Matter & Substance
  April 2, 2024

Hiring a Certified Professional Accountant (CPA): Cost, Benefits, & Questions to Ask

Hiring a Certified Professional Accountant (CPA) is a strategic move that brings numerous benefits when navigating tax laws and regulations. In this comprehensive guide, we'll explore the role of a CPA, the circumstances that warrant their expertise, the cost considerations, the undeniable benefits of hiring one, and essential questions to ask when selecting the right CPA for your needs.

What Is a Certified Public Accountant (CPA)?

A Certified Public Accountant (CPA) is a financial professional with specific certifications, often distinguished from accountants by their additional qualifications and regulatory oversight. CPAs undergo rigorous testing and education requirements, ensuring a high level of expertise in financial matters.

What Does a CPA Do?

A Certified Public Accountant (CPA) performs a wide range of financial and accounting tasks, providing expert advice and services to individuals, businesses, and organizations. Below are some examples of how a CPA's expertise extends beyond traditional accounting, making them indispensable to individuals and businesses with complex financial situations.

  • Financial Reporting & Analysis

    A CPA's expertise in financial reporting and analysis is instrumental in translating complex financial data into meaningful insights. They meticulously examine financial statements, such as income statements and balance sheets, identifying trends, strengths, and areas for improvement.

    For example, a CPA may analyze a company's financial reports to pinpoint cost inefficiencies, enabling strategic adjustments for enhanced profitability. Their ability to interpret these reports aids businesses in making informed decisions, ensuring financial transparency and sustainability.

  • Auditing

    CPAs play a crucial role in auditing, providing an unbiased and meticulous examination of an entity's financial records. Through detailed scrutiny, they verify the accuracy of financial information and assess compliance with accounting standards and regulations. Their role extends beyond verification, as they often recommend internal control improvements, contributing to the overall integrity of financial systems.

  • Tax Planning, Filing, & Compliance

    In the realm of tax planning, filing, and compliance, CPAs serve as invaluable allies in navigating the complex landscape of tax regulations. They help individuals and businesses optimize their tax positions, identifying legitimate deductions and credits to minimize tax liabilities. By staying abreast of changes in tax codes, CPAs ensure clients maximize benefits while avoiding potential pitfalls.

  • Consulting

    CPAs bring a strategic consulting role to the table, offering insights that extend beyond traditional financial reporting. They provide guidance on various financial aspects, such as budgeting, financial forecasting, and strategic planning. Their consulting services contribute to informed decision-making, allowing businesses to navigate financial complexities with confidence.

  • Forensic Accounting

    In cases of financial discrepancies, fraud, or legal disputes, CPAs with forensic accounting skills employ their analytical prowess to investigate and uncover financial irregularities. They follow a meticulous process of data analysis and examination to present financial evidence.

    For example, a CPA might be engaged in a legal case to trace funds and detect fraudulent activities, providing crucial support in legal proceedings. Their forensic accounting skills are vital in uncovering financial truths and ensuring accountability.

  • Payroll

    CPAs play a central role in payroll management, ensuring accurate and timely compensation for employees while adhering to tax regulations. They navigate complexities such as tax withholdings, benefits administration, and compliance with labor laws. A CPA’s expertise in payroll processes contributes to smooth and accurate financial operations within organizations.

  • Bookkeeping

    Failing to claim eligible tax deductions means you're leaving money on the table. It's essential to thoroughly review the available deductions and ensure you're maximizing your tax savings.

    CPAs contribute to effective financial management through meticulous bookkeeping. They maintain accurate and organized records of financial transactions, ensuring transparency and compliance.

    For instance, a CPA may establish a systematic bookkeeping system for a small business, streamlining financial record-keeping and facilitating precise financial reporting. Their attention to detail in bookkeeping supports businesses in making well-informed financial decisions and maintaining financial integrity.


When Should You Hire a CPA?

