How Should the Business Owner Work With a CPA or CPA Practice?
Some firms offer financial advice and other services, but many CPAs have little or no Chief Financial Officer (CFO) expertise, other than as possibly the managing partner in the firm itself.
Since the business model is not suited to a weekly or similar visit, they never learn the specific in's and out's of their clients business. They don't really know the cash flow management issues, the full profitability analysis (aside from the standard balance sheet/income statement ratios) and other planning issues.
Thus the CPA can't act as a full-blown advisor, since they are not intimate with the inner workings of the company. CPAs are best used to gauge the company's attention to Generally Accept Accounting Principles (GAAP) and Financial Accounting Standards Board (FASB) pronouncements, as well as IRS rulings then to provide CFO services.
Lastly, it is not the CPAs role to create your balance sheet, profit and loss statement and statement of cash flows, that's the responsibility of your CFO. The CFO is there to forecast, the CPA analyzes what has happened.
Understanding the aforementioned makes the relationship between the business owner and the CPA easier. Picking the right firm is like picking any other advisor; expertise in the given industry if possible, personality of the point person at the CPA firm and of course, cost.
