When it comes to looking for a Certified Public Accountant for Contractors, the search can be tedious and long. More than likely, you might go through a few proclaimed contractor accountants before landing the “right” one. It’s not uncommon for a contractor to have a CPA turnover ratio of one certified public accountant for every two years.
Therefore, the purpose of this article is to help you with this search and help you identify the best contractor accountant for your contractor business. Below are three things to look for when interviewing your next contractor accountant.
Knowledge of the Industry – This is apparent, but the question remains on how to approach this without making the experience feel too much like in an interview. The best practice is to approach this conversation as you would any other sales meeting that you have with your customers, but at the same time being keenly aware of the questions that this contractor accountant is asking. Here are some key questions that your potential CPA should be asking you:
- How long do your projects usually last?
- What do your work in process schedule look like?
- What states do you have a contractor type license?
- Do you have a line a credit/if so how much?
- Do you have a banking relationship? With who?
- What does your backlog look like?
- Any bonding?
- Are you going to need attest services (compilation, review, audit)?
- How are cash reserves?
Do they want you to make estimated tax payments? – You should ask your contractor accountant how they feel about estimated tax payments. If they are insistent on that this is something you SHOULD be doing, then this should be a red flag. Contractor accountants should know that cash is everything in a contractor type business and that business is cyclical oftentimes. Generally, it’s best practice for a contractor type business to wait until necessary to pay-in because it all it takes is ONE bad project to be in a cash crunch.
Do you like them? – This is meant to be a fun point, but it does hold true. Contractors are special type of people, they are unique from other types of businesses in the same way that you expect Silicon Valley tech gurus to be different than your ordinary Joe. Really pay attention to this one, Contractors cannot afford to move slow, Contractor license applications in comparison to renewals is night and day. Therefore, there are going to be times that a Contractor business is going to be very demanding when it comes to their needs. Does the potential CPA contractor know this? Do they understand this? Do they have the personality to handle this? Do they cringe when you talk direct and honest? Not every accountant is made to service Contractors. Contractor accountants need to be able to take the hits, but also give them in good manner. In my experience, this is what builds trust and lasting relationship when it comes to contractors and their accountants.
JAG CPAs & Co. specializes in serving contractor type businesses, for more information just email firstname.lastname@example.org or give us a call at 713-234-5112.