Written by Kim Hartsock Tuesday, March 13 2012
Most people think selecting a CPA is necessary but not always fun. Bringing someone in on the intimate details of your finances is very personal, and it can be stressful to a business owner. I view myself as a trusted advisor, someone who gets to know my clients and their businesses. I don’t just consider the compliance part of what I am hired to do, but rather the bigger picture of what the company and its owners are trying to achieve. I consider myself a member of the team.
I’m often asked what to look for when selecting a CPA. I think the most important quality in a CPA is his or her ethical standards. The American Society of Certified Public Accountants has a Code of Professional Conduct to which all CPAs are required to adhere to. These standards govern the underlying principles that all other CPA guidance is built upon. You can verify that a CPA’s license is active by searching the Secretary of State’s website for certified public accountants. (It should be noted that the CPA will only show active in the state where they are licensed to practice.)
When selecting a CPA it is important to work with someone who understands your business. Accounting principles can be quite different across industries. There are also unique economic pressures to these industries. It is widely known that the construction industry has been hit much harder in the latest economic recession than other industry sectors. You should work with someone who understands the trends and benchmarks of companies in your industry. A good way to verify this is to ask for referrals from current clients that are in your industry.
Another key step is to determine and communicate your expectations. Are you interested in only receiving yearend tax planning advice, or are you interested in having monthly or quarterly meetings to discuss the ongoing performance of your company? It is important to set the expectations up front so that both parties can acknowledge their ability to meet those expectations. This would also impact the amount of fees you would be charged, which is important to establish up front as well.
Part of this discussion would be to assess the CPA’s ability to provide additional services. Some may only provide bookkeeping services, while others may provide full tax, audit and advisory services. While you may only need a tax return prepared for your current needs, it is important to consider your future needs as well. Are you anticipating significant growth? Are you considering an acquisition or a merger? What is your ‘exit strategy’? The answers to these questions will help determine your expectations of the relationship you are beginning to form.
The selection of a CPA should be considered with as much thought as selecting a business partner. It is important to know what qualities you are looking for before you set out to select a CPA to work with. It is not a ‘one size fits all’ approach. You are a unique individual, and your business has unique issues, challenges and strategies. For the partnership to thrive, it is important that all members of the team are on the same page.
Below are a few questions to consider when selecting a CPA:
- Is the CPA licensed to practice in your state? And are they in good standing?
- How many years of experience does the CPA (or firm) have?
- What experience does the CPA have with companies in your industry?
- Who would be the team assigned to your engagement?
- What method of communication do you prefer (email, voicemail, face to face meetings)?
- What technology does the CPA use (client portals, electronic documentation)?
- What other services does the CPA provide?
- Should the scope of your services change, how would additional fees be addressed?
- Request at least 3 current client references
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Kim Hartsock, CPA, is a principal at GH&I, a top ten Atlanta-based accounting and advisory firm. In Hartsock’s role, she provides audit and review services for privately-held companies and nonprofit clients. She also regularly audits employee benefits plans. A strong community member, Hartsock is treasurer and board member of the Susan G. Komen for the Cure Greater Atlanta Affiliate. She received a bachelor’s in accounting and her Master of Accountancy from Georgia Southern University.