Finding the right accounting professional who fits your business is an important decision. Understand what you’re buying by following these straightforward guidelines, and you’ll get the best return on your investment, along with peace of mind.
1. Delegate to the right professional.
It’s easy to assume that bookkeepers, accountants and CPAs are all alike, but there are vast differences. For example, a start-up company might hire a bookkeeper to handle accounts payable and accounts receivable and to track all business income and expenses so they’re organized for tax estimates and filing. Later, that same company might turn to a tax professional to handle the actual tax preparation and filing.
For tax preparation, you could choose from a variety of tax professionals or choose a certified public accountant (CPA). Accountants who hold the CPA certification must pass rigorous ethical and accounting examinations as well as satisfy continuing education requirements to earn and maintain their certification.
Keep in mind that anyone can call themselves a tax professional, regardless of education or experience. You might pay a higher fee to work with a CPA, but there may be good reasons to do so based on your business needs or personal preferences. It’s also possible to negotiate fees based on the scope of work.
2. Consider flexibility for growth.
As businesses grow, they experience increasing requirements around employees, financial oversight and taxes. Business owners also need to consider the future value and leadership of the business to prepare for the time they’ll exit or sell. These more sophisticated concerns are the realm of CPAs.
In addition to tax planning to help you avoid overpayments to the government, CPAs can help you address cash flow management, exit strategies, audit requirements, health care benefit compliance, lender relations and equipment purchases, real estate, entity selection or acquisition plans.
Ideally, your choice of accountant should mature along with your business size and scope. Your return on investment is in equal measure to how you leverage the skills and experience of your accountant or CPA. A professional who understands the ins and outs of your business over time can help you make smarter decisions now and later. It also helps if the professional you choose can interact well with your other advisers, such as attorneys, insurance providers or bankers.
3. Narrow choices by expertise.
Similar to many professions, accounting has evolved from general practice to specialization. There are CPAs who focus on business valuations, forensic accounting, state and local tax, estate and financial planning or international tax. Others are known for a particular industry or type of business structure such as real estate, manufacturing or family-owned businesses.
Review the professional’s bio. Find out if he or she focuses on a particular area or holds additional certifications. Ask your other advisers for referrals. The Minnesota Society of Certified Public Accountants (MNCPA) offers a web page that features a CPA referral service. You can search for a CPA based on specialty, industry and location at www.mncpa.org/referral.
4. Do your due diligence.
The accounting field has traditionally held a position of high prestige due to the level of education required of accountants, the confidential nature of client/accountant interaction, and the regulatory and legal pressures to present accurate financials.
In recent years, however, that prestige has unfortunately tarnished due to public company accounting scandals and news of tax fraud and identity theft. While it’s the typical case of a few bad apples spoiling the bushel, business owners are always wise to do their homework when choosing an accountant.
This is where it’s especially important to ask your trusted advisers or other business owners for referrals. You can also check the Minnesota Board of Accountancy website. This organization regulates CPAs and publishes any disciplinary actions against CPAs certified by the state.
Complicated financial decisions are made easier when you have expert advice. Find the right professional for your situation, and you’ll enjoy the satisfaction of money well spent.