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8 WAYS TO FIND OUT
By Donald S. Paris, CPA, MST
Written for Retirement-Retirement.com
Think about it -- most of us wouldn’t want a novice handling our legal issues or a medical student performing heart surgery on our loved ones. We would want a specialist, a professional, someone who has a concentrated knowledge of and experience in handling one of the most important aspects of our lives.
It is with similar seriousness that only a specialist should be considered in the case of hiring someone to handle your finances. Someone responsible for something as important as your financial stability and future should understand the complexities of it on multiple levels and be able to provide customized, unique services for a consumer’s specific situation.
Every person is different. Every business is different. Every CPA is different. Some CPAs do not handle individual tax returns. Some handle only not-for-profit or credit union audits. Some CPAs are more aggressive, others more conservative. So how do you know if you are working with the best CPA for you? Do you feel as though you are the only client that the CPA has? Are you receiving the personalized attention that you feel you deserve? If not, know that you have options.
Over the years, I have heard many reasons people are not happy with their CPAs. If any of these thoughts or concerns have occurred to you, you must ask yourself if you are properly represented.
In my 28 years of business and accounting experience, I have come across many of the most common (and common sense) questions that are asked and that you should ask yourself about your accounting representation.
IS YOUR CPA RESPONDING TO YOUR NEEDS?
1. The first issue I see time and time again is when the CPA no longer regularly communicates with clients. If you call your CPA, they need to return your call within the next 24 hours. You should be able to speak with them, not their associate -- especially during tax season.
2. Many CPA firms are organized where partners are assigned to your account, but support-level staff is delegated to do most of the work. The CPA firm can provide more service to more clientele, theoretically keeping fees lower across the firm. If this rate structure and reassignment is acceptable to you, great, but explore the details and level of activity and fees related to your account. If you are not comfortable with this delegation or the explanation, don’t hesitate to explain this to the partner and insist that they provide the level of service and involvement that you feel you need. If your fees increase more than you can handle, think about switching to a smaller firm or individual practitioner, where you know that you will get the personalized attention that makes you feel more comfortable.
3. In this day and age, the process of providing financial statements or tax returns should be anything but slow. Most CPAs have professional computerized financial statement preparation software as well as income tax preparation and planning software.
Take tax return preparation as an example: The CPA should spearhead the effort by sending you an “organizer” package to help you provide them with the information needed to prepare the tax return. Once the CPA has your information, they customarily enter it into the tax preparation software. (Some CPAs send this information overseas to places like India for data entry. If they are doing this, they must get your consent to do so. To not discuss this with you is an ethics violation.) Assuming there are no questions, and they have your authority to do so, the CPA should be able to electronically file your tax return for you. This process also allows your CPA to work electronically with the IRS to ensure that your returns are properly received and processed.
If you feel your CPA doesn’t provide the results within your timeframe, it’s likely the CPA does not have the necessary latest technology or they may have too many clients (or be understaffed). Investigate and ask.
5. Experience is a very important ingredient in your relationship with your CPA. Whether you are a physician, a professional services firm, a retailer, or own a technology company, you want to consider retaining a CPA who has other clients in the same industry. That way, you can be sure your CPA understands your industry and your business.
So, do not be afraid of asking questions about how many clients they have in your industry, or what schools they went to, or what degrees they achieved. Don’t hesitate to ask a CPA you are considering what makes them the very best CPA for you. If they can’t answer the question satisfactorily or don’t seem interested in earning or keeping your business, consider making a change.
6. Advice is a very important element in the service a CPA provides. It has to be accurate in order for you to grow financially and to save on taxes. If you received advice from a CPA, do not be afraid to ask the CPA for their supporting research. The CPA should not be offended by any request you have in this regard.
7. If you think your CPA charges too much, remember, expense is a relative factor. Unlike charges by physicians, which are often covered by health insurance, fees for CPAs come right out of your (or your company’s) pocket. Sure, they are deductible -- but they are an expense.
In the Washington DC area, CPAs charge many different ways. Although some charge by the client project, most charge by the hour with rates of $175 to $500 per hour. As with any investment in professional services, you need to feel comfortable with the rates that your CPA charges. Ask the CPA about their rate structure and what charges you should expect -- before you engage them. Neither you nor the CPA should feel as if they are in an inequitable relationship.
8. A CPA should only take clients they believe that they can effectively service. That way, all clients get the level and quality of service that they need for their particular situation. Many CPAs are growth-oriented and reluctant to turn away new business – regardless of their current workload or whether they have the staff to support it. Unfortunately, an indicator of this often won’t reveal itself until after you become a client. It may be helpful to ask the CPA if they have the capacity or staff needed to provide you with the services that you need. Basically, you should never feel as though your CPA is too busy for you. You deserve the personal attention, and you are paying for it.
My hope in writing this article was to explore some of the reasons that relationships with CPAs may or may not work and to help the readers make informed decisions about an important issue. Only you can decide if you are getting what you need from your CPA. Just don’t be complacent about this important relationship. Remember, your CPA has to play an active role in helping you and your business. The success you have with your CPA begins with the one you select to work with you. It is your decision, so be involved in making it. And make sure they are involved with you.
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