Interviewing your CPA

Maybe your tax return has suddenly become more complicated because... you started a business, your marital status changed, you had a child, or you got an inheritance.

Whatever the reason, you don't feel comfortable preparing your own return and are ready to call in an expert.

The first thing you have to decide is if you want a CPA or an accountant. Check out our blog post on the topic here.

If you decide to go with a certified public accountant, you are essentially going to conduct a job interview to find the right professional for your financial team. Here are some questions to help you get started in picking someone who will be with you for years to come.

QUESTION: Do you have any disciplinary actions against you through DORA?

We recommend researching the CPAs you're interviewing BEFORE you ask them this question. If they do have actions against them and don't fess up, you know you're dealing with someone unethical. If they have actions against them and admit it, ask them to explain the situation. Their answers will likely tell you a lot about their ethics and whether or not you feel comfortable trusting them. Go with your gut!

To find out if a CPA has had any disciplinary actions taken against them, go to the Department of Regulatory Agencies (DORA) for your state. It may take a little digging to get to the correct page. You can find it here for Colorado. Search for both the CPA's name and the name of their firm. They may have started a new firm that won't reflect the disciplinary action, so it's important to search for both.

QUESTION: Why are you a CPA?

Someone really, really has to love this job. It requires long, long hours for months at a time. Often, someone who is simply in the industry for the money isn't someone you can call any time, someone you can rely on to get back to you quickly, or someone who simply loves helping clients save money and be successful. If their answer doesn't inspire a sense of confidence and trust, and relate their dedication to customer service, that tells you a lot about how your business could be handled.

QUESTION: Why should I hire you?

A direct question that deserves a direct answer. If they're not prepared with a good answer, or their answer doesn't ring true to your gut instinct, then maybe the rest of these questions won't be necessary.

QUESTION: Can you help me make more money/save more money?

When it comes to taxes, you want to do your duty and pay taxes like any good citizen, but you also want a good CPA who makes sure you aren't paying more than your fair share. A good CPA will work hard to make sure you're not overpaying, that you're set up appropriately (paying estimates throughout the year v. paying a lump sum, and have the correct amount of withholding, etc.) They will also want to get to know you, know what your income is, and what your expenses are. This in-depth knowledge of your situation helps them save you money on taxes.

As for business planning, you want to hear that they'll talk you through processes and concepts, teach you, guide you, answer your questions at any time, etc. They'll talk about wanting to dive into the nitty gritty of your business, to spend time learning about your industry, and they'll likely indicate that they've had experience working with businesses like yours before.

QUESTION: What do you think of the taxes I'm currently paying?

This requires that you bring your previous return with you and give them time to look it over. You could even offer to send it in advance so they have time to look at it before the initial meeting. (The best CPAs and their staff will ask you for that when you schedule your appointment.)

The question may seem unfair, but a solid CPA will look over your paperwork and answer your question with more questions until they're able to discern an answer. Much of their job relies on their ability to ask questions, clarify information, and analyze data to find the right answers. One who can't do that, can't do your return.

QUESTION: What are your fees and how are they calculated?

No one likes the money questions... except CPAs! They deal in money and numbers, so don't be afraid to ask how they bill for their expertise and their time. It's smart to start out understanding what you're paying for, how their billing works, and what you can expect as part of your customer service right from the start. It'll save frustration for you later if you know what you're paying for.

Each firm is different. Some bill hourly, others a flat rate, or by the return. Be sure you know if you're paying for any phone calls you make, etc. Know what their hourly rate is (for both the CPA and any support staff). They should be able to tell you after the initial meeting roughly about how much your return will cost. Just remember, you're paying for their education, experience, and time. It may not be cheap, but you get what you pay for and a good CPA can save you money with their advice, knowledge of tax law, and general experience.

You can also ask what you can do to help keep their time to a minimum. You can save yourself time and money by making sure you know what your CPA needs, totaling your receipts, opening envelopes and organizing paperwork. Check out our post on that topic here.

QUESTION: When are you available?

Can you call during normal business hours all year and expect a prompt answer or returned call? Some preparers only work during Tax Season, others are available year-round. How willing is the CPA to be available when you need them? Do they ask you to call them at any time and promise to either answer or get back to you within 24 hours? What about email responses?

QUESTION: Who are your other clients?

Again, you want to know if the CPA has had a client like you before. Do they understand your business? Have they helped someone in the same situation you're in? They shouldn't name names, but they can at least tell you roughly how many clients they have who are in your field.

You can ask if any of your direct competitors are clients. Ask if the CPA foresees any conflicts of interest and what they plan to do in that case.

QUESTION: Who are a few of your other clients you can refer me to?

Even if the CPA can't disclose all their clients to you, they should be able to give you a list of references. Smart ones will have already thought of this and want point you in the direction of clients who are/were in similar situations. They'll likely ask to clear it with the client first (to be respectful of their time and privacy) and then get back to you with a contact name and phone number.

Ask those references about things like turnaround time, the time it takes to hear back from the CPA, how well they feel they know the CPA/the CPA knows them, name a time when the CPA really helped them or found a creative solution to a problem, etc.

QUESTION: If I become a client, what are the next steps?

The strong CPA will know exactly where they want to take you next. They'll have spent this interview answering your questions, but also asking their own. They have a basic idea of what your needs are, what your financial picture looks like, and know what they need to do to come up with a game plan. Businesses will likely touch base quarterly to ensure their growth plans and other elements are on-track. Any new client will be asked for their complete contact information, communication preferences will be established, and the CPA will let you know what upcoming deadline is applicable for you. They'll let you know when you can expect to hear from them again - sometimes it won't be for months, but they'll at least have a timeline in mind.

ADDITIONAL QUESTIONS: You like the CPA, but you've liked all the CPAs you've interviewed. If you're separating wheat from chaff, here are a few more things to examine:

-what exactly are your credentials?

-are you more than a CPA? (Sometimes clients will need multiple services. If they can't offer everything you need, do they have another professional they recommend?)

-how many hours of continuing education do you take each year? (Each state is different. Each state is different, but most CPAs do more than the bare minimum to ensure they're up-to-date on the latest in the regulations and changes.)