Question

Asked: Nov 04, 2009

We've had a costly CPA to prepare r taxes includ many locals.Should I hire a CMA/CPA/EA or a good acct 4 r sm bus?

The company I work for is in the fire protection industry and has been in business for over 3 years (owner has 25 years). I use QuickBooks for our accounting software and use an outside payroll company. Our CPA prepares our income tax statements for us including almost 20 locals. They do a good job but charge too much in which I made reference several months back. They also don't randomly offer financial suggestions unless the questions are asked, but then we are billed for any time spent. We are sensitive to costs and therefore have made the decision to go with a different company. I am faced with the decision of hiring a CMA/CPA/EA or a good accountant for our small business LLC who knows the industry. Is a CPA necessary or can we feel safe and "covered" with a CMA/other?

Categories: In Money and Finance > Business Taxes
In Money and Finance > Accounting
Industries: In Construction & Skilled Trades > Specialty Contracting

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Answers

First off, you should certainly look beyond professional designations and work with someone that has personal experience working with companies such as yours. It should be someone you feel comfortable with, who works the way you do (i.e., likes and uses email, likes one-on-one monthly meetings, whatever), and who you develop a good rapport with.

With that being said, a CMA designation indicates proficiency in management accounting, not income tax preparaton. While a CMA would be well-suited to answering your ongoing accounting questions and help you develop great in-house reporting systems, I don't know if they will necessarily have a broad tax background. On the flip-side, an EA will have broad technical expertise in tax issues, but may not have a lot of experience with in-house accounting issues. In the middle are CPAs. I know CPAs who don't even do their own taxes! I also know CPAs who specialize in taxes. The CPA designation is a broad accounting-based designation and the individual CPA then decides what to specialize in: corporate auditing, income tax prep and planning, or even in-house management reporting.

So, you can see that the professional designation is just a starting point. I'm sure there are people out there who can help you, who have 20 years of experience, who don't have any of the above designations! So start a broad search, ask peers for referrals, take their professional designation into account, and set up a bunch of face-to-face meetings to see if the individual fits your needs and seems like someone you want to work with. They will still charge you hourly for meetings and consultations, but what you get out of those meetings might be well worth it!

HTH!
Deb

Answered: Nov 05, 2009

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