The right CPA for me

MattTurpin

One component of my budget I neglected to account for (pun intended) is my CPA. I knew early on that I would need one. Technically, it was accounted for in the "labor" component of my budget, back at day one. It was never made specific - I just knew that of the 108,000 allocated to labor expenses total, the accountant and contracted help was in there.
Can anyone help me determine a price to quality ratio for CPAs? What I mean is, when I shop for a computer, I know that if I spend 1,000 or less, I`m getting a bargain-bin piece of junk that won`t last me a year. If I spend 4,000 or so, I`m getting the best value of cost to technology. Anything more than that and I`m spending exponentially more for bleeding edge at diminishing returns in performance. I don`t know how to shop for an accountant. The most important part of a business is the finances. I don`t know what I should want to spend for one.

robertj

Matt,
 
My first question would be - what do you wnat a CPA to do for you?

MattTurpin

Well, that`s a good question. What I need an accountant to do for me is to keep my financial paperwork in order and do my taxes and such. What I`d like, pending cost, is an accountant who can turn the numbers into something I can visualize, and advise me on ways to improve. Really though, taxes and payroll are the essentials. Anything else is icing on the cake.

robertj

Matt,
Those are really three separate activities. Payroll, data collection & management, analysis and understanding. Here are some thoughts from my associate (a CPA) for your consideration: 
 
It is not just what services an accountant can offer. First you should must determine what information you need to effectively and efficiently manage your business.  If you know that – you can determine how and who can best fulfill that need.

 

There is payroll – consider a payroll service for the transactional part of this process.

 

Then you need to ensure that the information needed for tax returns is being recorded and can be accessed. Consider a bookkeeper for this function.  Your chart of accounts in the general ledger should resemble what the industry uses. This aids in comparative analysis. If you need advice getting this set this up – an accountant is a good resource.

 

Financial statements should be produced monthly. Since you (your bookkeeper) will use a software program to record the information, producing the reports is pretty easy. The key is understanding what the reports are "telling you". It is for this that you need an experienced financial person.
 




For the day to day operations:  Reconcile bank accounts on a regular basis. Keep the depositary, check writing and invoice approval functions separate (different people). The bank statements should go to the owner before anyone else gets it. The owner should know what to look for. Occasionally have a bank statement cut at a different end date to look for unusual items. Let the employees in the office know what is happening. Let them know that these procedures are meant to protect everyone. It will also save in bonding costs. Review petty cash transaction carefully on a regular basis with an occasional surprise (unscheduled) review.
 

If inventory is part of your business, then periodic inventories should be done and analyzed in terms of timing, obsolescence and disappearance (theft).

 
Hope this helps.
 
If you`d like to speak with my associate, contact me directly and I`ll give you a referral. my email is robert@bizgrowthmasters.com
 
 
 
 


 

MattTurpin

Thanks, Robert and Mark. This is invaluable information. I believe I can use all of your advice with my company. I`ll do as Mark suggested, and save my expensive CPA for taxes only. Money will be tight early on. I`ll hire a bookkeeper or service for the mundane. Now, the role of advisor - this person would be a separate entity from my bookkeeper and my accountant? This particular function is going to be contingent on company profit. Taxes are the law. Bookkeeping is a must. Advice is a luxury I only hope I`ll be able to afford. 
Payroll serviceBookkeeperCPA for taxes onlyAdvisor if financially reasonable.Time to look into prices. The more I plan, the more the numbers all fall into place. A month or so ago, I had almost lost all hope. The loan situation was a disaster, my budget wasn`t balancing with my expected profit - nothing was working. It`s all falling together now. Thank God I didn`t just jump into this venture without guidance. I would have failed horribly.

robertj

Matt,
 
1. One does not necessarily have to use a CPA to prepare the company income tax filings. There are other qualified sources.
 
2. Following along from your previous post (final paragraph) - you may not be able to "afford" to go along without some type of regular financial advice.
 
Has your funding situation been resolved?
 

MattTurpin

You`re probably right. Expert advice is too important to neglect. Look at how many mistakes I would`ve made already, had I not joined here, after all. My funding situation has been resolved in so much as I know what I have to do on my end, and I found two banks that will offer unsecured loans on terms which I`m overqualified for, which is important because I`m not a homeowner. If all goes according to plan, I`ll be opening my cafe in February. If all goes well, I`ll be opening before that. It depends on how long building renovation takes.

robertj

You`re probably right. Expert advice is too important to neglect. Look at how many mistakes I would`ve made already, had I not joined here, after all. My funding situation has been resolved in so much as I know what I have to do on my end, and I found two banks that will offer unsecured loans on terms which I`m overqualified for, which is important because I`m not a homeowner. If all goes according to plan, I`ll be opening my cafe in February. If all goes well, I`ll be opening before that. It depends on how long building renovation takes.

 
Congratulations on the progress. Glad we could help.
 
I`ll be looking forward to the "Grand Opening" announcement.
Let me know if we can help further.

MattTurpin

Mark, I looked at your website and noted it down for future reference. If I use a CFO, it`ll be on a paid, hourly basis. The cafe is mine, and I won`t share it with anyone. It`s easier to replace a person who only gets paid, than it is to replace a person who owns a share of the company. I`m a control freak.
MattTurpin3/6/2009 5:16 PM

yazminbarajas

Well for my opinion here even thought it already late. If you want to lessen your expense with regards in you Accounting, you might want to just outsource so that the labour cost will be lessen and you will not have to buy computers etc. anymore because accounting solutions firms will provide it for you.

Yazmin Barajas
Marketing
Offshore Business Processing Accounting Solutions Provider