For many small business owners, their relationship with their CPA is a lot like a pair of old house shoes. Once you’ve found a pair, you treat it like you’ve made a lifetime purchase and may never shop for new ones again. You keep going with the status quo and don’t ever think about the condition of your old house shoes since the path of least resistance is to just keep wearing them. You don’t realize how worn out and uncomfortable your house shoes are until you slip on the new pair that your kids gave you for Christmas.
To kick off our blog, we’re giving you the 5 signs that your current accountant has become like your old pair of house shoes and may longer be the best fit for you.
5 Signs your CPA is a bad fit
1. You struggle to reach your CPA and the accountants on staff.
Stuff happens – the crunch before a tax deadline, someone’s out sick, taking a day off, someone missed your email. If you sent an email, followed up with a phone call a week later, and it’s been another month and your CPA still hasn’t gotten back to you, it’s a sign that this CPA is no longer the right choice for you. Running a business is hard enough without having to spend time chasing down your CPA.
2. Your accounting and tax work is done at the last-minute right before the deadline.
There’s often two sides to every problem and you could be the problem if you ignore the accountant’s requests and you’re late delivering your information. Assuming you’re not the problem – you’ve been paying for monthly accounting work all year and delivered all your business records on time, and you’ve also sent all your personal tax information before the end of February – then you’re CPA is the problem. It’s now April and you still don’t have your tax returns (or worse, it’s September / October and the extension is running out). You eventually get your returns right at the deadline, but your CPA’s lack of effective workload management has created a lot of stress for you and may have created an even bigger problem if these last-minute returns are accompanied by a big tax bill that’s due in a couple of days. It’s virtually impossible to have effective tax planning when your returns are completed last-minute at the deadlines.
3. Your CPA is only focused on the past.
Part of an accountant’s reactive view of the tax and accounting world is a function of compliance work. Today’s deadline is most likely reporting on last month’s / quarter’s / year’s results. The factors we discussed in Signs 1 and 2 may also be causing your accountant to be stuck in a reactionary viewpoint only looking at the past. It’s hard to be very proactive when it’s October 2024 and you just finished your client’s 2023 income tax return. Some CPAs never make the transition to providing you forward-looking advice about your taxes and finances since it takes a consistent effort to overcome the past-looking nature of compliance deadlines. If your CPA’s viewpoint is stuck looking in the rearview mirror, this perspective is mostly likely costing you real $’s in lost tax planning opportunities and recognizing operational improvement opportunities in your business.
4. Your accounting firm is operating like it’s 1999.
There’s a pretty good song that talks about partying like it’s 1999, but it’s probably not a good thing if your accounting firm is operating like it is 25 years ago. Technology advances quickly and your accountant needs to be investing in his business just like you’re investing in your business. One of the areas we see most neglected by other firms is payroll. Some payroll providers are not investing in technology and are still using processes that seem like they were designed in 1999 – you type hours into a spreadsheet and then email it in every week (so your provider can then key the hours into the payroll system) – manually printing / signing / mailing 941s – manually logging into a bank to fund employee’s direct deposits. Your accountant should be delivering innovative ways for you to more easily handle your financial processes and save your time for more valuable areas of your business.
5. Your monthly bookkeeping cost is super cheap.
One of the old adages is if it seems too good to be true, then it likely is. I recently met with a prospect that was paying $50/month for his monthly bookkeeping service; a little further into the conversation, he mentioned that he hadn’t received any financial information from his bookkeeper in over a year. If your current accountant is super cheap, it’s very likely that they are cutting corners to offset some of the impact of the cheap fees (e.g., doesn’t perform all the work, doesn’t train to stay up to date on new laws, doesn’t update to the newest technology). Cutting corners or not performing your work in a timely fashion is most likely generating hidden costs that are costing you more than the savings offered by a cheap monthly cost. Choosing the cheapest provider is not the best decision in many cases. If you’re sick, do you look for the cheapest doctor in town to diagnose your illness and provide a solution for feeling better? If you have a water leak that’s filling up your bathroom, do you hire a plumber that doesn’t have all the tools to stop the leak? When choosing a CPA or accountant to handle your small business’ tax and accounting, choosing the best provider to meet your needs is more important than choosing the cheapest provider.
At Diamant Accounting, we think we’ve hit the sweet spot of value for your investment in tax, payroll, and accounting services. We give you peace of mind in knowing that your business is compliant with its filing deadlines, and we help you save time that is being spent on compliance work so it can be invested in working on your business to earn more money. We use innovative technology to make it easier for you to meet your compliance deadlines and give you better information about your business’ finances. We’re not only focused on meeting the deadlines but also focused on being proactive in identifying opportunities to save money on taxes and earn more from operating your business.
