I have seen many situations with either a client pushing an accountant to adapt to a new technology or vice versa. If you ask [a firm] if they are willing to explore a transaction import tool and they tell you they prefer to work in Excel and manually enter the data, you have to determine if that is important to you.”
3. “What industry does your firm specialize in?”
Some CPA firms specialize in a serving a specific professional niche, so if you can find a firm that has worked closely with businesses like yours, they will be more likely to have the expertise to help you grow.
At the end of the day, you’re looking for a partner, not just a historian to who'll say you didn’t meet payroll last month. The more knowledge your CPA has about your business and your industry, the better.
Speaking from personal experience, Liz suggests if your CPA doesn’t understand what you do, they’re likely to spend a good amount of their time – time they could be spending helping you make real progress – scouring Google for answers to your questions.
“I did a ranch’s tax return and I had to sit and Google what their additions were,” Liz explained. “I had a rancher on the phone for an hour explaining the differences between a steer, a bull, a cow and a heifer. If you’re in a certain industry, you want someone who knows how to talk the talk. Otherwise, they’re going to be working with Google,” said Liz.
Ready to hire a CPA?
Seek out people in your niche that will fit well with your business, and understand that not all firms are the same. It’s okay to shop around! We recommend interviewing at least three firms before you make your final decision. If your business has had success with hiring a CPA firm, let us know in the comment section below.