Proactive or Not? Five Questions to Ask a CPA

Whether you’re evaluating your current tax professional or seeking a new one, it’s important to know what questions to ask a CPA. I’ve compiled a list of five questions business owners can use to find a proactive CPA.

What’s a proactive CPA firm?

If you’re a new business owner, it’s important to know that a CPA license is not a guarantee of any outcome. CPA firms are businesses. Some serve their clients well. Others do not.

Most CPA firms will submit your taxes correctly and on time, but that’s not enough for business owners who want to leverage financial and tax services to achieve business objectives.

Hiring a proactive CPA firm is like adding a tax, accounting, and financial department to your business. Proactives see themselves as partners and will push you to embrace that partnership. If you feel pushed, that’s a good thing.

Here are five practices of a proactive CPA firm:

  • Stays informed and acts on advantageous changes in the tax code
  • Forms close professional relationships as part of their SOP
  • Meets and collaborates with you regularly
  • Adapts to the conditions of your industry
  • Is accessible and prompt in communications

Ready to ask the big questions? Adjust your mindset first.

  • Ask the questions—and keep asking—until you get a detailed answer.
  • Stand up for yourself. Your inquiries are reasonable.
  • Do not accept deflection or condescension. If you feel that you are not being taken seriously, promptly end the meeting.

How to use the questions

Ask the following five questions, and you’ll weed out the bad prospects faster, save time, and get on track to enter a new period of growth and stability for your business.

Small business owners are busy. I’m busy. My clients are busy. This is one of the decisions that takes due diligence.

So here’s a simple rule: hiring any CPA or CPA firm that doesn’t check all the boxes is a compromise. A CPA that checks off all five is ideal and should be at the top of your list.

Top Five Questions to Ask a CPA

Here are five questions you should ask your potential CPA. They’ll help you assess an accountant’s baseline competence and performance and determine their accounting philosophy, including how proactive they are.

There are many factors to consider when hiring a CPA. Business owners tend to focus on cost, which is reasonable. But you need to factor in a “cost-to-competency” ratio to find a CPA firm that can make a positive and actual impact on the trajectory of your business.

1. What’s your experience in my industry, and are you willing to learn?

Every industry has its unique financial challenges. A CPA who has experience working with companies like yours is better equipped to provide you with the guidance you need.

If you’re in the construction industry, and the CPA you’re talking to specializes in entertainment and food service, it’s probably not a good fit.

Follow up: Do you have clients across industries?

A proactive CPA may not have years of experience with companies in your industry. That’s okay as long as they have a diverse client base. A diverse set of clients shows that the CPA you’re talking to can adapt to different industries.

It’s rare to find the perfect fit. A flexible, agile firm is just as capable of delivering outstanding results as a highly specialized one (and is likely less expensive.)

2. What is your process for tax planning and preparation?

Tax planning and preparation are critical responsibilities of a CPA or CPA firm, so dig into those tasks when asking questions.

It’s essential to have a CPA whose strategies align with your needs. Some CPAs will be more aggressive than others. Businesses that are looking to grow quickly will want to partner with a CPA who looks for every available tax credit and deduction, potentially saving you tens of thousands of dollars per year.

Year-round work matters

It’s also important to have year-round access to a CPA firm or CPA year-round. That’s how tax planning gets done. If your tax professional only operates during tax season and coasts the rest of the year, they lack the commitment to stay up-to-date with the tax code and will struggle to apply it to your specific needs.

3. What upcoming changes to tax law could impact my business?

A proactive CPA will be aware of yearly changes to the tax code. They’ll be able to provide you with a financial plan that includes the most up-to-date regulations.

You want a CPA who is forward-thinking. Make sure the firm you’re looking at isn’t just organized and communicative but on the cutting edge of how to use the tax code to your advantage.

The most recent change to the tax code, the Inflation Reduction Act of 2022, was around 500 pages. Give it a quick read here. I have, and so have other competent CPAs.

4. How many IRS audits have you handled?

Let’s say a friend or fellow business owner refers you to a “tax professional.” Ask them about defending your return in the eventuality of an audit. A CPA will say, “Of course I have; I’m a CPA,” or “Yes, I can handle IRS audits. But for my clients, audits are rare.” A non-CPA will say, “none.”

Here’s where it helps to have a Certified Public Accountant (CPA) instead of a tax professional or accountant without a CPA license. CPAs have the credentials to represent clients “on any matters” with the IRS, “including audits, payment/collection issues, and appeals.”

Having said that, if a CPA firm is defending audits left and right, perhaps they lack diligence or are too aggressive, drawing the ire of the IRS.

5. How do you communicate with your clients?

Communication is necessary for any business relationship, but when it comes to tax, accounting, and financials, communication must be precise, consistent, and thorough. There’s too much at stake. Make sure you choose a CPA firm that holds itself to a higher standard of communication, a firm that is responsive, accessible, and easy to work with.

Expect consistent contact and regular meetings

A proactive CPA will contact you throughout the year, not only during tax season. I’m talking about quarterly meetings at a minimum. For tax and accounting, it’s monthly.

Small business owners need answers to financial and tax-related questions. Make sure the CPA you’re considering is available and willing to field your concerns. So ask a potential accountant if you can call them when an issue arises. The response should be “Yes.” Hear a hint of reservation in their voice? Move on.

Remember: As CPA firms, we provide you with a service. You pay us. So if you feel you’re treated as a burden, allow three strikes for employees and one for leadership.

A quality, proactive CPA will be available and happy to return calls or emails within a reasonable timeframe.

To find the right CPA, ask questions and follow up.

By asking substantive questions, you can ensure that you choose a CPA who empowers you to grow your business. Be confident in your selection, and remember that a good CPA is an invaluable asset for strategies and leadership that drive stable, sustained growth.

Am I a proactive CPA? Test me.

I’ve built a successful CPA firm by staying proactive and forming constructive client relationships. Of course, it’s me who says that. It’s our website that says the same.

My firm has won awards, and I have 5-star online reviews on all the platforms where people review businesses. According to our CPA firm, we’re a proactive CPA firm.

Who cares?

Test me. Ask me the top five questions to ask CPA. Go for details. Demand proof. That’s a responsibility you owe to yourself and your employees.

To schedule a discovery call, click here.

Talk soon,
Jeremy A. Johnson, CPA

Meet the Author
Jeremy A. Johnson, CPA, is an expert in strategic tax planning, accounting, CFO services, and thought leadership.

Jeremy writes for small business owners who need actionable information on tax strategy, efficient accounting practices, and plans for long-term growth.

More about the firm