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Questions to Ask When Hiring a CPA or Small Business Accountant

Ask about Billing, Taxes, Services

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Before you hire a Certified Public Accountant (CPA), sit down face to face and have a discussion. Get to know the person you will be working with and probably trusting to give you good tax advice. Asking the right questions will give you lots of good information about this accounting and tax professional.

Fees and Billing
Ask how the firm bills clients and about billing options. Most firms bill on an hourly basis but firms will often have a monthly rate. Ask what's included in a monthly rate. One CPA might define it to be posting cash receipts and disbursements in accounting software while another might also include preparing monthly journal entries, balancing the bank statement, and printing a profit and loss report for you. Rates alone should not be the determining factor in hiring a firm; you just need to know what to expect.

Services Provided
Most CPA's and accounting firms provide a range of services, from assisting with monthly bookkeeping to payroll processing/payroll taxes, to taxes and audit representation. If the firms has several professionals, they will probably specialize. If you are looking for an all-in-one firm, a CPA is better than an accountant, because CPAs are qualified to do more, including representing you at a tax audit.

Audit Representation
Ask if this person is qualified to represent you in an IRS audit. All CPA's are qualified to represent clients before the IRS, but not all accountants are. Also ask how many tax audits this person has participated in. You may never be audited, but having someone on your side who knows what to expect with the IRS is a plus.

Experience in Your Business Area
Ask about the experience of this firm with your type of business. Not all business types are handled the same from an accounting and tax standpoint, and having a firm that understands your field is very helpful. For example, if you are a health care professional (chiropractor, acupuncturist, physical therapist, psychologist, or other), your CPA should be knowledgeable about valuing equipment and accounting for patient receivables.

Representation in Several States
If your business operates in several states, ask if the firm is able to practice in all states where you have a business. Many states have reciprocal agreements, but check anyway.

Computer/Email Use
Most professional firms use email and many use Skype, teleconferencing, and other online services. If you have a firm that's not in town, using these services is essential. But some older professionals don't feel comfortable emailing for security issues. How you do business will be reflected in your preferences and those of your CPA.

Tax Consultations
One of the primary purposes of having a CPA is for tax consultation. Ask how often this person recommends meeting to discuss taxes. You should meet at least at mid-year, after the June financial statements are prepared, and some firms recommend meeting every quarter. It is far better to pay a little more to meet several times a year than to wait until the end of the year and find that you have a tax problem.

Tax Philosophy
Have a frank discussion about tax philosophy. Is this person cautious, assertive, or aggressive about taking deductions? A couple of good points to use as examples are travel expenses and home office deductions. Your CPA's style and philosophy should match yours. If you don't feel comfortable with this person's philosophy, keep looking.

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