Hiring a CPA is similar to hiring a doctor or a lawyer. Are you going to hire a heart surgeon for brain surgery? Are you going to hire a mergers & acquisition attorney to handle your real estate transactions. Many industries have specialist and CPAs are no exception. There are many that have experience in exactly what you are looking to do, so do some research.
The difference between hiring a mediocre CPA and an exceptional one depends on asking the right questions. Most CPAs will prepare your tax returns and do little else unless you specifically request it. Sometimes, the fees for added services—such as tax planning or business advice—can run surprisingly high. Before you sign with a new CPA, ask these seven questions to find out whether they are the right choice for you.
1. Are you available to answer all of my questions at any time?
As circumstances change, you may need to talk to your CPA on a monthly, weekly, or even daily basis. Look for a CPA in Las Vegas who is willing to answer an unlimited number of questions, if necessary. Make sure you won't be billed at a high hourly rate every time you send them an email or pick up the phone.
Remember, you aren't hiring a CPA just to prepare your taxes. You are also hiring them in order to get the benefit of their years of expertise. If a CPA puts constraints on how much of that expertise they are willing to share, it may be best to look around for someone else.
2. Will you coordinate with my financial advisor and attorney?
Financial experts recommend discussing your financial goals with your financial advisor, your attorney, and your CPA at least once a year. But if there's no communication between the advisors, you may receive conflicting advice. The advice isn’t necessarily bad advice, but if everyone is not on the same page, then you are going to spend more than necessary and getting to your end goal will be harder.
Your attorney may advise you with an eye toward asset protection or estate planning, while your financial advisor is trying to grow your net worth, and your CPA is focused on tax benefits. It's difficult to make smart financial decisions when you're getting pulled in different directions.
Instead, find a CPA who will communicate with both your financial advisor and attorney, whether that means meeting in person, online, or on the phone. That way, you can make sure that your financial decisions are always aligned with your goals. Feel free to ask them how much they will charge you for this. A strong CPA will likely give you 1 of these meetings per year at no charge.
3. If I get audited by the IRS, what will you charge to represent me?
Tax audits are uncommon, but when they do happen, they can be enormously time-consuming. If you work with a CPA who charges by the hour, your out-of-pocket costs can quickly escalate.
Look for a CPA who offers tax audit protection built into their service agreement. That way, if your return does get audited, you'll be protected without having to pay an hourly rate.
Also, find out how much experience this CPA has in dealing with IRS issues. Are they on the phone with the IRS on a daily or weekly basis? Ask them to tell you about cases they have successfully settled.
4. Will you prepare a personal financial statement for me?
Any competent CPA can get you through the tax season and make sure that your returns are filed. But achieving your goals requires more than just paying your taxes and looking at what you did historically. Any personal trainer can tell you what was good or bad about your habits in the last few weeks, but a good one will help guide you so your future weeks are good ones.
Look for a CPA who will prepare a personal financial statement that analyzes your current situation and recommends an actionable plan to reach your long-term targets.
If you own a business, be sure to ask any CPA candidate whether they offer proactive tax planning services for business. That can help you reap significant savings when making long-term decisions and at the same time make sure your individual and business goals are aligned where needed.
5. How many businesses have you invested in with your own funds?
If you only need a CPA for your personal taxes, you may not feel this question is as important. But if you own a business, you will be in a much stronger position if you can find a CPA who has extensive first hand business experience.
While most CPAs have looked at countless financial statements, few have ever actually run a business. You're better off getting advice from a CPA who has gone through the process of buying and selling businesses, making payroll, negotiating with vendors, reviewing contracts with a business perspective, and so on. An experienced CPA can help you avoid pitfalls and make better-informed business decisions vs theoretical decisions.
6. Will you review my financial statements, vendor contracts, and other important documents for my business?
The ideal CPA will not only look at your financial statements, but also analyze them and make insightful recommendations. An expert analysis of your expenses and cash flow helps you keep your finger on the pulse of your business, and gives you an early warning when something has gone wrong.
Look for a CPA who is willing to regularly review your contracts and expenses, such as insurance and payroll costs, and consider more than just the tax implications. What was a great business decision a few years ago, may need to be updated as your life has evolved over the years. An experienced CPA can compare your expenses against industry standards and recommend making changes that pay off handsomely in the long run.
7. Do you offer a satisfaction guarantee?
A good CPA is worth the fee they charge. Remember, you aren’t paying for the hour of time, you are paying for the years of experience which allows them to answer the complicated question in an hour. However, a great CPA will provide you with a broad selection of services that add significantly more value. They should stand behind that value with a satisfaction guarantee. If you aren’t happy with the service you’re getting, you should be free to take your business elsewhere without paying another penny or at the same time getting what you paid back.
Remember: Always ask the hard questions.
When you look for a new CPA, do the research and ask around for referrals. Just remember that even someone who comes recommended to you may not necessarily be a great choice for your particular needs. Before hiring a CPA, invest the time to interview several candidates and ask these seven questions. That's the best way to find exactly the right CPA for you. Also remember that the CPA that was good for you when hired them 10 years ago, may not be the best CPA to help you achieve your goals for the next 5 or 10 years.
Please reach out to our CPAs and advisors if you would like additional information on how McNair & Associates can help you grow your business.
Our CPAs have made (and lost) money through many entrepreneurial ventures over the years so leverage our experience for your benefit!!
702-646-0888 or www.McNairCPAs.com