One of the first questions that a business owner asks is: How much does a CPA firm cost? Although this is a difficult question to answer, we will do our best. As you can expect, your fees can range greatly based on the nature of the services you need, among other factors.
The purchase of a CPA firm’s services should not be taken lightly. While the price you pay is important, even more important is the value you should expect to receive. We believe that the following are key components of making your decision:
- Is the firm responsive? Do they measure client satisfaction and responsiveness?
- Am I going to be surprised? Does the firm have a formal year end planning process so that I know what I should expect to pay to the IRS?
- Does the firm have a good working relationship with local banks, attorneys, and wealth managers that I work with so that I know that my advisers will have good communication?
- How does the firm work with me to help me gain access to credit and capital when I need it?
- Can the firm offer practical business advice to me? If they can, how?
If you aren’t looking for any of the above, you can probably go with the lowest cost provider.
However, if you are looking for a relationship that can deliver on the five elements above, the following are key determinants of what you should expect to pay.
Generally, a middle market company with over $2m in sales should expect to pay between 4% and 6% in revenues to its ‘accounting and finance’ function, which would include a CPA firm. How much you pay the CPA firm starts with the quality of your internal accounting team. If they are good, you can expect to pay the CPA firm less as the CPA firm is starting with good information. If you are currently paying less than this, you are probably leaving something on the table that could help you make more money and boost your cash flow / focus on top-line growth. Other factors to consider:
- How formal do I want my relationship to be – should I have formal meetings or is once or twice a year good enough?
- Do I want timely advice from my CPA? (this usually means getting into a habit of sharing goals and financial information on a periodic basis)
- What else would I like help with? Items might include development of key performance indicators, benchmarking, business valuations, and succession planning, among other services.
While this list isn’t all inclusive, we have generally found that these are the most important considerations.