Do you have a CPA working for you? Maybe you believe that that fancy title and status guarantees that all of your accounting and tax-filing bases are covered. But I’ve been in the business long enough to know that there might be some things your CPA isn’t doing for you.

The thing is, lot of the time, these are things that clients assume CPAs are doing are being covered, but they are NOT.

When I worked in the corporate world, I worked for various CPA offices all across the country, and they targeted a wide variety of niches.

During that time I managed 10-20 recurring accounts.  But I also ended up doing additional tasks, like building their business operations and selling annual 30K sales contracts. In addition to those extra tasks, I frequently created marketing strategies and took on HR work. 


I created these additional positions at each office because I saw gaps in how they were running their business. Now that I have my own company, I can see the gaps in their work. 


I still work closely with CPAs now, but in a much different capacity.  As a service for my clients I do Tax Mapping, where I check my numbers against theirs. That means that now, I’m the one checking the CPA’s work.

What Your CPA Isn't Doing For You

Believe it or not, one year I had to replace FIVE of my clients’ CPAs. Crazy, right?

Here are some of the most common reasons why this happened:

  • There was no communication from the CPA
  • Their CPA forgot to file their taxes or forgot to file an extension for taxes
  • The CPA worked fine, up until the work got too complicated
  • They had a CPA who didn’t actually do the bookkeeping, they adjusted it as necessary to file taxes

Translation? Several of my clients’ CPAs were making some costly mistakessometimes to the tune of $40,000!

Not only have I caught 40K mistakes resulting in 20K in saved taxes, but I’ve also rebuilt books with 150-250K variances. We’re talking about books that had errors such as a P&L report saying that a client had a profit, but they actually had a loss. That means some of my clients getting were getting tax bills for money they never made!

So, why do things like this happen? Shouldn’t CPAs know what they’re doing and not let such egregious errors get past them?

These sorts of mistakes frequently happen because the CPA didn’t have the time to do the bookkeeping correctly, and took too many shortcuts just to file taxes on time.


Here’s the deal. If your CPA feels rushed, if they don’t have enough team members to delegate to, or if they have no internal controls (i.e. a team structure to review work along the way), they could be making some costly mistakes.

What’s more, if you don’t have a second opinion on your taxes or accounting, you might be missing something, too.

Some potential clients come to me with a gut feeling that there is “something missing” in their CPA’s work. Others think their CPA has them totally covered them because they don’t know what they don’t know. (And after all, they’re a CPA, right? Shouldn’t they know what they’re doing?)

Here’s the long and the short of it: your CPA is simply doing what you hired them to do, but nothing more.  

Here’s what I mean by that…

If you go to your CPA with messed up books, they will use those messed up numbers to file your taxes. And you most likely won’t know the difference!

The thing is, too many of us to to our CPAs thinking that they’ll take care of bookkeeping disasters before they file your taxes.

BUT, here’s what actually happens when you give your CPA messy books:


1-Your CPA will file your taxes on data you gave them. If you don’t hire a CPA to ensure that your bookkeeping is accurate, they won’t check it. There is even a disclosure you sign that says so!

Your CPA might move some figures around or cross-reference some things. But a majority of the numbers they use will be based on how accurate your accounting is.

Pro Tip: Wondering how you’ll know that they’ve checked your bookkeeping for accuracy before they file your taxes? You’ll see the bill for it!


2- In the event of missing data in your books, your CPA will file based on a percentage of what you did last year. If your CPA doesn’t have data for certain areas in your books, they will likely just plug in numbers based on your past numbers to fill in the gaps.  (For example, have you ever not tracked your mileage or made charitable donations, but you still see both of these things on your taxes?)

Bottom line: if your CPA is adjusts your books but doesn’t do the actual accounting, your books will be incomplete. And you can’t plan anything on incomplete books. Except maybe paying more taxes, of course!

Then, there’s the flip side. Let’s say that it’s obvious that your books are a mess. If your CPA can’t verify your data year after year, they’ll have no choice but to go into extreme last-minute organization mode to get your taxes filed on time. That sets your CPA up for all kinds of potential errors.

If your bookkeeping situation is that extreme, your CPA might fire you as a client because the risk for them is just too high.

Honestly, that situation isn’t much better because it leaves you with no tax help at all!

Now, don’t get me wrong–I’m not here just to call out CPAs! I actually have a lot of respect for them. I partner with an amazing CPA in my company, and I love my personal CPA. They’re a necessary part of my team, and I need them both personally and professionally.

What I dislike is seeing people default to the CPA without question. This happens all the time, mostly because clients don’t know what to ask. And if they do ask questions, clients frequently don’t understand the answers because of all the accountant jargon.


Believe it or not, I used to BE that person, the one that deferred to the authority of a CPA without question. This is why I’m so passionate about this. 


Even as an accountant I used to tell myself they, the CPA, knew best. I didn’t check their work, and I didn’t ask questions. That is, until one day a client of mine got into some legal trouble over filed tax returns. And it turns out the errors were on the CPA–and I didn’t check their work. Just trusted them implicitly.

I vowed never to make that mistake again, for my clients or myself. So NOW, I ask questions, and I check their work.

Remember, your CPA works for you. Don’t be afraid to ask questions and get a second opinion if you need one!

Now, I get it that you don’t know what you don’t know. So, what kinds of questions should you ask? Start with these 6 simple questions.

6 Important Questions to ask your CPA:

  • How do you verify my income and expenses?
  • What does your team structure look like? 
  • How often are you in touch and whats the best way to get a hold of you?
  • Can I have my accountant review the drafted return before you file?
  • Will you email me a copy of my extension, should I need one?
  • When do you need my data by?

Start here. Keep the lines of communication open. Don’t be afraid to ask questions.

Remember, your CPA works for YOU!

Until next time,


Love, light, and MONEY, Honey…

Kaylee

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