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How do you find the right CPA for your startup?

Posted on 27/12/2023

There’s no one-size-fits-all method for choosing a startup CPA. There are six characteristics to look for to ensure a good match.

Startup expertise:

Startup CPAs should understand regulatory issues, paperwork, and investor or board reporting. They should also accurately calculate and track startup KPIs like burn rate (how fast you’re “burning through” your startup money each month) and cash zero dates.

R&D tax credits and startup tax incentives should be well-known to your CPA for tax planning. As a venture-backed startup, your CPA must understand fundraising and capital management to handle your financial statements.

Is your startup in New York or San Francisco, where regulations and legislation are more complicated? If so, your CPA must monitor government filings and deadlines.

Vertical industry expertise:

A CPA should have worked with businesses in your industry. They should know your industry’s financial modelling, tax requirements, and reporting. They should also understand your internal processes and other details to reduce tax liabilities and IRS audits.

Seek solutions and opportunities:

CPAs are useful beyond tax filings and bookkeeping. Find a CPA to advise you on financial and company success. Do they keep up with current technology and techniques to deliver the finest service? Do they grasp your particular issues and create opportunities for success?

Quick replies:

How responsive would your CPA be in an emergency? Ask about their contact hours and average response time during your free consultation to assess their handling of time-sensitive accounting requirements. Move on if your CPA is slow to respond or you have to keep asking questions.

Accounting software knowledge:

Check that your prospective CPA can use accounting software like Xero, QuickBooks, or Bench (that’s us!). This is crucial for vertical-specific software. SaaS startups have distinct financing toolkits compared to mobile app companies. If your CPA is experienced with the software, they can examine cash flow, inventory, and pricing right away.

Reasonable fees:

Some business owners delay hiring a CPA to save money, but the proper one is worth it. Find a CPA or accounting firm that offers fixed monthly costs so you can set your budget and obtain transparent pricing that shows how your bill will change as your startup grows.

Because your CPA will handle sensitive business data, you must ask the correct questions before hiring them to avoid disappointment

Our Bookkeeping Experts are here to help.

Topics: Tech Tips




About the Author:

Pramod has over 11 years of experience relating to finance and accounts in diversified industries. He is an expert in resource and process optimization resulting in greater operational efficiencies.

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