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Essential Tips to Hiring the Right CPA

The following is a guest post by YFS from yourfinancessimplified.com. If you want relevant, witty and easy to follow financial guidance subscribe to his newsletter by clicking here!  If you’d like to guest post frequently at BFS too, just email me at budgetingfunstuff *at* gmail *dot* com!

A certified public accountant, or CPA, is essential for any entity whether it is for large corporations or for individually run businesses. Having the right CPA under you can help save a lot of money and hassles when it comes to filing taxes. The right accountant will not only keep your tax files in order, but they can also provide valuable advice in terms of your accounting system, financial performance, estate planning, and even retirement. CPA’s are a crucial member to any business owner’s team which is why it is of utmost importance to hire a knowledgeable and trustworthy CPA.  The question now is, how can you effectively hire the right CPA for you? Below are some tips to employing the right CPA.

Tips in Hiring a CPA 

1.       Look for Referrals – This is probably the first thing that anyone should do when hiring. Referrals allow you to find professionals who have been tried and tested by people within your circle. Usually the best people to ask are your family, friends, and co-workers, and the advantage of asking referrals from them is that they are usually honest about giving feedback of the people they recommend. Also, people who are close to you would only want to refer the best, so chances are you will find a CPA who has expert credentials. Aside from just asking the people you come across everyday, a great way to scout for referrals is by posting on your preferred social networking site. Post a status that you’re hiring a CPA, and chances are you’ll get some comments that will lead you to a potential applicant.

2.        Verify Credentials – As improbable as it may seem, there are actually some people who are working as bookkeepers or accountants who have no formal education or license in accounting. This is why it is essential to perform a background check on the applicant’s credentials. In order to become a CPA, applicants must meet the requirements set by the state in which they practice. They must also have passed the national CPA’s licensure exam and depending on the state, have received some practical work experience before being awarded a license to practice. There are also continuing professional education courses that are conducted annually and where licensed CPA’s are required to attend in order to keep their license.

3.       Check the Applicant’s References – It is a given that applicants should pass a resume that includes their qualifications and work experience. It is usually at the last page of the resume where you can find references that state the names and numbers of past employers or prominent people who can vouch for them. Call up these people and inquire about the past performance of the applicant. If all is well, then there is a good chance you have a reliable accountant with you.

4.       Use the 60 percent rule – The education of certified public accountants covers a wide range of topics and it is hardly practical for them to specialize in all fields. Look for a CPA that has 60% of his business within the same practice as you. For example, if you are a small business owner, look for a CPA who mostly practiced with other small business owners, and not those that handle individual taxes or large corporate clients. The rationale behind this is that CPAs who specialize in your field will be more knowledgeable of your business needs and will be quick to spot errors or suggest points for improvement.

5.       Find out if you’re a good fit – No matter how good an applicant’s credentials are or how impressive their past work experience, it is always important to check your compatibility with one another. Set clear goals for your business and check whether your potential accountant understands these goals and have a clear sense of what they can do in order to achieve those goals. Don’t be in a rush to hire, talk with them over lunch or coffee, this will give you a clear idea whether or not you are on the same page. And of course, enthusiasm and love for the same craft you are in is always a plus.

Aside from the tips posted above, a good interview should always cover essential questions that can help you determine vital points that would be beneficial for a working relationship. Some of the questions include:

●      What other services aside from the usual reporting or number crunching can be offered?

●      Do you believe we are paying the right amount of tax or should we be paying less or more? Explain your position.

●      Do you have a CPA firm you are affiliated with?

●      Who are your other clients? We would like to speak with some references.

●      What creative business advice can you offer to us?

●      Why should I hire you?

●      What is your policy on returning phone calls or emails? How often do you expect to report to me?

●      Are you available outside of the tax season?

●      When is your working hours? Are you available after hours for calls and emails if needed?

●      How are your fees calculated? Will there be a charge every time we speak on the phone?

●      What can I do to help you with your work and to keep the fees at a minimum?

There are many more questions that you can ask during the interview process that will help you screen for the right applicant. Be sure to be particular about the needs of your business and determine whether the accountant understands just what your business needs. Again, don’t be in a rush to hire someone and be sure to start your search way before the tax season begins. Taking the time to hire the right person will benefit your business in the long run.

Crystal’s Comments:  We had a CPA for our taxes for 3 years from 2007-2010, but she kept changing her prices without letting is know beforehand, so we finally decided just to file our taxes ourselves.  I keep detailed records anyway, so we were already 75% of the way there.  But if we are ever in the market for a CPA again, I think this post is an excellent resource to come back to!



FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 a year.  I went self-employed in July 2011 and make between $80,000-$100,000 through blogging, a rental home, and professional pet sitting.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you).  I even have all of my favorite tools on a resource page - I hope they help you too. This all gives me the time to be with my aging family members, the flexibility to stay close with my friends and family, and it should help if we finally get pregnant too!  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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23 thoughts on “Essential Tips to Hiring the Right CPA

  1. As a CPA I concur generally. Personally as a CPA who is also an internet marketer / blogger, I have amassed a good size portfolio of clients who run online businesses who consult with me each year for tax planning and preparation. There are so many nuances tied to each industry that makes it it is really important to engage a CPA who is close to it.

  2. Before I started my businesses, I made it a point to put together a group of advisors. The group consisted of an attorney, CPA and banker. If you have one of these three, you can find the other two because they all work together. Referral is the only way to find good people.

  3. I’ve been thinking about this lately now that I have business expenses. But given that Crystal does her own taxes, maybe it’s not that complicated? I’ve always prepared my own returns before, but I’m still thinking it might be helpful to consult with a CPA at least once to see where I stand. Thanks for the advice!

  4. I wish I had this info about four years ago. I went with a CPA solely based on a personal recommendation without asking a lot of questions. My friend had a big business … but I had a small one and the subsequent fit was a bad one. I had to switch after two years of getting only the barest of attention. Really pay attention to #5 above.

  5. DOH! I forgot you were posting my article today. I guess I must provide you another guest post since I missed out on the comments this time around 🙂

  6. Great advice!

    This made me reevaluate my current tax professional – because she mostly deals with self-employed small business owners and I am a consultant. I often feel like I am telling her things that she should already know – but in reality it’s probably just because I am not a normal client for her. The 60% rule is SWEET! Thanks,

    – Nate

  7. I don’t think we have CPA’s here in Canada.

    We have CMA’s (managerial), CGA’s (general) and CA’s (the highest category).

    I hired a CA a few years back to do my taxes and he was great, though $$. I ended up doing it myself and have been pretty happy since.

  8. I’m a CPA and these are definately good rules to use. I’ve worked with two different firms in two different cities so I’ve gotten to work with a good variety of people in my young career. As others have said I think the single biggest factor you should consider in selecting a CPA is “Trust.” All CPAs are different; they have different approaches to taxes, billing, and client relationships. If you don’t fully trust your CPA, I would consider evaluating your situation.

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