Fitting The Bill How to select a small-business accountant who measures up.

As the end of the year approaches, new goals and dreams for nextyear take shape. But no matter how successful or disappointing 1997was for you, you can't leave it behind yet--Uncle Sam won'tlet you forget. So begins your first business decision of the year:Do you keep your own business records and file your own returns orhire someone else?

"It's very difficult and time-consuming to keep up withall the new tax laws and technical jargon," says PeterPfister, a CPA at Kurchin & Co. in Red Bank, New Jersey."By hiring a professional, the business owner can better usehis or her talents to the fullest and concentrate on growing thebusiness."

It's an important decision; don't make the mistake ofdoing the job badly or hiring the wrong person to do it foryou.

Assuming you've resolved to seek help, you're ready foryour next task: where and how to find a CPA. One of the best waysto narrow your selection is through referrals. These can come fromanyone you trust--a friend or a coworker you respect or yourattorney, banker or chamber of commerce. "Calling your localCPA society or scanning the Web can also uncover goodsources," Pfister says. "If you know your business isgoing to grow, don't wait until you can't handle ityourself."

Conrad Theodore, a freelance writer in Lake Forest, Illinois,has been a home-office entrepreneur since 1993.

Who Qualifies for the Job?

Don't just hire the first person recommended to you.Ultimately, the accountant you'll entrust to handle your mostprivate financial information must be a personal choice. With thisin mind, there are several things you should first consider.

Don't underestimate the importance of a CPA. Those threeletters are awarded only to those accountants who've passed arigorous, two-day, nationally standardized examination. Most statesrequire CPAs to have at least a college degree or its equivalent,and several also require post-graduate work.

Accountants usually work for large companies; CPAs deal with avariety of businesses, large and small. You can only hope anaccountant is well-educated and versed in your particular needs.Passing the CPA examination, on the other hand, speaks volumesabout your CPA's capabilities. And only a CPA can perform someof the tasks you may need handled, such as auditing or certifyingfinancial statements.

Remember, though, that not all CPAs provide the same range ofservices. One may help you with your tax planning, while anothercan give you more in-depth financial counseling. So don't justpick a CPA from the Yellow Pages; talk to several and ask whattheir specialties are.

Perhaps you need help compiling a financial statement. Maybe youneed tax advice or management consulting. With a little research,you'll find that some CPAs are better qualified to handle yourneeds than others. Referrals are the best way to find qualifiedhelp. If you're opening a restaurant, for example, ask otherrestaurant owners for recommendations.

Once you find someone with the expertise you're looking for,find out the size of his or her clientele. For Mark Feldman, agraphic designer in Chicago, this was an important issue. "Ihad been using a firm that was too big for my needs," he says."So I was paying for more service than wasnecessary."

An accounting crisis is not a good time to find out howaccessible your CPA is. Make sure the CPA you hire is willing tospend the amount of time with you that you expect. If theaccountant has some good ideas--but is rarely available to discussthem--you'll wind up frustrated and resentful.

Something for Every Business

A CPA can offer a wide range of services, from basicconsultation to complex strategy construction. Pfister recommendsyou use your time and money wisely when selecting the CPA'sduties. "You don't want the individual to spend his timedoing your payroll when he or she can do far better things foryou," he says.

And don't just hand all your financial documents over toyour accountant and await further instructions; be aware of yourfinancial concerns and make suggestions. Here are a few of theservices a CPA may offer:

• Setting up accounting systems

• Analysis of transactions for business loans and financing

• Auditing, reviewing and compiling financial statements

• Managing investments

• Manage-ment-consulting services on such subjects as benefitplans, compensation plans and data-processing systems

• Planning tax strategies and preparing tax returns

• Minimizing tax liability

• Representing you before the IRS and other tax authorities

The Bottom Line on Fees

CPAs normally base their fees on the time required to performthe services you request. According to the American Institute ofCertified Public Accountants, there are no "feeschedules" common to the profession. It all depends on thetype of service you need, the CPA's level of expertise and thecomplexity of the work required.

Pfister says most CPAs bill on an hourly basis but cautions notto base your decision solely on the fees. "Like anything else,you get what you pay for," he says. "If you hire theright person, the cost may pay for itself."

Select your CPA carefully. By doing your homework now, you canhave a long-term working relationship with someone who can help youavoid problems and meet your financial goals.

When a CPA signs his or her name at the bottom of your taxreturn, you can be confident that a qualified person prepared itaccurately. This should give you the opportunity to put the year torest and start setting higher goals for the future.

CPA Checklist

Ask the following questions before you hire an accountant:

1. Are you a CPA? (Don't assume all accountants areCPAs.)

2. Are you licensed to practice in your state?

3. Where and when did you receive a license to practice?

4. Where did you go to school and what degree(s) did youearn?

5. What is your specialty?

6. Who are some of your clients? (Call some of these clients andfind out if they're satisfied with the service they'vereceived.)

7. How big or small are your clients' companies? (And whatsize were they when you began your relationship with them?)

8. How accessible are you? (Some are only available duringbusiness hours, while others will give you their pager and hometelephone numbers.)

9. To what professional organizations do you belong and howactive are you in those groups?

10. What are your fees? (Ask to see some current invoices.)

Worth Visiting

The American Institute of Certified Public Accountants Web site(http://www.aicpa.org ) provideslinks to news updates, accounting-related software, state CPAsocieties and answers to frequently asked tax questions.

Contact Source

Kurchin & Co., 125 Half Mile Rd., Red Bank, NJ07701-6749, (732) 747-0500