If you only contact your CPA (certified public accountant) once a year around tax time, then you may be missing out on a great resource.
For while CPAs still handle traditional accounting services such as tax filing and financial statements, many now act as business advisors on a broad range of issues. This can take place in the form of creating budget plans and preparing cash flow projections, to helping your business secure financing and make sound investments.
There are several steps that you can take to find a CPA who will best suit your business's needs. At a minimum, make sure that you select only those accountants who have a CPA designation and a state license. That way, you'll be able to rest assured that the accountant you choose has passed a rigorous national exam and meets certain standard and ongoing educational requirements.
Also, look for a CPA who has a rich knowledge of the industry that your business operates in. This is especially important if you operate in highly regulated or specialized industries such as banking or hospitality. It's also vital in industries that involve very specific accounting issues. In the case of construction, a CPA who has a good knowledge of how "work in process" is calculated will be much less likely to make mistakes on financial statements than one who has rarely handled the issue.
Besides industry specialization, a good CPA should be able to provide your business with the kinds of resources that it needs. For a smaller company that is growing, that might mean finding a CPA who has a relationship with a network of banks that provide small business financing. For a company experiencing debt problems, that might entail knowing which attorneys to call to help delay creditors.
In addition, learn about your CPA's style of conducting business: Will the CPA review your financial statements on a regular basis even if you only meet once every quarter? Can you call him/her for advice or does the CPA prefer to set up appointments? Who will be handling most of the requests, and if it's a junior CPA, how will that person's work be supervised?
Finally, ask about your CPA's involvement in professional organizations. While this shouldn't be a deciding factor in your search for a CPA, membership in associations such as the AICPA (American Institute of CPAs) or state society of CPAs show a commitment to a professional code of ethics and ongoing learning. Their firms are also subject to three year quality reviews to evaluate their performance in accounting and auditing.
So, how much will all of this cost? The majority of accounting firms base their charges on an hourly rate that ranges from $75-$300 per hour, depending on the types of services that are being provided and who is handling the work. You can avoid unexpected surprises by asking for an engagement letter that outlines the expected costs, billing arrangements and services.
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