Outgrowing Your Accountant: When It’s Time to Break Free and Thrive

Running a business is challenging in today’s environment. It helps if you have the right team in place. I see too many business owners frustrated because they feel the business should be where it should be. Too often, they need to get the advice they need from their CPA or Accountant. It’s not the CPA’s fault — they may not have the experience or the tools to help you grow the business. This article will help you determine if it’s time to find a CPA to help you take your business to the next level.

In this article, you will learn:

• How to recognize signs you’ve outgrown your accountant.
• What specialized needs a growing business might have?
• Steps to smoothly transition to a new accountant.

Let’s dive into the signs that indicate you have outgrown your current accountant.

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Recognizing the Signs You’ve Outgrown Your Accountant

One clear indicator that it’s time for a change is last-minute requests for information. Suppose your accountant frequently asks for large amounts of information at the last minute. In that case, it shows a lack of planning and proactive tax preparation. This adds unnecessary stress to your financial management and can lead to missed opportunities. Proactive tax planning can help you avoid these pitfalls and keep your business running smoothly.

Another sign is the lack of consistent contact. A good CPA should maintain regular communication throughout the year, not just during tax season. Proactive communication and forward-looking tax strategies are crucial for maximizing tax savings. If you only hear from your CPA once a year, it’s a red flag.

Dealing with more than one person can also be problematic. Relying on a sole proprietor CPA can be risky. You might have to start over if your accountant is unavailable, retires, or dies. Working with a firm provides access to a team of professionals, ensuring continuous support and expertise.

Finally, general dissatisfaction with service is a significant sign. Slow responses, delayed email acknowledgments, and high fees for simple inquiries indicate inadequate service. Your CPA should be communicative, responsive, and transparent about the complexity of your tax situation.

More Indicators It’s Time for a New CPA

Unanswered inquiries are another primary concern. When your questions about taxes go unanswered and your phone calls or emails are not returned promptly, it indicates a lack of responsiveness and poor communication. Effective communication is essential for a CPA-client relationship.

As your business grows and becomes more complex, including out-of-state operations, your CPA should be able to manage these complexities effectively. If your CPA cannot handle complexity, they may be out of their depth. It would help to have a CPA who can keep up with your business’s evolving needs.

Another red flag is an outdated knowledge base. If your CPA is not proactive in recommending ways to minimize taxes, they may not be keeping up with the latest tax laws and regulations, which suggests they may not be providing the most current advice. Staying updated with current tax laws is crucial for competent service.

Specialized Needs of a Growing Business

Growing businesses often have specialized needs that go beyond essential tax compliance. For instance, if your business is expanding, you may need to secure financing. Suppose your accountant cannot assist with business loans by providing timely and accurate tax returns and financial statements. In that case, it may indicate they are overwhelmed or do not specialize in handling growing businesses. Accurate documentation is crucial for securing loans and planning for the future.

Additionally, a growing business needs more than just annual tax filing services. As your business grows, the opportunities for proper tax planning also grow. It would help if you had regular and proactive financial advice to navigate the challenges of growth and expansion.

Finally, managing complex financial situations requires an accountant who is consistently involved and knowledgeable about your business. If your accountant is not proactive in keeping up with your business, it may be time to find one that is.

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Breaking Up with Your Accountant

Suppose you’ve identified the issues and determined it’s time for a change. In that case, the next step is to evaluate the fit of a new accountant. This process will give you the confidence that you’re making the right decision for your business’s financial future.

Evaluate the fit of potential new accountants. A small business might benefit more from an accountant who is part of a smaller firm, offering personalized, proactive services and acting like an in-house CFO. Look for someone who aligns with your business needs and growth goals. Consider factors such as their experience with businesses of your size, communication style, and approach to tax planning and business advisory services.

Finally, ensure a smooth transition. This step is crucial in maintaining professional courtesy and respect for your current accountant while ensuring continuity in your financial management.

In this article, we explored how to recognize signs that you’ve outgrown your accountant, the specialized needs of a growing business, and how to smoothly transition to a new accountant. Paying attention to these signs and taking proactive steps can ensure your business has the proper support to grow and thrive.

If you’re ready to take the next step, consider creating a checklist for evaluating potential new accountants. This will help you find the best fit for your business and ensure a successful partnership.

About the Author: Mr. Clark is a licensed advisor and part of the National Referral Network. Mr. Clark has been in the financial services industry since 2011. Over that time, he has successfully raised $42 million for a handful of companies and completed his MBA program. As part of the National Referral Network, his goal is to build his clients the financial team they need to make sure all the pieces of their financial puzzle is working together. You can connect with Mr. Clark on LinkedIn .

Each month, a partner of the National Referral Network , Protection Point Advisors, hosts a webinar. The design of the webinars is to cover different aspects of financial planning and the importance of build a financial team to help make sure all the pieces of your financial puzzle present a clear picture. There is no cost to attend the webinars. To register for the next webinar CLICK HERE .

Disclaimer: Although Mr. Clark is a licensed advisor, he is not your advisor nor is he a CPA or Tax Attorney. Nothing discussed or shared should be taken as financial advice for any individual case or business situation. This information is for educational purposes only and is not intended to be tax advice or as an act of solicitation and/or recommendation to buy or sell any financial instrument.