Investing in CPA or accounting services may be one of the best decisions you ever make for your business, but there are key questions to ask an accounting firm before you settle on them as your vendor of choice. Consider that a full third of business owners are dissatisfied or just moderately satisfied with their accountant’s work. Your accountant will guide important financial decisions and oversee some of your most sensitive information, so you have to be discerning when choosing a firm. Asking the right questions will allow you to proceed—or decline—with confidence.
1. What Services Do You Offer?
One of the most important questions to ask a prospective accounting firm is about what types of services are included. Services can vary tremendously from one accounting firm to the next, especially when you’re comparing standard accountants and CPAs. Any quality accountant will process your financial information and generate reports that you can use to improve your operations. But some accountants take things even further, offering services that include:
Bookkeeping
Payroll
Financial advisory services
Tax preparation and filing
CFO services
Some high-level CPA firms will even act in a business management capacity, helping you to strategize the direction of your business and make valuable decisions for long-term growth.
If you want to get the most value for your investment, opt for an experienced CPA firm that offers most or all of the offerings noted above. While the out-of-pocket cost may seem higher, it can be an effective way to make your enterprise more profitable. Not only are you consolidating services that would otherwise require multiple expenditures (like accounting and bookkeeping), but you’re receiving advice from experts who have demonstrated the highest degree of financial proficiency.
2. How Do You Interact With Your Clients?
It’s important to gain as much insight as possible into what your monthly fee actually entails. Some firms communicate primarily by phone and email, while others schedule regular in-person meetings. In terms of sending and receiving financial information, you want to go with a company that makes it as easy as possible, such as with the use of mutually accessed cloud software.
You also want to know how often you can expect to communicate with your accountant and how frequently you will receive reports and follow-ups. While in-person interactions were once considered essential, 58% of business owners now say that they have no expectation to meet with their accountant in person. Some of it boils down to personal preference, but every agency should have a firmly established process for receiving your financial information and communicating with you on a structured basis.
3. What Are Your Fees?
When opting for outsourced accounting, you have to be careful. Some accounting firms charge by the hour, which can result in exorbitant costs for you, the client. In addition, some firms will impose hidden fees for services outside the general scope of work—like if you have a financial emergency that requires an unscheduled consultation. This is what makes it so important to understand each accounting firm’s fee structure.
In most cases, you’ll want to go with an accounting firm that offers a fixed monthly fee for all work provided. You know exactly what you’re paying, and you never have to worry about your finances being depleted by the very people in charge of managing your finances.
4. Can You Represent Me in the Event of a Tax Audit?
If you’re ever audited by the IRS, you don’t want to deal with the headache of having to represent yourself. While any accountant can help you to prepare for your IRS interview, only a licensed CPA can deal with the IRS on your behalf. Your CPA can prepare the documentation, meet with the IRS, and resolve the audit while you simply go about running your business. This is yet another worthwhile reason to consider CPA services over standard accounting.
5. Have You Worked With Businesses in My Industry?
Not every agency is right for every business, even if it’s highly regarded. Ask the prospective accounting firms about whether they have existing clientele or references in your industry. For example, if you’re an entertainment professional, you need an accounting firm that understands the nuances of entertainment industry accounting, like managing taxes for jobs completed in multiple states. If you’re an attorney, you need a professional who understands how to account for client ledgers and retainers.
6. How Can You Improve My Bottom Line?
This may seem like a forward question, but it shouldn’t be neglected. One of the principal roles of an accountant is to make you more profitable, so be sure to learn the processes and philosophies that guide their firm and gain insight into how those processes can enrich your own operations. For example, how does the firm go about assessing waste spending, and are they able to advise you accordingly? What is their process for cash flow visualization and management? Are they able to use market forecasts to make informed suggestions for your business?
If their explanation seems thin or generic, or if it doesn’t line up with your own business ethics or philosophies, that may be an indication that you need to look elsewhere.
7. Do You Have Case Studies I Can Refer To?
Any accounting firm can promise to improve your bottom line, but do they have the track record to prove it? By asking to see detailed case studies, you can get a better sense of what the firm is capable of delivering. While case studies should always be taken with a grain of salt (as some firms will inflate their numbers using clever arithmetic), they can nevertheless be insightful.
The Important Thing Is Just to Ask Questions
There are plenty of other great questions to ask a CPA, but these are the essentials. If you’re dealing with a reputable accounting firm, they should be happy to share their vision, answer your questions, and provide detailed explanations of how they can specifically benefit your business. Be wary of firms that offer vague responses or that deflect your questions with pre-rehearsed talking points and calls to action.
The more you learn about a prospective agency, the more confidently you can proceed knowing that you’ve made the right decision for your accounting needs.