Another Accountant Counts The Ways

Earlier this week, an accountant from Texes sent a letter to Dear Abby suggesting ways that clients can "help out" during tax season.

I couldn't disagree with this accountant more.

Here's my response:

Dear Abby,

As a CPA, I was horrified when I read the letter from Sleepless in Texas (03/26/07), the accountant who listed ways to help out during tax time.

I encourage your readers who recognize their CPA in that letter to change CPAs at once. There are plenty of CPAs who enjoy their work, enjoy their customers and organize their accounting business so that they are well rested and alert to provide the best service.

I propose the following ways to help out during tax time:

1. Do feel free to drop by anytime. You are always welcome in our office. We hope you feel it is a place where you can get things done, solve your problems and gain peace of mind. If your primary CPA is not available, you can meet with one of our other highly qualified Team members.
2. Tell us about your children, family, business, hobbies, etc. The more we know about you the better we can serve you and provide you with appropriate advice and solutions. Arrange to come in more than once a year. The most valuable service we offer is proactive planning.
3. Be honest with us up front regarding your budget for professional services. That way, we can design a fixed price agreement to suit your needs before work starts.
4. Encourage your family, friends and colleagues to call us if they need help. Referrals are the best way you can thank us for a job well done.
5. If you have a question regarding the financial consequences of a decision you are trying to make, call us. After all, your fixed price agreement includes an annual consulting agreement to discuss such matters. Of course, if your questions require additional research and analysis, we will issue a change order and provide you with up front pricing for the additional work.
   
   Sincerely,
   
   Well Rested in California

To read the original letter from Sleepless in Texas, visit:

http://www.uexpress.com/dearabby/?uc_full_date=20070326

If this link is no longer available, I can send you a copy of the letter from Sleepless in Texas.

WHAT IS AN FPA?

In last week’s blog, I mentioned that business owners might want to consider including unlimited assistance in hiring bookkeepers and consultants as one of the services in the annual FPA you have with your CPA.

At this point, you may be asking yourself, “Just what is an FPA?”

I discussed FPAs as part of my November 29, 2006 blog on year end planning. I think it’s time to re-visit the topic.

An FPA is a Fixed Price Agreement between a customer and his/her CPA.

Through the use of an FPA, you can set the price and payment terms of your accounting services for the year. Further, the FPA will define the scope of services to be provided by the CPA and include any responsibilities of the business owner. In addition, the FPA should include the CPAs service guarantee.The advantages of an FPA are numerous.

• The business owner is relieved of any uncertainty regarding the amount of his/her accounting bill.
• The business owner can manage cash flow according to the payment terms of the FPA.
• FPAs break down the barriers of communication between the business owner and the CPA.
• The service guarantee provides the business owner the comfort that he/she will receive the quality of service he/she deserves.
• The business owner is free to attend to other aspects of his/her business.
• Payments to the CPA can be set up as memorized transactions in the accounting system.
• The FPA typically includes ongoing access to the accounting, tax, and business advice the business owner needs on a fixed-price basis. The business owner is not inhibited from seeking timely advice by the fear of a clock running endlessly. This offers the business owner access to the accumulated wisdom of the firm through CPAs with substantial experience who can help enhance the company's future and achieve its business goals.

So the next time you need professional services from your CPA, sit down and negotiate the service and pricing terms ahead of time, and have them documented in an FPA.
Your CPA has sample FPAs on the Cd that came with his/her copy of the Professional’s Guide to Value Pricing. Samples if simple FPAs are available in the Resource section of the Verasage web site. www.VeraSage.com

SELECTING A BOOKKEEPER

A company needs its own bookkeeper to keep track of the day-to-day transactions of the business, complete monthly, quarterly and annual reconciliation procedures and assemble the financial package for the CPA. Competent bookkeepers can be hard to find. According to Stephen Sahlein, co-president of the American Institute of Professional Bookkeepers (AIPB), most bookkeepers lack the knowledge needed to fulfill their function. Consequently, your business may be at risk.

You cannot always ascertain a bookkeeper’s ability and skill level from a resume or interview. There is a way to make sure that the prospective bookkeeper knows basic bookkeeping – Administer the FREE hiring test available from the AIPB. The test consists of 10 questions on key everyday bookkeeping skills. Applicants cannot obtain the test beforehand, because each 10-question test is drawn from a databank of 250 items.

If your prospective bookkeeper is competent or holds a Certified Bookkeeper (CB) designation from the AIBP, she/he will have little trouble successfully completing the test.

For more information about the AIPB, visit: http://www.aipb.org/index.php

For more information about the FREE hiring test, visit: http://www.aipb.org/testrequest.php

You may also want to consider having your CPA include the following line in your annual FPA:
“Unlimited assistance in hiring bookkeepers and consultants.”

SELECTING A CONSULTANT

Small businesses often lack the internal resources needed to complete major business projects, and look for an outside consultant for assistance.

Such projects include:

• Preparing budgets, business plans and cash flow projections
• Creating a marketing plan and conducting the related campaign
• Making major IT improvements or even just monthly IT maintenance
• Tax returns
• Developing an employee manual
• Employee benefits packages
• Customer Advisory Boards
• Team Advisory Boards
• Towards Awesome Service Training
• KPI monitoring
• Phone Right
• Strategic Planning

Small business owners and managers can get the best results from their consultants by asking themselves 10 simple questions. See The Consultant Customer’s Bill of Rights at:
http://www.verasage.com/index.php/resources/the_consultant_customers_bill_of_rights/