Choosing and using a CPA
By Marcia Tillett-Zinzow, Tillett Marketing Solutions

A good accountant can be critical to the success of your business, but all accountants are not created equal. Some offer more, and some offer less, and it's important to know what they can provide your business before you retain someone. You may need an accountant, or you may need a certified public accountant (CPA). If a CPA is what you need, finding the right CPA can be the key to your success.

There are significant differences between CPAs and non-CPA accountants. Anyone with a penchant for numbers can be an accountant and accomplish day-to-day bookkeeping and periodic tax filing obligations. Accountants can be high school graduates - or not - with little if any formal training in accounting. If you're starting or operating a very small business with simple accounting and tax issues, and if you've done everything right with the IRS from the start, a non-CPA accountant may be just fine.

But if your business is complex in any way, you should consider a CPA. If you're selling over the Internet, if you have sales or use tax concerns, if you think you could be more efficient or more profitable, if you want to expand or are considering a merger, you definitely could benefit from the expertise of a CPA.

Unlike non-CPA accountants, CPAs must hold at least a bachelor's degree in accounting, and they must pass a rigorous, four-part exam. If they're members of the American or Wisconsin Institutes of CPAs, they also have to undergo regular peer reviews and comply with continuing education requirements - not to mention a code of ethics, to which non-member CPAs do not have to adhere.

In years past, CPAs have been most closely associated with, and defined by, their tax, accounting and audit services. They still do those things and always will, but that's not all they do.

"The traditional services will always exist," says Sally Glick, director of marketing services for Polaris International, a global association of 75 to 80 CPA firms. Glick has worked for CPAs for more than 20 years, starting in her father's suburban Chicago practice before broadening her career to networking associations.

Tax returns, audits, compilations and reviews, P&Ls, balance sheets and financial statements "will always be the bread and butter of the CPA firm," Glick says. But many other, non-traditional services are now being provided, and the list is growing all the time. Management consulting services are chief among them.

"In the past, if something wasn't broken CPAs didn't fix it. Now they're looking at clients in a new way," says Glick. "They're saying, you're doing what you're doing well, but compared to other people in the industry or even compared to your own potential, there are other things you could do to be even more successful."

Technology is one of the tools some CPAs are using in their management consulting practices. The rapid evolution of hardware and software perpetuates continually new and more efficient ways to operate almost every aspect of a business. Some CPAs keep up with these rapid advances and help their clients implement state-of-the-art solutions designed to make them more efficient and more profitable.

Business valuation or appraisal services, litigation support, family business consulting, and merger/acquisition assistance are other non-traditional services many CPAs now provide. Glick says financial services are the next wave: Money and asset management, provided on a fee-for-service basis.

"They're saying to the business owner, for the life of your business I have helped you grow your wealth. Who better now than me to help you manage it," Glick says.

Add to this changing service mix the many consolidations within the accounting industry, and you can find yourself confused about who's offering what to whom.

The rule of thumb is believed by some to be, the larger the firm the greater number of services and wider the scope of industry expertise; the smaller the firm, the more personalized the service. But voluntary alliances with other firms across the nation, or the globe, through membership in associations like Polaris, the International Group of Accounting Firms (IGAF), or Accountants Global Network (AGN) give some firms the best of both worlds. Member firms are able to offer clients a wider range of services and deeper level of industry expertise because they can call on one another, draw on each other's expertise, and sometimes collaborate on engagements.

"The expertise is the very same, really, as being in a Big Five," says Glick. Yet, they remain small and local enough to offer personalized, community-oriented service.

Given all the variables, the best way to find the right match for your business is to talk to one of your other trusted advisers: your banker or attorney. They keep their fingers on the pulse of CPA services and regularly make referrals, carefully examining the business owner's needs and attempting to match them with firms that can help them.

Geographic location, reputation for timeliness and responsiveness, and compatible business philosophies play into the mix, but it seems everyone agrees that when all is said and done, relationships are the key component.

"It's really all about relationships," says Scott Fabry, an attorney, CPA, and shareholder with Godfrey & Kahn, S.C., a multi-office Wisconsin law firm.

Fabry keeps track of a broad range of firms, from sole practitioners to the Big Five multi-nationals, to whom he can refer clients. Before he makes a referral, Fabry tries to determine the client's specific needs and get an idea of their expectations. Like other attorneys and bankers, he attends networking events with CPA firms, co-sponsors seminars, and engages in breakfast and lunch dates and golf outings to stay up to date on the offerings of various firms and to get to know the people who work there.

Scott Fortune, assistant vice president with Wells Fargo Bank in Green Bay, echoes the importance of relationships and says he looks for a match between cultures or philosophies, too. Fabry likes to know how a particular firm will work with all the professionals in what he calls "the client's trusted group:" the attorney, the banker, the insurance person, and the CPA.

Fabry and Fortune both typically give their clients several firms to consider, then let the client decide. The process should entail interviews with the suggested firms, to gain a chance to look for signs that the CPA is a good match. The following questions might be asked:

• Is he or she a good listener?
• Do they ask pertinent questions and demonstrate interest in your business?
• How much do they know about your industry?
• Do they have services you might need in the future?
• Finally, do you think you can work with them?

Once a firm is chosen, the client shares responsibility to make the relationship work.

"The client needs to be able to manage the accountants and tell them exactly what they need. They're going to have to tell them what their expectations are. And they have to be realistic in their timeframes," Fabry says.

There are some times of the year, especially during tax season, when response times may be slower. Certain things are time sensitive, Fabry says, but not everything. If you're one of those clients to whom everything is a crisis, and you make your CPA "jump through hoops" unnecessarily, you actually could find yourself being fired.

All in all, however, if you listen to your advisers, you're clear about your goals, and you have realistic expectations, you should find a CPA who's compatible with you and your business. This can be an important step if you ever need financing. As Wells Fargo's Fortune says, "I can't even tell you how important the CPA relationship is. As a commercial lender, it's vital."

 

This article was published in the October 2000 issue of Corporate Report Wisconsin and is used with their permission.