Business Guidance

How to Choose the Right CPA Firm for Your Business

It is now common practice for business owners to choose to outsource various functions and tasks to an external provider where possible, as opposed to recruiting a full-time team member. This is often the most efficient and financially prudent choice, particularly for small and medium-sized businesses, and external partners can become trusted advisors and highly valuable assets to their clients.

However, selecting the best provider is not always a simple matter. There are numerous factors that must be taken into consideration before making a choice. When you choose to outsource an aspect of your business, it is important to feel confident that your provider is appropriately skilled, qualified, and experienced in the relevant areas.

One function that companies frequently outsource is their accounting. In this article, we will share some strategies and best practices to assist you in choosing the right Certified Public Accountant (CPA) firm for your business.

What Does a CPA Firm Do?

A Certified Public Accountant Firm (CPA firm) is a firm that is licensed in the state in which it operates, and that is owned, at least partially, by a CPA. CPA firms are usually auditing and accounting firms that offer a level of specialism beyond that offered by generalized tax and accounting firms.

Many people think of CPAs primarily in association with filing their tax returns. While this is one aspect of their job, CPA firms provide an expanse of other services. Depending on their niche and your needs, your CPA firm may also be able to offer their assistance in financial planning, bookkeeping, audits, payroll, forensic accounting, and more.

A CPA firm’s job is to help their clients to get the most out of their money while also remaining in adherence with all relevant legal and regulatory requirements.

Is a Small Business CPA Worth It for Me?

You might be thinking, “Why hire a CPA for my business when I can handle the finances myself?” While bringing in a CPA firm may seem like a large investment, it can save you a significant amount of time and money in addition to helping you to get the most out of your finances.

As your business grows and scales, your financial affairs will become more complex. This means that if you try to manage them yourself, you may end up spending more time on this than on any other aspect of running your business. A skilled CPA can relieve you of the burden of these time-consuming tasks and streamline your financial processes to ensure they are as efficient as they can be.

The right CPA firm can also advise on ways to make your money work harder for you. If your business is in its infancy, they can assist you with the setup processes to avoid headaches or additional costs later. They can also advise on tax efficiency and ways to reduce your liability, act as your representative in the event of a tax audit, and assist with more accurate budgeting and forecasting.

What to Look For in a CPA Firm

Now that you understand the benefits of hiring a CPA firm, your thoughts might have turned to the question of how to choose the right provider for your business. We advise you to consider several different firms before choosing one. Here are some things to think about as you make your decision.

Does My CPA Firm’s Location Matter?

We live in an increasingly digitized world and, particularly since the Covid-19 pandemic, working with those located in different cities, states, or countries has become the norm. This means that location need not necessarily be a consideration when you are selecting a CPA firm.

However, there are instances in which location can be a factor. Some clients might find it valuable to be able to meet with their CPA in person. Even with the ubiquity of online meetings through technologies such as Zoom, this face-to-face aspect can be an important factor. You must decide whether this is important for you. However, remember that CPAs can work from anywhere provided that they have the appropriate expertise, meaning that geography need not limit your choice.

It is also important to remember that accounting legal and regulatory requirements are not the same in all jurisdictions. Within the United States, some aspects of finance are regulated at a federal level but each state also has its own laws, regulations, and requirements. You will need to ensure that your CPA firm is familiar with your local and regional laws.

Experience in Your Business

Many CPA firms specialize in particular areas of accountancy or in serving clients in specific industries. This means that some will be a better fit for you than others.

For example, the way that accounts are handled for real estate businesses will be vastly different than for service oriented businesses, which are different again from product and distribution businesses. It is also essential for a CPA firm to be up to date on current tax laws, as these can change from year to year.

If you operate in different states, regions, or countries, you will also need to take this into consideration. Hiring a firm with limited knowledge in international regulations will be a poor fit if you do business overseas, even if the firm’s CPAs are otherwise highly skilled. If you happen to be starting a new business, you will need to understand the steps to incorporate (LLC, S-Corp, C-Corp, etc.) and choose a CPA firm specializing in the appropriate kind of legal entity.

Check Their Credentials & Experience

When you first consider hiring a CPA firm, you will most likely begin with an online search. This is a great place to start, but it is essential to do your due diligence before making any decisions.

First, as we have discussed above, make sure the firm offers (and preferably specializes in) the services you need.

Ensure that the practitioner you are considering is appropriately registered with the IRS and relevant professional bodies. Checking the provider’s online reviews can also provide a strong indication as to the quality of their work and the overall satisfaction level of their clients.

Next, find out whether any of your associates have worked with the CPA firm you are considering. If so, ask for their candid feedback about the experience and service provided. If you have not yet selected a CPA firm, asking your business associates and other local organizations in your field can be an excellent way to receive recommendations.

If you are happy with a firm’s credentials, take some time to learn about the key players in the company. Are they experienced? What is their professional background, and what qualifications do they hold? Is the firm new or established? New firms can be as excellent as established ones but without a consistent track record, the risk to you is higher if you choose to take a chance with a newer player in the industry.

Keep Availability in Mind

It is likely that you will work with your CPA firm on an ongoing basis, though in some circumstances you may only need to hire them once. Either way, it is essential to check that they have the availability to offer the services and level of care you require.

Find out which member of the team will be your main point of contact. Ideally, you should be given a dedicated Account Manager. Then pay attention to how available this person seems.

Flexibility is an important aspect of availability, too. If complications arise or events change, can your CPA firm work with you to solve these challenges? Even if this is something as simple as needing paperwork returned quickly, it is important that they are available and responsive when you need them.

Communication & Personal Connection

It is important to remember that people do business with people, not with firms, first and foremost. In other words, all business relationships are relationships.

Pay attention to the communication, rapport, and connection you have with the providers at your CPA firm. Do you feel comfortable and safe with them? This is vital as you will be discussing potentially sensitive matters. Money is a very personal matter for many people, and it is vital to know that this information is in good hands.

You and your CPA firm will need to form a mutually trusting relationship if you are to do business together long term.

Levine Jacobs: CPA Partners in Your Success

The team at Levine, Jacobs & Co has been providing accounting services to New Jersey’s business community for more than 70 years. Since our company’s inception, we have lived by the philosophy of building a personalized relationship with each of our clients.

Our services fall into four key areas: tax advisory, accounting and assurance, business management and consulting, and business valuation and litigation support. Whether you are just starting out, scaling your business, or in need of support with a complex financial matter, we would be pleased to hear from you.

To get started, please contact us to speak to a member of our knowledgeable and experienced CPA team.

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