Key Clues to Watch Out For Between a Great CPA and a Bad One

In the realm of finance, particularly in the complex world of tax and accounting, finding a competent Certified Public Accountant (CPA) is paramount. A great CPA can be an invaluable asset to individuals and businesses alike, ensuring financial health, compliance, and strategic planning. 

However, not all CPAs are created equal. The difference between a great CPA and a bad one can have significant implications for your financial well-being. And it’s not all about experience! Some of the smartest CPAs and financial strategists are not savvy business owners, which can leave you feeling uneasy about your business’s tax situation. In this comprehensive guide, we’ll delve into the key factors that distinguish a great CPA from a subpar one, empowering you to make informed decisions and avoid potential pitfalls.

Communication is Key

Effective communication lies at the heart of any successful relationship, and the CPA-client dynamic is no exception. Maybe business owners view their CPA as one of their greatest professional relationships! A great CPA displays from day one, a tone of confidence and swift action with any of their clients. They actively listen to concerns and provide comprehensive explanations of complex financial matters. Isn’t this what you want from any professional relationship? 

Now, to help spot the bad CPAs, you’ll find very poor and delayed communication. When you have a meeting with them, you’ll feel more confused and discouraged about your business’s financial situation. They will use technical jargon without ensuring that you understand it. Sure they may seem smart and know what they are talking about, but due to their inability to easily communicate basic tax ideas to you, you’ll wonder whether or not this is really the right fit.

Clear Expectations and Transparency

This includes transparent fee structures, timelines for deliverables, and outlining the scope of services provided. A bad CPA may be vague about their services or fail to provide a detailed engagement agreement, leaving you unsure about what to expect or leading to unexpected fees down the line. And even if they do give you clear instructions, they don’t follow those guidelines themselves! I can’t tell you how many times we hear these stories at Get Better Bookkeeping! A hallmark of a great CPA is someone who knows how to set great expectations with their clients.

Patience and Willingness to Explain

The American tax system is one of the most difficult fields of study out there, especially as a Certified Public Accountant. Even with this being the case, a great CPA demonstrates patience and a willingness to educate clients, explaining concepts in layman’s terms and addressing any questions or concerns you may have. Someone who’s willing to just sit with you and help you wrestle with these topics, so that you walk away truly feeling educated, as one of the great character traits of a worthwhile CPA. 

Industry-Specific Knowledge and Experience

Every industry has its own unique financial nuances and regulatory requirements. So as a business owner, you actually should pay attention to whether or not someone has handled a business like yours. If someone doesn’t know what they are doing with your taxes, that’s bad, expensive news! As a caveat, if they are transparent about their lack of clientele in your industry, but show you how they will still clearly take care of you (plus if they have great reviews and recommendations), they oftentimes, you can still give them a shot and do just fine.

Proactive Advisory Services

Beyond mere compliance, a great CPA serves as a proactive advisor, offering strategic guidance to optimize your financial outcomes and mitigate risks. This may involve tax planning, budgeting, forecasting, or identifying opportunities for growth and cost savings. A bad CPA takes the reactive approach, merely completing tasks as they arise without providing proactive recommendations or strategic foresight.

Technology Adoption and Innovation

In today’s digital age, technology plays a pivotal role in streamlining accounting processes, enhancing accuracy, and facilitating collaboration. A great CPA embraces technological advancements, leveraging software tools and platforms to optimize efficiency and provide real-time insights. Conversely, a bad CPA may be resistant to change, clinging to outdated practices or manual processes that impede productivity and accuracy.

Client References and Reputation

Positive references and reviews continue to be the most powerful indicator of success in anyone’s business, and CPAs are no different! If you can’t clearly identify that someone has excellence in their work, then you should have conversations with someone else. It’s become such a staple in business to use for clients trusting your work, so please check out people’s reviews and ask people in your circle for recommendations.

No matter who you work with, you want to leave every conversation feeling thankful that you are working with them. If that’s not the case after the first conversation, and it doesn’t get better after further conversations, then please go work with someone else. Even though CPAs are aging, there are still plenty of tax professionals that are able to help you that do follow the standards listed above!

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