Choosing an accounting firm is difficult because most of what distinguishes them is invisible until you are already a client.
Technical competence is close to a given among licensed firms. What varies enormously is who actually handles your work, how quickly an ordinary question gets answered, and whether anybody raises something before you ask.
This covers the questions worth asking before you engage anybody, what good answers sound like, and the signals that should end the conversation.
Hiring a CPA firm is a significant relationship, you are trusting them with your financial records, tax returns, and sometimes your most sensitive business information. Asking the right questions before you sign an engagement letter saves you from expensive mistakes and misaligned expectations.
10 Questions to Ask Before Hiring a CPA Firm
1. Is the firm and the person handling my account a licensed CPA?
The CPA designation requires education, a four-part exam, and ongoing continuing education. Verify the license at your state's Board of Accountancy website. Not every person at a CPA firm is a CPA, bookkeeping staff may not be licensed. Know who will actually work on your account.
2. What is your experience with my industry and entity type?
A CPA who primarily serves retail shops may not know the nuances of a SaaS startup or a real estate holding company. Ask specifically about their experience with your industry, your entity type (S-corp, LLC, C-corp, partnership), and your revenue stage.
3. What services are included and what costs extra?
Many CPA firms quote for a specific service (business return only) and then charge extra for bookkeeping cleanup, amended returns, IRS correspondence, state returns, or payroll. Get a clear scope of services in writing.
4. What is your pricing model?
Hourly, fixed-fee, or value-based? Fixed-fee is more predictable for most clients. If a firm refuses to quote a flat fee and only bills hourly, build in budget cushion, hours almost always exceed estimates.
5. Who will actually work on my account?
At many CPA firms, the partner sells the relationship and a junior staff member does the work. Find out specifically: who will handle day-to-day questions? Who reviews my return before it is filed? Can I reach the partner if I have an urgent question?
6. What software do you use?
Most modern CPA firms use cloud-based software: QuickBooks Online, Xero, or Drake/Lacerte for tax. If they ask you to send Excel files or paper records and they are not cloud-native, ask why.
7. Do you do proactive tax planning, or only tax preparation?
There is a big difference. Tax preparation is backward-looking: filing what happened. Tax planning is forward-looking: structuring decisions to minimize future liability. The best CPA relationships include both. Ask specifically: when will we meet during the year to talk about planning opportunities, not just after year-end?
8. What is your communication turnaround time?
CPA firms are notoriously slow to respond, especially during busy season (January-April). Ask specifically: what is your average email response time? Do you have a client portal? Will I get a dedicated contact, or go through a general inbox?
9. Can you represent me in an IRS audit?
Only CPAs, attorneys, and enrolled agents (EAs) can represent taxpayers before the IRS. If the firm says they can prepare your return but not represent you in an audit, that is a limitation worth knowing.
10. Can you provide references from similar clients?
A firm that declines to provide references should make you pause. References from clients in your industry, at your revenue stage, and with similar complexity give you the most relevant insight.
Ask who will actually do your work and how quickly they answer an ordinary question. Technical competence is close to a given among licensed firms. Responsiveness is where the relationships genuinely differ.
Abhinav Gupta, CPA, CA, MBA · LinkedInRed Flags: Walk Away If You See These
- No engagement letter: any serious CPA firm issues a written engagement letter before starting work. If they do not, there is no clarity on scope, fees, or responsibilities
- Guaranteed refund: no ethical CPA guarantees a specific outcome before reviewing your facts
- PTIN not shown on your return: all paid tax preparers must include their Preparer Tax Identification Number on your return. If it is missing, ask why
- Vague pricing: 'we will charge what is fair' is not a pricing model
- No continuing professional education: CPAs are required to complete CPE to maintain their license. Ask when they last did education in your specific area
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Frequently Asked Questions
Should I use a local CPA or an online/remote CPA firm?
Either can work well. A local CPA offers in-person meetings, which some clients prefer. A remote CPA firm specializing in your industry may provide more relevant expertise and competitive pricing. The most important factors are competence, communication, and fit, not geography.
How much should a CPA cost for a small business?
Business tax return preparation: $1,000-$5,000+ depending on complexity. Bookkeeping: $300-$3,000/month. Full-service accounting (bookkeeping + tax + advisory): $1,500-$5,000/month for mid-sized small businesses. Prices vary significantly by market and firm.
Can I switch CPAs mid-year?
Yes. There is no legal restriction on switching. You should be able to request your prior records and returns from your old firm. Timing it before or after your tax filing simplifies the transition.
What should we get in writing before work starts?
An engagement letter that says what is being done, what is not, who does it, what it costs and on what basis, and how either side ends the arrangement. It should also say what happens to your records when it ends. Firms that work without one are not necessarily bad, but every disagreement that follows becomes a matter of recollection, and the party with the better memory of a conversation is rarely the client.
How do we move firms without losing anything?
Appoint the new firm first, then tell the old one, and do it outside a filing deadline if you possibly can. Ask the outgoing firm for the working papers you are entitled to, the accounting file and the logins, and confirm in writing what has been filed and what has not. The gap where nobody believes they are responsible is where a deadline gets missed, so name a date the handover completes.
Written by
Abhinav Gupta, CPA, CA, MBA
Abhinav works with business owners across the US on industry-specific bookkeeping, from dental practices and restaurants to construction and e-commerce. He writes about what each trade's books actually need. Connect on LinkedIn
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