Your Most Frequently Asked Questions, Answered.

Q. Why should I hire a CPA?

A. If you own a small business, having a CPA has many advantages. For one, a CPA can help you navigate the extremely complex world of tax codes and tax write-offs. Tax planning involves so much more than just estimating how much you’ll owe in taxes. When done correctly, tax planning can minimize your tax burden, maximize your profits, and help your business flourish.

In addition, in the event that you get an inquiry from the IRS, a CPA can determine the best way to respond to the IRS’ request. A well-educated CPA knows exactly what information the IRS needs and how to respond to their inquiry. A good CPA knows the IRS’ language, so they can ensure you respond to the IRS with the correct information. And finally, CPAs can bring a fresh perspective to your business financials. We can offer a 10,000 foot view of how you’re doing each month and where there are opportunities for profit improvement.

Q: What is the difference between a CPA and an accountant?

A: All CPAs are accountants, but not all accountants are CPAs. Accountant is a more general term for someone who keeps records of any money received, paid, and owed by a company or person. CPAs, on the other hand, are held to a different standard. A CPA must pass very rigorous state licensing exams and is current on all state and federal tax laws. In addition, CPAs are required to complete a certain level of continuing education to keep their license. Because of their higher level of training, CPAs can do a detailed financial analysis of your business, offer tax planning and compliance, and represent you if you are audited by the IRS.

Q: What should I consider when I’m hiring a CPA?

A: Before hiring a CPA, we suggest you interview a few candidates. Here are a few things to consider when you’re interviewing CPA candidates:

• Ensure they have professional education in the field, relevant experience, and a good track record.
  Find out what oversight policies they have in place. What checks and balances are implemented to ensure accuracy?
• Ask if the CPA has experience in handling financials for your industry. Some industries are more complex than others, so it’s helpful to hire someone who is familiar with the intricacies of your industry.
• When you’re asking for a price quote from a CPA, be upfront about how much interaction you want to have with them. One client might prefer to receive a monthly statement with a quick note, while another client might want have a quarterly face-to-face meeting to go over financials. You may even want to have quarterly and/or annual meetings to review changes in your business, assess your business’ financial health, and to discuss tax planning/compliance strategies. Most CPAs are willing to accommodate your needs.
• Make sure you’re comfortable with how a CPA candidate explains information. If you’re unfamiliar with some tax terms, etc., your CPA should be able to talk to you in a language you can understand.
• If you’re interviewing a CPA firm, find out if you’ll be working with the same person all the time. You need to be able to build a relationship with your CPA over time, so be certain you won’t be handed off to whoever happens to be available at the time.
• Ask for examples of creative business/tax planning advice the CPA has offered other clients. This will give you a good feel for what type of advice you can expect from them.
• Find out how they prefer to communicate with their clients and how frequently. Set those expectations from the beginning so there are no surprises.

Ready to get started? To schedule a free consultation with a member of Harvest Tax & Accounting, start here.