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When to Switch CPA Firms

Last month we dealt with changing banks. This month, let’s look at what you should be getting from your CPA firm, and when you should consider a change in firms.

Here are three basic services you should be getting from your CPA:

1) Accurate timely financial statements. In order to meet this requirement, remember that your company must submit accurate records in a timely fashion to your CPA.

2) Strategic tax-minimization advice. Your CPA’s expertise is taxation and he or she should be sharing any and all ideas (without prompting) to save your company tax dollars each year.

3) Prompt and accurate answers to any accounting questions. Your CPA should serve as an ongoing resource for general accounting and general ledger questions throughout the year. A good CPA should also be well-versed in accounting and particularly cash controls.

Given these three simple requirements, you would think switching CPAs would never be necessary. However, here are the signs that you may need to consider a change:

1) Inaccurate financial statements

2) Late financial statements

3) Close-mindedness about financial statement disclosures and notes.

4) No tax-minimization advice forthcoming without being asked.

5) Lack of response timeliness regarding your accounting practices.

6) Unable to answer your essential accounting questions.

If you find your CPA has several shortcomings from the above list, now is a great time to be shopping. To get competitive rates plus a firm that can handle your needs as well as appreciate your business, go out to bid.

Talk to other business owners in your area for recommendations on firms. Then, do short phone interviews inquiring about the number and stature of current clients they serve. It’s not good to be the largest or smallest of any firm’s clients.

Select the top three firms in your area from your preliminary phone interviews. to receive your formal bid package. In your package, include the scope of work you are looking for as well as your preferred timetable.   Spending time clearly establishing your expectations up front will pay off later.

Finally, ask each firm to respond in writing with their fee quote. Since it is common practice for firms to lure you in with a low first-year quote, and then hit you with much higher fees in subsequent years, insist on multi-year options. And of course, don’t make your selection based only on price.

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