Understanding when to enlist the services of a Certified Public Accountant is crucial for optimizing financial management. CPAs bring a wealth of expertise that proves invaluable during various life and business stages. Generally, you should hire a CPA whenever you start to run into concepts you don’t understand, especially as a business owner or high-net-worth individual. However, here are some key areas where it’s especially helpful:

  • Tax Time

    Perhaps the most obvious, the arrival of tax season signals another pivotal moment to hire a CPA. Their expertise in tax planning, filing, and compliance ensures accurate submissions and maximizes available deductions.

  • Starting a Business

    Embarking on the journey of starting a business is an ideal time to engage a CPA's services. CPAs assist in structuring financial systems, navigating tax obligations, and establishing a solid financial foundation. A CPA can guide entrepreneurs in selecting the right business structure, ensuring compliance with tax regulations, and setting up efficient accounting practices to foster growth.

  • Mergers & Acquisitions

    During periods of mergers or acquisitions, a CPA plays a crucial role in navigating the financial intricacies of these transactions. CPAs conduct financial due diligence, assess risks, and ensure a smooth transition. For example, a CPA may analyze financial statements and identify potential liabilities, providing critical insights to facilitate well-informed decision-making during the merger or acquisition process.

  • Self-Employment

    Individuals venturing into self-employment benefit significantly from the guidance of a CPA. CPAs assist in managing self-employment taxes, tracking deductible expenses, and ensuring compliance with tax regulations. A CPA can provide tailored advice on optimizing finances, helping self-employed individuals establish sound financial practices from the outset.

  • Undergoing an Audit

    Facing an audit, whether by the Internal Revenue Service (IRS) or other entities, is a situation where the expertise of a CPA is invaluable. CPAs navigate the audit process, ensuring accurate documentation and representation. For instance, a CPA can liaise with auditors, address inquiries, and work to minimize potential financial implications, providing a sense of confidence and expertise during the audit proceedings.

  • Retirement and Estate Planning

    As individuals approach retirement, engaging a CPA becomes crucial for comprehensive retirement and estate planning. CPAs assess financial situations, optimize retirement savings, and provide strategies for wealth transfer. For example, a CPA may guide individuals in creating tax-efficient estate plans, ensuring the smooth transfer of assets and minimizing tax implications for heirs.

  • Major Life Events

    For individuals, major life events—such as marriage, divorce, or the birth of a child—warrant the expertise of a CPA. CPAs offer financial advice tailored to these circumstances, addressing tax implications and optimizing financial plans. For example, a CPA can assist in updating tax withholdings, advising on joint or separate tax filings, and ensuring that financial plans align with the changing dynamics of major life events.

How Much Does It Cost to Hire a CPA?

The cost of hiring a CPA varies based on factors such as the complexity of services, geographic location, size of the firm, and the CPA's experience. Prices may range from a few hundred to several thousand dollars. While cost is a consideration, the benefits of a hiring a professional in a complex situation often outweigh the expenses, as working with a CPA helps ensure you’re completely the appropriate paperwork in an accurate and timely manner.

Is Hiring a CPA Worth It?

Hiring a CPA extends numerous advantages that go beyond financial management, contributing to organizational efficiency, financial optimization, and overall peace of mind. For those who are simply filing 1040s, paying a CPA might not be worth the price tag—but for those looking for expert advice, there is value in choosing a professional to provide holistic support through strategic guidance and risk mitigation.


Benefits of Hiring a CPA

Though there are many benefits to hiring a CPA, here are a few:

  • Save Time & Money

    A CPA's expertise can save both time and money for individuals and businesses alike. By efficiently navigating complex financial processes and minimizing the risk of errors, CPAs streamline operations. For instance, a CPA's proficiency in tax filings ensures accurate submissions, reducing the likelihood of costly errors and potential penalties.

  • Maximize Tax Benefits

    One of the significant advantages of hiring a CPA is the ability to maximize tax benefits. CPAs possess an in-depth understanding of tax laws and regulations, identifying opportunities for deductions and credits. For example, a CPA may guide a business owner in leveraging available tax incentives, ultimately reducing the tax burden and maximizing financial gains.

