Wolf & Company

For many entrepreneurs, modern may not be the first thing that comes to mind when thinking about accounting, but technology has made good accounting and financial management more accessible to early-stage companies than ever before. While there are a lot of great resources, it’s critical to use a technology that is appropriate for your company and stage of growth.

For many early-stage companies, excel is still a valid option, particularly for those in the pre-revenue stage. However, once you start generating revenues, have employees, or more than a handful of transactions a month, you will quickly outgrow excel. Typically, start-ups move to a platform like QuickBooks Online or Zero, where you or a member of your team can enter and track your results. Keeping these tasks in-house helps to manage costs while the volume of transactions is still manageable.

As volume builds and accounting becomes more time consuming for your team, you’ll look for ways outsource these accounting tasks to a strategic partner such as a contract bookkeeper. These providers will be responsible for inputting all day-to-day transactions and will often help in the development of internal controls. A good strategic partner will provide the information that drives decisions by providing your team with monthly financial results and access to dashboards summarizing financial metrics relevant to your business – such as revenue per customer, cash balances and receivables that need attention.

Fundamentally, a CPA should be leveraging technology for one reason – to improve client service. So regardless of whether that service is audited financial statements or a corporate tax return, the key elements of good client service are the same:

• Efficiency – an efficient CPA is a cost effective CPA. A CPA achieves efficiency by leveraging certain core technologies including paperless workpapers that facilitate information sharing across teams. File sharing technologies allow for easy and secure transfer of data and eliminates duplicate requests. Use of data analytics tools allow a CPA to ferret out key information and make their work more targeted.
• Quality – the CPA’s work product must be of the highest quality to stand up under the scrutiny that comes with the client’s most critical business events. Does the CPA subscribe to robust technical resources in their areas of expertise? Do they use similar tools to stay up to date on important industry trends impacting their clients’ businesses? Commitment to these types of technologies evidence a CPA’s commitment to quality.
• Data security and privacy – Clients share some of their most sensitive data with their CPAs. This is an area where it is critical for CPAs to use the most up to date technology. Beyond pure technology solutions, the CPA must commit the time and effort staying up to date on data security and privacy practices. Unless a CPA is aware of the ever-changing threat landscape, technology alone is not going to protect the sensitive information.

Do you have clients like me?
Choosing a CPA that focuses on your specific industry and sector plays an incredibly important role in the client experience and the results. Make sure to ask what experience a firm has in your industry/sector.

What types of resources do you have to fulfill my needs, as my business gets larger and more complex?
By taking in venture capital, you are saying that you are ready to get big, and to do it quickly. To do this successfully, you need to ensure that your CPA firm has the bench strength and expertise to see you through all the phases of your business, from start-up to exit or IPO.

How do you bill for your services?
Price is important, though the adage “you get what you pay for” still applies. Does the firm offer fixed pricing for their services or is it based on hourly rates? If based on hourly rates, what are the standard hourly rates and how often do those rates change? If the service takes longer than expected, what is the likelihood of an additional billing?

How can you add value to my business?
Over the years, there has been a shift where many of the services offered by accounting firms are viewed as a commodity. There is something missing in that mindset. The ability to tap the expertise of a CPA with deep experience in your industry can make the difference between a compliance-only relationship and a value-added one.

Your expectations for your CPA should go well beyond simple technical competence. That much is given.

First, you should expect your CPA to be responsive. Do they return calls and emails timely? Do they meet agreed upon deadlines?

Next, you should expect to have access to decision makers. Accounting firms are shaped like a pyramid with lots of less experienced staff at the bottom and fewer highly experienced people at the top. But the buck stops at the top so can you get the partner on the phone to answer your time sensitive questions? When you speak with them, can they actually make decisions or is there a “national office” where the real decisions are made?

Your CPA may not understand the science behind the cancer treatment you are developing or the code underlying your SaaS offering. But you should expect your CPA to have industry-specific knowledge that they can use to give you tailored advice. Similarly, you should expect your CPA to have worked with companies like you – size, stage of development, funding status, etc. A CPA who has worked with companies like yours before can help you “see around the corner” with forward-looking guidance.

Finally, don’t underestimate the importance of a personal relationship with your CPA. You will be much more inclined to tap the expertise of your CPA if you have a personal connection with them. So your CPA should be willing to put in the time and effort to establish a personal relationship with you.