By Mike Musson, CPA, Partner

 Depending on the state in the U.S., a CPA has likely received a bachelor’s degree, passed a rigorous exam, and been licensed to practice in the state after meeting specific experience requirements. They are subject to, amongst other things, ongoing continuing education requirements, which include technical subjects related to accounting and tax, as well as ethics. The designation is associated with professionalism and integrity.

Your CPA may provide some, or all, of these services:

• Corporate, partnership, fiduciary, and individual income tax preparation
• Accounting support, e.g., controller by the hour, employee training, bookkeeping, accounting software assistance, government compliance, financial statement preparation, payroll, business and accounting systems design.
• Business consultations, e.g., financial projections, tax planning, business plan development, retirement, and estate planning.

Don’t wait until April 15th!

In order for someone to help you, they will need some time. Further, mistakes are bound to happen if there isn’t enough time. In the words of our law enforcement community: speed kills!

Are you thinking long-term, or short-term?

A successful business owner once told me that his father (also a successful business person) gave him advice which has proven to be useful beyond measure: find and associate with a CPA, banker and lawyer before starting any business endeavor. Get to know them, have lunch, play golf, and establish a relationship. Good business relationships are built on foundations that lead to long-term, mutual success. Don’t be penny wise, and pound-foolish. Not spending enough now on a tax return, setting up your books, and putting your financial house in order will more than likely lead to spending a bunch more at some point in the future, due to errors, or poor (or useless) accounting records.

By the way, QuickBooks is a fantastic tool, but in the wrong hands it can cost you 100 times more than it cost in the first place. Cleaning up years of poor accounting records can run thousands of dollars, add costs to tax return preparation, and give you poor feedback on the performance of your business.

Sole proprietor or national firm?

A big firm has many technical resources and, as such, higher fees in comparison to a sole practitioner. The bigger firms often have turnover in their management and staff as well, which leads to a less personal touch. Smaller firms will give you personal attention, at moderate fees. These days, even small firms have access to many resources, including national and international affiliations.

As a start, it is probably best to choose your CPA based on the size of your business, i.e., small business equals small CPA firm. However, a 20 person CPA firm may be able to provide top-notch service to a $50 million company on the verge of a public offering.

Finally, think about where your business will be in ten years. You may need help soon with a more complex business. For example, make sure and consider your geographic needs. If you are (or will be) multi-state or international, a very small firm or sole-practitioner may not have access to necessary technical resources.

Do you need a specialist?

Expertise may be an important need for your fledgling business. Do you need someone who works with corporations, the research and development credit, etc? Regarding Internet startups, this may be of less importance, as accounting and tax complexities are not frequent.

Do you like them?

You need to feel comfortable picking up the phone and talking with your CPA, so if there isn’t a base for some good relations such as communications and chemistry, move on to the next candidate. Don’t underestimate the importance of liking the professionals that you work with. They are truly your partners, so this is not something you want to create as an arms-length relationship.

O.K., now how do I find one?

Shop around by asking family, friends or fellow business people, such as your banker, attorney, and others. Ask questions about quality, responsiveness, and timeliness. Talk to more than one, and take your time finding the right CPA. Also, keep in mind that if they don’t have time for you now, they may not have any time at all.

If you find someone that seems promising, ask them about the nature of their clients, and ask for referrals. Make sure and call these referrals. Here are some other questions to ask:

1. How long they have practiced accounting?
2. Are they part or full-time?
3. What are their office hours?
4. Why they are better choice for you than your other candidates?
5. What are the CPA’s professional affiliations?

In addition, ask about their fee range and structure. Many are hourly, some charge by the tax forms completed, and some give fixed prices for “commodities” such as tax returns. The condition of your records will have a major effect on the price of your financials, tax returns, etc. You may need to provide a copy of your returns, financials, etc., to give the CPA the basis for an estimate of their fees for a particular service. (See penny wise/pound foolish comment above.) Finally, ask them if a telephone call is going to generate an invoice. By the way, organizing your data as the CPA has requested (as opposed to bringing in the “shoebox”) will save you money.

Bottom line:

Get to know your CPA, spend time with them, and establish mutually agreed upon expectations, so there are few misunderstandings. Good luck!

Author Mike Musson can be reached by contacting This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Linkenheimer LLP, CPAs and Advisors 187 Concourse Boulevard Santa Rosa, CA 95403-0968 Tel 707-546-0272 Fax 707-546-5642