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Questions to Ask Your CPA

Updated: Jan 11, 2021

If you’re looking for a CPA, you’re likely either about to purchase a practice, or you’ve come to realize that you haven’t been getting the service you deserve from your current accountant. Here are some questions every dentist should ask before hiring an accountant.

How familiar are you with dentistry?

Even a CPA with decades of experience may be a poor resource for you as a dentist. A dental CPA will understand the intricacy of purchasing or selling a dental practice, the industry averages for the common expenses and how they should be reported on your tax returns, and best practices for taxes & accounting nuances to maximize the benefit of your professional relationship. Additionally, a dental practice has the opportunity to achieve some extra tax deductions based on the activities completed in the office, and someone inexperienced in the dental field is likely to have you miss out on tax savings, or even worse, they might prepare your tax returns with an atypical listing of expenses that could inadvertently trigger an audit.

Who really does the work?

If you hire an accounting firm with hundreds or thousands of other clients, it’s likely impossible for “your” accountant to actually complete the work on their own. Most likely, and almost certainly in the case of larger firms, all of the actual work is completed by staff accountants. These may be recent college graduates or career bookkeepers. It’s very common for “your” accountant to do a quick review of their staff’s work before putting their signature on a document. Some owners pay top dollar for a certain CPA’s work and may never find out that they’re actually paying for someone quite inexperienced who is doing all of the work.

How much will this cost?

Especially once you understand that “your” CPA may not actually be doing the work, the next most logical question is to ask how much the work will cost. If the firm charges by the hour, the staff accountants or bookkeepers likely bill their time at a lesser rate, but often their inexperience causes the amount of time spent on any given task to take much longer. Even better, ask the firm if they’re willing to quote you a flat rate fee for an agreed upon amount of work.

How much will a phone call or email cost?

Related to above, it’s good to clarify when hourly billing kicks in. Are you able to call and ask a “quick question”, and do they have a certain threshold for number of minutes before they might start billing? Also--will they let you know that you will be billed before they move forward with the research or responding to your email? It might be that you ask a question, but the answer isn’t worthwhile if you’re going to receive a $500 bill.

If I call you, will you know my business’ numbers?

Depending upon who is actually completing the payroll, bookkeeping, tax planning, tax returns, and financial statements, it’s possible that “your” CPA may not be very knowledgeable about the state of your practice’s finances. It would be good for you to understand how much involvement “your” accountant will have such that you can get an informed answer when you call with a quick question.

How can I get ahold of you?

Will you have to call a receptionist and hope to be transferred through to “your” accountant? Will your phone calls or emails be returned in a timely manner, especially when time-sensitive material is involved? Will they guarantee to respond to phone calls or emails within a certain amount of hours? Will you have your CPA’s personal cell phone number to be able to get immediate answers to questions when you need them?

When will my tax returns be completed?

Some tax accountant’s have mastered the art of procrastination, or at a minimum have taken on too many clients to complete all of the work by the April 15th deadline. They’ll suggest that you “go on extension”, and some of them will then take the summer off. In the meantime, your books remain out-of-date and you’re unable to plan for the current year. This is far too common, and many practices end up perpetually behind and never able to help you proactively plan to minimize taxes and maximize cash flow. If “your” CPA is personally knowledgeable of your books, and if they aren’t overly-committed with too many clients, your corporate tax returns should be able to be completed by early February. And as soon as those are completed, your personal tax returns should be able to be completed shortly thereafter.

Will you tell me how much tax will I owe?

If “your” CPA is personally knowledgeable of your books, and isn’t overwhelmed by their other clients, they should have proactively calculated your projected tax burden late in the year such that you’ve had a pretty good idea of any taxes due by the end of the calendar year. If you’ve ever been surprised by how much taxes you owe in April, you might consider finding a proactive tax accountant willing to work with you personally!

How do you access my books--and how often?

In the old days, a client would have their books on their own computer and then, at some regular interval (monthly, quarterly, annually) send a file to their bookkeeper or accountant. Work would be completed on the books, and then a “change file” sent back to the client for them to install the updates back on their computer. This meant that the books were usually out-of-date by at least a couple of months in a best-case scenario. Unless they’re living in the Stone Age, most tax accountants use cloud-based software that allow both you and them access to your books at any given time. You should ask “your” CPA who will access your books and how often. Will your books be kept up-to-date continuously?

Is my data secure?

Some of the older accounting firms may still use local servers with your bookkeeping or confidential tax data stored only at their office. Local servers may be more vulnerable to hacking, or even worse, a server failure may wipe out all of your important records. More modern firms will use off-site, encrypted servers that are regularly backed-up (every couple of minutes!) to both maintain and secure your data. It’s important you understand where your data is stored, if it’s encrypted, how often the data is backed up, and to know who at the firm has access to your confidential data.

When do you plan to retire?

What might seem an inappropriate question is definitely not when it comes to securing a long-term professional relationship.

Dave Sholer, CPA, MBA works exclusively with dentists in California, offering full-service accounting & tax solutions for dental practices of all sizes.

Want more info? Dave offers a no-cost, zero obligation consultation to answer whatever questions you have and/or to review your books, tax returns, and payroll situation.

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