Tips & Tools

Should You Fire Your CPA?

No one cares about your business as much as you do. You've heard that before, right? I often tell my clients that it's important to know and understand your company's financial condition. Although QuickBooks makes the financial record-keeping process much easier, it is in your best interest to have the best CPA you can find.

A good CPA not only processes your tax return, but also should give sound financial advice. Please take a few minutes and answer these 10 questions. Find out if your getting all the services you need from your CPA.

1.  Does your accountant make you feel comfortable and answer questions in a language that you understand?
[ ] Yes  [ ] No

If you don't understand what he is saying, your paying for advice that you can't use.

2.  Does your CPA return your calls promptly?
[ ] Yes  [ ] No

If your CPA is too busy for you when you need financial advice, why keep him?

3.  Does your CPA try to teach you routine tasks to keep his bill down or does he try to keep you dependent?
[ ] Yes  [ ] No

The best CPA's are not interested in routine work but should be used as financial and tax advisors.

4.  Does he outline tax implications of structuring your business as a sole proprietor, S Corp or C Corp?
[ ] Yes  [ ] No

Your CPA should know your personal history (age, marital status, children and their ages), this will help him with your financial planning.  Because ones business and personal taxes are so often linked so closely that any changes or actions affects both.

5. Does your CPA really review your Profit and Loss Statement and Balance Sheet?
[ ] Yes  [ ] No

This is important because only if he takes the time to review the documents can he understand how your business is doing.

6.  Has your CPA advised you of your obligations to the IRS, such as estimated quarterly tax returns, issuing a 1099 at year end and any payroll tax forms?
[ ] Yes  [ ] No

Because tax laws are always changing, it is an important function of your CPA to stay on top of these changes.  It is important that this information is shared with you by your CPA.

7.  Has your CPA discussed the best software for your business?
[ ] Yes  [ ] No

Many times CPAs offer what they know or are currently using themselves.  This is not always the best choice for you.

8.  Has your CPA discussed leasing versus buying options for company vehicles or office equipment?
[ ] Yes  [ ] No

When money management questions like these are critical to your business financial well-being, it is important to get good advice.

9.  Has your CPA compared your financial statements to others in the same field and given pointers?
[ ] Yes  [ ] No

Sometimes it is difficult to know if your charging enough or too much.  Your CPA has access to industry standards and should help you find some guidelines to running a successful business.

10.  Does your CPA have contacts in the banking community that can help you find capital if necessary?
[ ] Yes  [ ] No

This is important when going for loans and can make or break a deal.

Now add up all your total "Yes" answers and multiply by 10.
[80+] If your CPA scored 80 or above, take him/her out to dinner.  Your company has a valuable asset.
[60-70]  If your CPA scored 60-70, take him/her to breakfast and have a heart-to-heart talk about what advice your company needs.
[-60] If your CPA scored below 60, ask for referrals from colleagues.

If an accountant isn't doing his or her job, your company may not be as successful as it could be.  Don't ever think that with all the tax programs available you don't need an accountant. A good accountant is one of the best investments your company can make.

More Tips...