When launching a business, many new owners think they can manage the company’s finances on their own. But they soon discover that accounting is a full-time job that requires specific skills and experience. CPAs spend years acquiring knowledge, passing state exams and getting licensed, and engage in continuous professional development to stay up to date with changes in the tax code and financial statutes.
In the early months of your venture, you may be able to perform basic bookkeeping operations. But as your business grows, you will be faced with a more complex and laborious financial workflow that can distract you from your responsibilities as the head of your company. Sooner or later, you will have to hire a professional to relieve you of the burden of financial management.
This article offers some tips to help you make educated decisions about managing your company’s finances.
There are different levels of proficiency in finance. Many novice entrepreneurs don’t know the difference between a bookkeeper’s skills and the responsibilities of an accountant or a CPA. Let’s consider the duties and competences of each:
If you need a specialist who is able to perform in-depth audits, generate solutions for optimizing workflow, and prepare evidence-based forecasts to help your business reach its strategic goals, you need to hire an experienced CPA.
Great ideas often fail because of their impractical implementation. Many novice entrepreneurs hope to sell their products and services to a wide public market, but only a handful survive and attain niche recognition. In most cases, the success or failure of your startup depends on hiring the right staff. Even a project with moderate potential can excel when business processes are placed in capable hands, while a lack of professionalism can cause a brilliant concept to fail.
Staff hiring should be taken seriously and done with care. This is especially true when selecting a CPA whose expertise and dedication will directly affect your revenues.
When sifting through your list of candidates, pay close attention to the following:
Large accounting firms value their reputations. They have large promotional budgets to showcase their services to prospective clients. A local search in Google can lead you to the most reputable accountants in your region. But a big name does not necessarily mean they will align with your company’s unique requirements and strategic goals. Over time you may discover that the reputable CPA you hired falls short of your needs and expectations.
To find a financial advisor who meets your needs in every respect, ask for references from other entrepreneurs who have used their services in the past. You can also find valuable information on niche forums and in business communities. Apart from the candidate’s professional background, be sure to consider their personal attributes and work style, things not usually covered in a resume.
A CPA license opens up a number of career prospects. Most CPAs provide business consulting and auditing services. Keep in mind that you cannot hire the same accountant for business consulting and auditing since it would be a conflict of interest. CPAs are also employed by corporations as financial analysts, finance managers, controllers, CFOs, or CEOs. Corporate CPAs do not provide public services.
CPAs can be found in the following areas:
An individual accountant will not perform well in all these areas. Although CPAs acquire theoretical knowledge on all facets of accounting during their education, solid practical skills are only acquired by working in a narrower field.
If you want to hire a CPA to evaluate the financial performance of your industrial company and offer ways to optimize your production budget, an accountant who mainly specializes in HOA audits or estate planning is unlikely to be able to cope with this task. Find out which CPAs serve other successful companies in your niche and invite them to work for you, or ask them to refer you to competent colleagues.
A CPA license is valid only in the state where it is issued. You need a CPA who is familiar with the local landscape since tax laws and other statutes can vary from state to state.
Large public accounting firms may impress you with their scale, reputation, and robust marketing tactics, and you may be flattered that a prestigious firm wants to serve your company. But a large firm may not be able to take a personalized approach and dedicate themselves fully to your financial issues since large firms have dozens of clients like you. Their services can also be quite costly.
At the same time, a small firm or a solo CPA may have less expertise and offer a limited range of services, falling short of your expectations. Carefully consider the offers available in your local market and try to find a CPA who meets your company’s specific requirements.
Your CPA should be responsive to your questions and promptly provide necessary reports. Find out how quickly candidates process client requests, and if they are willing to provide financial advice on weekends.
Ability to keep pace with the industry changes and technology
An accounting firm that does their bookkeeping manually and is not up to date with industry trends will not be an effective ally. Obsolete accounting practices can impede your business growth while more agile, tech-savvy, and open-minded competitors outrun you. Look for a CPA who is able to deliver high-quality services on short notice, and who continues to engage in professional development.
Ask your candidates what they do to keep up with the latest fluctuations in tax law, how they inform their clients about important changes, and what innovative tools and technologies they employ in their day-to-day operations to increase speed, efficiency, and cost-effectiveness.
Ease of communication
When interviewing a CPA candidate, it is important to look beyond their skills and competency and consider them as an individual with whom you will have to communicate on a regular basis. You don’t want a colleague whose habits, voice, appearance, or outlook on life irritate you. Find a specialist who will be a good fit for your company and who resonates with you both professionally and personally.
Finding a reliable CPA with the necessary background and skills to enhance the financial side of your business can make a huge difference in your company’s growth and success. Remember that every successful company is empowered by a great staff, and finding the right CPA will make your venture thrive.