10 signs you need a (new) CPA

Cup of coffee that says "CPA" with various accounting icons surrounding it

As businesses grow, their needs change. You might have handled the books yourself at first, or perhaps worked with a bookkeeper. Sooner or later, though, it makes sense to hire a good CPA firm. Waiting too long could limit growth and hinder effective tax planning, financial reporting and other key business responsibilities.

How can you be sure it’s the right time to turn your accounting and reporting over to a CPA firm? Or if you’re already working with a professional, how can you tell it’s the right one? These ten signs let you know it’s time for a change.

1. Having to review the bookkeeper’s work.

Are the numbers you receive solid enough to rely on? When business owners must spend time each week reviewing the books for errors and resolving discrepancies, it’s time for a professional accounting team. 

2. Limited financial reporting.

How much is in each business account? What is the accounts receivable balance? What are the company’s liabilities? Financial statements that report income but don’t communicate the company’s full financial position won’t cut it for a growing business.

3. No up-to-date schedules to support the balances on financial statements.

Financial statements can only offer an accurate picture of the company’s financial position if the underlying schedules (prepaid expenses, accrued expenses, depreciation, etc.) are updated appropriately. If your bookkeeper can’t do this or doesn’t understand the need, look elsewhere.

4. No clear job description for an open accounting position.

Which tasks are part of the job? Without clear documentation of the position’s day-to-day responsibilities, your new hire will struggle to cover all the bases. Your best bet is an experienced accounting team familiar with all the potential issues and details the role might entail.

5. Absence of financial analysis to help you make good business decisions.

Your accountant should be a valuable resource for business insight in addition to performing basic accounting functions. Expect input like cashflow analysis, key performance indicators, budgeting guidance and other data that should inform a sound business strategy. If it’s not happening, you’re not getting everything you need.

6. Inconsistent or extended turnaround times.

You submit requested documents but then face a long wait for associated deliverables. Month-end close? It could take two weeks or three months. Whether you’re always waiting too long or just can’t count on a reasonable time frame for deliverables, start looking for a new accounting firm.

7. Variable timing for accounting processes.

Like more involved accounting, basic bookkeeping should happen on schedule. Do invoices go out on time? Can you be confident bills are paid and accounts reconciled by the specified date each month? If your work may or may not be completed on schedule, a more consistent and conscientious provider is in order.

8. Having to request corrections to financial reporting from several months in the past.

Finding significant differences between what is and what should be in financial statements is always problematic; a few months later, it’s exponentially harder to resolve these situations. Your accountant should be able to spot and correct this type of problem early rather than months down the road. If not, find someone else.

9. Inadequate communication of responsibilities.

Your accountant should provide transparent communication explaining their role and yours within the engagement. If you’re not sure what either you or they are supposed to be doing, you need a new accountant.

10. No process guidance.

Your provider should offer ongoing recommendations to improve accounting processes for maximum visibility and efficiency. When accounting standards or reporting regulations change, knowing how and when to adapt your processes is especially important. If your accountant has never even broached the subject, you’d benefit from a more engaged and pro-active CPA.

Everyone makes mistakes and your accountant is only human. It’s also important to understand that accounting problems often stem from mistakes on the client’s end. That said, you should be able to count on your CPA for competent, timely performance that gives solid value. The experienced professionals at HBP can help you meet all your accounting and business advisory needs.  

Written by Terrence Chapman, CPA, Senior Accountant