  • Risk Management

    CPAs contribute to effective risk management by identifying and addressing financial vulnerabilities. Through thorough financial analysis and audit procedures, they mitigate the risk of financial discrepancies and non-compliance. Consider a scenario where a CPA identifies internal control weaknesses during an audit, allowing the organization to implement corrective measures and fortify its financial systems.

  • Optimized Business Performance

    By offering strategic financial insights and consulting services, CPAs guide businesses towards informed decision-making. For instance, a CPA may analyze financial data to identify cost-cutting opportunities or investment strategies, contributing to sustainable growth and enhanced profitability.

  • Access to Professional Networks & Resources

    Hiring a CPA provides access to a valuable network of professionals and resources. CPAs often have extensive connections within the financial industry, facilitating collaboration and knowledge-sharing. This network can be particularly beneficial for businesses seeking industry-specific advice or individuals looking for specialized financial solutions. For example, a CPA may leverage professional connections to provide clients with insights into industry trends, fostering a proactive approach to financial planning.

What to Ask a CPA Before Hiring Them

Before hiring a CPA, there are several questions you can ask to make sure they’re the right fit for your needs. These include:

  1. Are you a licensed CPA?

    Ensuring a CPA holds an active and valid license before choosing them as a partner is a crucial first step. A licensed CPA is bound by professional standards, demonstrating competence and adherence to ethical guidelines, providing confidence in their ability to handle your financial matters effectively.

  2. What services do you offer?

    Understanding the full spectrum of services the CPA provides is essential. Ensure their offerings align with your specific needs, whether it be tax planning, auditing, or business consulting. A comprehensive suite of services ensures that you can rely on the CPA for various financial aspects.

  3. What is your experience and expertise?

    Delve into the CPA's professional background to assess their experience and expertise. Inquiring about their track record in handling situations similar to yours ensures that you are entrusting your financial matters to someone with a proven ability to navigate complexities effectively.

  4. How do you stay updated with tax laws and regulations?

    The financial landscape is dynamic, with tax laws and regulations evolving regularly. Confirming the CPA is committed to ongoing education and stays current with these changes ensures your financial strategies align with the latest legal requirements.

  5. What is your fee structure?

    Understanding the fee structure upfront is crucial for budgeting and transparency. Inquire about any hidden fees, hourly rates, or retainer arrangements to avoid surprises and ensure that the financial arrangement aligns with your expectations.

  6. Can you provide references or client testimonials?

    Seeking references or client testimonials offers valuable insights into the CPA's track record and client satisfaction. Hearing about others' experiences can help gauge the CPA's ability to deliver on promises and build confidence in their services.

  7. How do you communicate with clients?

    Communication is key in financial matters, especially when concepts may be hard to understand. Understanding the CPA's communication processes, whether through regular meetings, emails, or a dedicated client portal, ensures that you are comfortable with the level and frequency of communication throughout your engagement.

  8. Do you have experience with clients in my industry or situation?

    Industry-specific experience enhances the CPA's ability to address your unique needs. Inquiring about their familiarity with your industry or specific financial situation ensures that they bring relevant insights and tailored solutions to the table.

  9. Are you available for ongoing support and advice?

    Knowing whether the CPA is available for ongoing support is crucial, especially during critical financial decisions or unforeseen circumstances. This ensures a lasting and beneficial relationship beyond initial engagements.

  10. How do you prioritize client confidentiality and data security?

    Protecting sensitive financial information is paramount. Inquiring about the measures the CPA has in place to prioritize client confidentiality and ensure robust data security provides assurance that your financial information is handled with the utmost care and diligence.

Contact Mowery & Schoenfeld to Learn More About Hiring a CPA

Hiring a CPA is a strategic investment in financial well-being. Whether you're an individual seeking tax guidance or a business navigating complex financial landscapes, the expertise of a CPA is invaluable. For those considering the services of a CPA, Mowery & Schoenfeld offers a team of qualified professionals ready to provide tailored financial solutions. Contact us to learn more about how hiring a CPA can elevate your financial strategy.

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