Small Business Resources for Success: Working with a CPA

26 Apr
Working with a CPA

Your small business’s financial statements are like diagnostic tools that provide information on the health of your business. That’s why it’s not only critical that you understand them, but that you also work with a certified public accountant, or CPA.

CPAs can ensure that your financials are accurate and advise you on ways to make your business more financially strategic and profitable. In this article, we dive into the role of a CPA in your business, and key questions to ask your CPA to develop an effective and collaborative relationship.

What is a CPA?

Certified public accountants, or CPAs, are state-licensed accountants who earn a high-level certification that’s based on a combination of exams, practice experience, licensing and education in areas ranging from tax law to ethics. While all CPAs are accountants, not all accountants are CPAs, as many accountants choose not to pursue the rigorous continuing education and licensing that CPA designation requires.

Why should small businesses use CPAs?

Although CPAs can file your taxes and maintain your books, a CPA’s primary purpose is to help their business clients thrive. The best business/CPA relationships are built on mutual trust, respect and collaboration and when CPAs are integrated as an important part of a small business team, they can help business owners with financial planning (including important decisions regarding major purchases, expansions and borrowing), estate planning and business succession, and a range of additional accounting services that impact short- and long-term bottom-line health.

What should you look for in a CPA?

When choosing a CPA, ask for recommendations and referrals, and check references. You want to ensure that your CPA is someone that you trust, as this person is managing the financial records for your company. Second, you want your CPA to be accessible year-round and available to meet regularly. With that being said, keep in mind that, ultimately, it’s your business and its financial health and records are your responsibility.

Key questions for your CPA

Whether you’ve worked with your CPA for years or it’s your first meeting, it’s important to know what to ask and how to properly communicate your needs.  Here are five questions that will help facilitate your conversation and create a strong and effective working relationship between you and your CPA. 

1. How often should we communicate? What is your availability for meeting in person?

Clear, effective and frequent communication is critical to a healthy and beneficial relationship between you and your CPA. Whether you communicate every week over the phone and / or meet monthly in person, it’s important to establish early on how often you will connect.

2. What are some considerations I should consult with you about on an ongoing basis?

A qualified CPA should be familiar enough with your business that they can properly track factors that could potentially affect your bottom line. When meeting with your CPA, ask them to outline the key factors so that you can check-in on them on a regular basis.

3. How can you help me better manage my cash flow?

Cash flow management is essential when running a business and your CPA can provide a wealth of information on the subject. Ask your CPA to help you better understand your cash flow, evaluate problems or areas of improvement, and develop an organized and effective cash flow model.

4. How can you help me prepare for tax session?

As an expert in all things taxes, your CPA can provide excellent insight into ways you can improve your tax preparation and maximize your tax savings. Consult with your CPA about specific ways to organize your records and track your finances. Their advice can help streamline your record keeping process and make the tax-filing process easier for everyone. Your CPA can also help you answer tax-related questions like:

  • Are they any changes in tax law that could impact my business?

  • Are there any industry-specific tax regulations I should be aware of?

  • What is the best way to track my deductions?

5. How can I help you do a better job for me? What do you expect from me?

No matter how qualified your CPA is, they are only as good as the as the information you give them. Take the time to sit down with your CPA to clarify both of your expectations and needs. Talk to your CPA about ways you can better prepare, document and organize your finances so that you can ensure that you’re equipping them with all the information they need.

The right CPA can be one of the most valuable people on your team, acting as a trusted advisor as well as an accountant. They can save you time and money, allow you to put energy and focus into your day-to-day operations and position your business for maximum profitability and success. To reap the benefits of working with a CPA, make sure you come prepared for your regular meeting and layout your expectations for each other. This will help you develop an effective and trusting relationship with your CPA.