How To Choose A Trusted Advisor

There’s an old proverb that says plans fail because of lack of counsel; but with many advisors plans will succeed.  Applying that suggestion to business, in order to be successful as an entrepreneur, it is necessary to seek and receive good advice.

A crucial early step in having a successful business, therefore, is building a team of advisors that you can count on to give you insightful, objective, and timely advice.  Not getting good advice is falling prey to the well-known cliché of “you don’t know what you don’t know”.  The result of proceeding ignorantly usually results in something that can bite you in the rear under the right (or should I say wrong) circumstances.  You might not even know it’s biting you – as in paying more taxes than you are legally required to.  In worse situations you DO know because an IRS auditor is knocking on your door or you’re hit with a lawsuit that could have been easily avoided with proper legal agreements!  NOT FUN!

One important advisor is a CPA (certified public accountant).  CPAs’ strong financial background and knowledge of complex tax and financial rules make them some of the most trusted and relied upon professionals.  They are required to obtain significant amounts of education, pass a rigorous exam, and then continue taking training to remain current with standard practices and continually changing laws.  This talent can prove invaluable to entrepreneurs and their businesses.  Additionally, CPAs who have been practicing for many years can provide common sense insights from experience that will allow you to make a better informed decision.  For these reasons CPAs often become trusted business advisors – vital partners in growing your enterprise; someone you can bounce ideas off of in regards to your business and personal endeavors (and not just about taxes).

So what should you look for when choosing a CPA?  Here are a few quick tips:

  1. Make sure he or she is actually a CPA with a good reputation.  Being certified doesn’t guarantee the CPA is any good, but it does tell you the person has met some pretty tough minimum standards set by your state’s board of accountancy.  You can usually look up a CPA via your state board’s website.  CPAs also ascribe to a strict code of ethical standards.
  2. Are they experienced?  The best way to find out is to ask the CPA.  Let the CPA explain their professional experience and how it pertains to what you are trying to accomplish.  Ask for referrals.
  3. Seek out a CPA with the heart of a teacher.  Tax law and business problems can be extremely complex, but at the end of the day it’s YOUR money and YOUR future on the line.  YOU have to make the final decision.  Shouldn’t you understand what you’re deciding on?  It may sound crazy but there are many CPAs who don’t like to be bothered with educating their clients.
  4. Be sure your CPA is proactive and worried about your best interests.  This may go without saying but your CPA needs to be PROactive and not REactive.  “Proactive” anticipates problems, carves out plans and solutions and usually saves you money and heartache.  “Reactive” merely responds to problems that evolved by not anticipating them and usually costs money and heartache.
  5. Choose the right size.  There are one man shops, multinational public accounting firms, and everything in between.  You need to choose the right size CPA firm.  You need one with the appropriate depth of resources, infrastructure, and experienced professionals to help you start, grow, maintain, and finally transition out of your business.  Consider where you are now.  Where would you like to be in 10 years?  20 years?  50 years?  The right size firm can help you get there.

Choosing the right CPA is only one step.  You will eventually have a team of advisors: the CPA, an attorney, banker, insurance agent and others who should work together to help you in your business.  Good CPAs usually have a network of trusted professionals to help their clients find success.  Do not think you need to be bigger before you start assembling your team.  Start now by finding a CPA!

Brian Mullen – is a Tax Manager at Wertz & Company, LLP, a Professional Services Firm located in Orange County, CA that specializes in working with entrepreneurs along their journey to success.