It is common for CPAs and accountants to practice as solopreneurs; however, this creates problems for clients when their trusted advisor is no longer around. So what do you do if your CPA closes the doors or is no longer responsive?
First, assess the situation
Losing your Certified Public Accountant (CPA) can be unsettling, but it's essential to approach the situation with a clear plan. Start by assessing why you lost your CPA. Did they retire, pass away, or was there a breakdown in your professional relationship? Understanding the root cause will help you make informed decisions moving forward. While change is hard, especially if it was not initiated by you, ask yourself, “What does this make possible?” This forced transition may allow for a better relationship or better service going forward.
Next, prioritize finding a replacement
Remember, not all CPAs and accountants are the same. There are many unique personalities, skill sets, and service offerings. Really get clear on what you liked and what was lacking with your previous accounting professional relationship. Here are a few practical ways to get started in your search:
- Ask for Recommendations: Seek recommendations from trusted friends, family members, or business associates who have worked with reputable CPAs.
- Check Credentials: Ensure that any potential replacement is a licensed CPA with the necessary qualifications and experience.
- Conduct Interviews: Schedule consultations with prospective CPAs to discuss your financial needs, assess their expertise, and determine if you have good chemistry.
- Review Your Financial Situation: Provide comprehensive information about your financial situation, including past tax returns, business records, and any specific challenges you're facing.
- Request References: Don't hesitate to ask for references from their current or past clients to gauge their reputation and professionalism.
Third, organize your financial records
During the transition from one CPA to another, it's crucial to organize your financial records diligently. Gather all relevant documents, such as tax returns, receipts, financial statements, and any ongoing contracts or agreements. This will help ensure a smooth handover and minimize disruptions in managing your finances. “But wait, my prior CPA has all my records, and I no longer have access.” Don’t worry. Tax returns and formation documents can be requested from the IRS or the government entity where they were originally filed. While it does require some extra effort and time, all is not completely lost.
Finally, communicate effectively
Effective communication is key during this transition period. Even though CPAs and accountants get a bad rap for being poor communicators, here's how to ensure a seamless handover:
- Facilitate the Transfer of Records: Work with both your previous CPA and your new one to ensure the transfer of all necessary financial records and documents whenever possible.
- Share Your Goals and Expectations: Clearly communicate your financial goals, expectations, and any specific concerns with your new CPA to establish a strong working relationship.
- Stay Informed: Stay involved and stay responsive to requests in the process. Ask questions and stay informed about the progress of your financial matters during the transition.
Losing your CPA doesn't have to be a daunting experience. Your best next step is to take action. Don’t wait until the next deadline or a requirement from your banker is due. Prioritize finding a CPA firm you can trust to meet your tax and accounting needs.
At Dillon Business Advisors, we implement a Team of 3 accounting, tax, and advisory professionals in small businesses to mitigate the effects of CPA turnover for our clients. We would love the opportunity to show you how a team approach to your business accounting, tax, and advisory is the proactive solution you have been looking for.
