The last person a business owner wants a surprise from is their CPA.
Like it or not, most business owners just want, and expect, their CPA’s to be quietly competent. Sure, they like good news when their CPA can provide it, but they are happiest when they know what they owe and when and the fees for services do not exceed their proposal. Pop a big tax liability or send a bill in excess of the proposed fee and you are skating on this ice.
The problem is that not all business owners provide their CPA’s the information necessary for them to avoid surprises. Even worse, many business owners don’t even know that they are culpable in causing many of the surprises.
Periodically asking a client if there are any new developments that might impact the taxable income or ability prepare the return, review or audit can help but only if the client knows what such developments might include.
I’ve read several articles by CPA’s and advisors to CPA’s on client retention and most dwell on what the CPA needs to do and ignore the client’s role in contributing the demise of a relationship. The harsh reality is that most fee arrangements do not allow for the level of communication and investigation needed to surface issues that can derail a budget or blow a taxable income projection out of the water. The fundamental problem is that clients don’t know what to tell their CPA’s or worse, they hesitate to inform their CPA’s about significant transactions or events because they are afraid that the CPA may tell them.
So, how do we avoid this problem? My self-serving answer is to put someone like me between the CPA and the Client that knows both sides well enough to keep the CPA informed and keep the client’s accounting in good shape so that tax and fee surprises don’t happen. This is the roll of the B2B CFO®. I have my CPA and was a “Big 8” auditor and tax advisor but I also have over 25 years experience as a CFO so I understand what’s needed to avoid surprises. Most importantly I work on as needed basis with my clients and so my fees for providing my CFO services are quite reasonable. The communication with the CPA is just part of the job so its rarely even an incremental cost of the services. For the CPA, you get to keep your good clients and enjoy the realization rates you expect. For the business owner you avoid painful and expensive surprises and you don’t need to interview a bunch of CPA’s every few years.
Sounds like a win-win-win to me.