How Your CPAs Should Pay For Themselves
Have you ever received the invoice from your CPA only to open it and say,"Wow, this is a lot of money!"? CPAs spend a ton of time going to school (we have to earn 150 credit hours, which usually requires a five year bachelor program). Then, we have to pass a really hard exam (the CPA exam) which is four parts (approximately four hours each section). The exam can only be taken during certain months in allowed testing windows and all parts must be passed within 18 months of beginning. Even after was pass the exam, we have to earn (buy) continuing education every year to maintain our CPA License. But why would someone paying for accounting care about any of that? As with everything else in life, buyers of accounting services are just looking for the best price.
Well, if you really are shocked when you open the invoice from your CPA, there could be a few things going on. First, your CPA may not have communicated all of the behind the scenes work and hours that went into your finished product. Next, you may have been so busy as a business owner that you didn't stop to estimate how much the costs were adding up to be. If you see your CPA on-site at your office for a certain number of hours, you should be able to do a rough calculation of what the monthly invoice will be. Another way to combat this is to agree on a fixed price up front (which we strongly recommend). The final scenario that could be happening when you experience invoice sticker shock is that your CPA may, in fact be overpriced.
So, how does a CPA pay for themselves? What Are business owners and individuals getting for these high dollar invoices? Everyone has to get their taxes done, right? So it must just be a requirement to fork out hundreds/thousands to a CPA every year, right?
Your CPA should be your go-to oracle for all financial aspects of your business. Over time, they will see how your business grows and changes and they will begin to see how you operate as a business owner. Not only can they help with the complex regulatory and tax issues, but they can also help you forecast into the future. With the right data from the business owner, we can create forecasts to see if you will run out of cash. or, we can create goals and budgets to help you stay on track and meet your objectives.
What you're really paying for in these shy high invoices is information. The information you are paying for should be so valuable that it actively overshadows the cost of the invoice. As crazy and hard to believe as that is, your CPA should be paying for themselves by giving you tools that are more valuable than their cost. The time the CPA invests in your business should be turned into profit.
If you don't feel like this is the case, you should ask your CPA what benefit they are creating for you. If they can't answer that question, maybe its time to ask for a lower price... or maybe it's time to talk to a Remote CPA!