7 Tips To Finding The Right CPA

Getting a proper grip of our finances is like a holy grail to many of us. A good portion of us don’t know how to manage our money properly. We run our finances like a treadmill, a continuous cycle of earning and spending, neck-deep in debt with nothing set aside for emergencies, retirement or dependants. Research has shown that Americans have low financial literacy when compared to nationals of other developed countries.

Having sound financial knowledge takes time to understand and master. It takes commitment and a solid understanding of your financial situation. Taking the proper steps to get your finances organized and learning better ways of money management may feel like swimming against the current. We may get swept away or drowned. However, if we have someone to guide us, we would learn how to navigate the currents to get to our destination.

When it comes to financial management, one of the professions that get high ratings for their rigour and financial expertise is a Certified Public Accountant (CPA). These professionals whose primary function is to advise, and/or manage the finances of individuals and/or organizations. CPA holders are accountants who have undergone rigorous training to meet licensing requirements in accounting. They are capable of preparing financial audit statements and as such rank among the most trusted financial advisers. CPAs are versed in tax laws and codes which makes them eligible to represent clients before the IRS. As such, the CPA holder presents more advantage to you than the regular accountant.

Working with a CPA is an excellent solution to your business and financial needs. A CPA can relieve the burden that comes with organizing finances. They also give sound financial advice on what type of investment decisions to make and hint on possible tax benefits you (or your business) are eligible for. According to the I.R.S., about 58% of tax returns filed through November 22, 2019, were prepared by a tax professional. This implies that more people feel comfortable using a CPA holder to handle their finances and taxes. However, though a CPA takes the time-consuming and cumbersome process of preparing financial and tax statements off your shoulders, hiring the wrong person can do more harm than good.

Finding a Good CPA

 Since your CPA knows your business very well (sometimes better than you do), and is potentially your financial partner for life, you must take the extra steps to ensure that you hire the right person for you. Below are seven tips you can use when searching for a CPA to handle your finances.

Step 1: Clarify your financial goals

Before you go searching, you need to clarify your financial goals and what you intend to achieve by hiring a CPA. Ask yourself: Why do I need to hire a CPA? Is it to file your taxes? Get tax returns as much as possible? Manage payroll for your small business? Assist with IRS audit or plan your retirement? Clarifying your goals narrows down your search parameters and makes you know what exactly you are looking for. It also helps you to have a long-term perspective of your financial goals.

Step 2: Make a list

Shopping for anything requires a list, even finding a CPA. Don’t run along with the first name that gets thrown at you. Ask a good number of people (friends, family and co-workers) for referrals. Find out who they use and if they’ve had a positive experience working with them, then compile a list from there. Alternatively, you can also search the  IRS directory by ZIP code to find a CPA working near you. Most states C.P.A. societies maintain online directories which is a good source for finding competent CPAs in your area. You could also use your local telephone book, though this offers less information.

 Niching down your search is also very effective. CPAs tend to focus on particular niches such as high-net-worth individuals, corporate clients or small-business owners. You can ask people who have similar financial needs such as yours for inputs.

Step 3: Conduct background checks

People consider CPAs as their financial partners. This is because they know your actual financial status, advise you on how to increase your sources of income, and help you detect fraud and keep your books in check, among other things. This requires a great deal of trust. As such, it is imperative you do a background check to determine if the CPA suits your purposes. This implies verifying their credentials and reading reviews on their services. 

If the referrals you got are listed on the state CPA society’s directory, their credentials are most likely legitimate. This does not mean they would suit your needs. You can back up your search by reading online reviews to see how they serviced clients with similar financial needs as yours. Though there may be one or two negative reviews, repetitive complaints are a red flag.

Step 4: Make a final draft

After you have conducted background checks and read reviews, you can trim down your initial list to those who are most suitable for your financial goals. There is no clear-cut number to use when trimming your initial draft, but you can choose several potential CPAs based on time, distance and resources available to you since you would have to meet with them and discuss.

Step 5: Set up an interview

This is the most critical stage in your search for a CPA. Apart from technical competency and credentials, you would also take into account other factors such as charisma or empathy. You would want to choose a CPA that perfectly understands your financial needs and aligns his expertise to suit those needs. This is also where you clarify pending issues which can’t be ascertained through reviews, background checks and referrals. Concerns bordering on the financial implications of divorce, handling inheritance, setting up a trust fund for your beneficiaries, tax implications of investments or starting up a business, handling tax returns would be trashed out here. During the interview, you can find out how many years of experience the CPA has if he has dealt with cases similar to yours, hours and availability and including price structure billing rates. This would help you to reach a decision. 

Step 6: Compare and contrast

After you have finished the interview process, you now have all the information you need to compare and contrast your final candidates. The basis of comparison depends on your financial needs and goals. You can use parameters such as availability, billing rates, years of experience, ability to help you reach your financial goals, specialty, or unique benefits, as factors to evaluate the right CPA for you. Also, be mindful of behavioural attributes of the CPA. How easy is it to work with them? Are they considerate? How committed are they in helping me achieve my financial goals, are some questions which should drive your final decision.

Step 7: Choose

At this stage, all your pending questions would have been answered, and you are ready to take action. Call up your final candidate and book an appointment. Ask what papers and documentation are required. Choose a convenient time and place to arrange a meeting (because they take a while to conclude). Finally, having done a thorough and rigorous job, be confident with your decision and take the bold step!

The Buck Stops at Your Table. 

Even though we may need professionals such as CPAs to make sense of taxes, be aware that the buck stops at your table. You are responsible for any decision taken pertaining to your finances and taxes. As such, though it is good to hire a CPA, always cross-check all documents, verify investment advice and ask questions when in doubt. Do not sign a tax return form or any document without checking if it is accurate.