By Phil Wuollet, CPA
Managing a plumbing company is an arduous financial endeavor that many contractors should avoid handling on their own. Keeping track of your plumbing companies financials requires the help of an expert, which is why every plumbing company owner should hire a Certified Public Accountant.
Hiring the right CPA will put you on the right fiscal track; however, not all CPA’s are created equal and it is important to find the one that is the best fit for you and your plumbing company. Here are a few things to consider when hiring a CPA.
Understands the Plumbing Industry
Find a CPA that works with contractors. There are a lot of different accountants out there and many of them work extensively with contractors. The CPA you hire should have experience working in the plumbing industry. Industry experience is more important than overall experience. A CPA with four years of experience working with contractors will probably be a better fit than someone with 20 years who has never worked in your industry.
Set up meetings with potential firms and make sure they understand what you do. get referrals from other contractors you trust. You can even check online reviews; however, you should not just rely on online reviews for such an important position.
When you meet with a potential firm it is important that you ask questions. What kind of clients do they have? Do they work with large contracting companies or small ones? These questions are important to ensure your prospective accountant can meet your businesses unique needs.
It is important to find a CPA that understands your industry because there are many things that can go wrong if your accountant does not know your business.
Demand Due Diligence and a Clean Record
When speaking with a potential CPA for your plumbing company it is crucial that you question them on their processes. A CPA with no regard for due diligence when it comes to your finances is not the person for you.
Does this accountant just log your books and plug in the numbers or do they conduct a thorough investigation of your finances? A diligent accountant will do a financial analysis and review key aspects of a business’s health such as gross profit margin, net profit and aging accounts receivable on a regular basis.
A responsible CPA should also be communicating with your and your team and looking to build a collaborative working relationship based on trust.
Before you meet with potential accountants write up a list of questions you would like to ask them about their processes. Even asking them what they consider to be due diligence can go a long way in knowing if a CPA is right for you.
Credentials, Credentials, Credentials
An important and easy step to finding the right CPA is verifying your potential accountant actually has their CPA certification. A CPA certification says your accountant has met the minimum standard to work with you. There are places out there that will advertise tax services but are not licensed CPAs.
A great resource for finding or verifying an accountant’s credentials is the American Institute of Certified Public Accountants (AICPA) which has a directory of accountants and their credentials (www.aicpa.org/forthepublic/findacpa.html). This directory will even confirm that their CPA certification is still active since they must be renewed periodically. You can also check your State Board of Accountancy to check their license in your state
The AICPA also keeps note of accountants who faced disciplinary action. Obviously you would not want to hire a CPA that does not conduct themselves in a professional and ethical manner so it is worth checking to see if you CPA has faced disciplinary action in the past.
Understand the Billing Process
How is your CPA going to bill you? Will they want to charge you an hourly rate or a monthly retainer. If you need to set up your QuickBooks would they charge you a flat fee?
Understanding the billing process will allow you to figure out if an hourly payment or a monthly retainer is the right move for your business.
Use the information you have to shop around and learn more about what types of services are available to you at a particular price.
It can be difficult to hire someone as important as you CPA, but if you follow these steps and wait for the perfect candidate then your life as a business owner will become a lot easier.
Phil Wuollet, CPA is a Partner at Epstein Schneider, PLC an accounting firm in Scottsdale Arizona. The staff at Epstein and Schneider helps clients with tax compliance as well as developing forward-thinking strategies for reducing and deferring taxes. Note: the information in this article is intended to be general education and not intended to be tax advice. Please consult your tax advisor to determine the best strategy for your specific facts.