Art of Accounting: Anything less than a 10 is an F

It goes without saying that your accountant should have a keen understanding of who pays you, who you pay and how to maximize your returns on investments. Because your accountant is so intimately involved in assisting with your financial decision-making needs, the relationship should be one that is built on a foundation of trust and transparency. However, sometimes when that level of comfort no longer exists, it may be time to move on. Consider these 10 questions below and give a score from 1-10 to find out what decision you should make.

1. Does your CPA firm keep you advised on current business issues affecting your industry?

2. Does your CPA firm specialize in or have expertise in your industry?

3. Does your CPA firm have someone who can provide you with key performance indicators that you can use to identify opportunities at your business?

4. Does your CPA firm provide feedback relating to your business on a timely basis?

5. Does your CPA firm review internal controls and non-accounting matters such as compliance, work scheduling and bottleneck avoidance?

6. Does your CPA firm keep current on industry topics that the IRS examines (for a dealership, this includes LIFO, demos, Form 8300, extended warranties, independent contractors and luxury tax) and do they regularly discuss them with you?

7. Does your CPA firm stay current on state tax issues related to your industry such as minimum wages, sales and use taxes, and interstate activities?

8. Does your CPA firm conduct tax planning for your business and its principals before year-end and integrate it with tax law changes?

9. Is your CPA firm capable of providing assistance in planning the future course of your business and its principals, including compensation, the effects of what you do on the business’s value, and succession, estate, individual and business cash flow planning?

10. Overall, is your CPA firm a value-added asset to you and your business that helps in driving growth and profitability?

A grade of nine or 10 indicates the current CPA firm should be retained. A grade of six to eight suggests interviews with other CPA firms, and five or less says the client should protect their business and quickly switch to a firm that would score a perfect 10

I suggest you review this list and see if you would give yourself a perfect 10. If not, then some changes should be in order. CPA firms are becoming more niche driven and expanding into greater advisory roles. Clients have also been moving away from selection based on the accountant’s personality in favor of the accountant’s depth of knowledge that can be applied to helping the client become more profitable.

As always, don’t hesitate to contact Mcrea Woodson & Associates with your practice management issues or questions.