Art of Accounting: Anything less than a 10 is an F
Withum’s automotive group put together a challenge to prospective clients in the lingo of a car dealership questionnaire called, “Is your CPA firm a perfect 10?” I have adapted this to all types of clients, not just automotive.
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 me at email@example.com with your practice management issues or questions.
Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition.” Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com along with the Pay-Less-Tax Man blog for Bottom Line. Ed is an adjunct professor in the MBA program at Fairleigh Dickinson University teaching end user applications of financial statements. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 743-4582 or firstname.lastname@example.org.