As investors grow their portfolio, they often become overwhelmed with the complexity of the laws and regulations they need to be following. Naturally, they seek out professionals to add to their power team, and they should. Once such professional is a CPA.
A CPA can add an enormous amount of value to your portfolio or business. I am a CPA, so it may sound self-serving, but I became a CPA because I knew that in doing so, I could add significant value to the lives of others and help build wealth across the country.
While it’s true we all have the same three letters behind our name, not every CPA is the same. We run different business models, have different personalities, vary in degrees of grit, and maintain different values and principles.
As an investor, do you know what you should be looking for in a CPA? Do you know what a CPA should bring to your power team? Not knowing the answers to these questions is a huge mistake. Many people will stick with CPAs for years, so it’s extremely important to know what to look for before engaging in a long term relationship.
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Your CPA should invest in real estate.
Before I started investing in real estate, I told investors it wasn’t critically important for the CPA to invest in real estate themselves as long as the majority of their clients were investors.
Then I bought a triplex and my views changed.
You see, once I was an investor myself, I could relate to my clients on a completely new level. I was no longer speaking in hypotheticals; I could provide concrete evidence and personal examples. Clients like this. They want to know the people on their team are headed in the same direction as themselves.
I also realized that CPAs who service real estate investors but don’t invest themselves are like salesmen who don’t believe in the product they are selling but will gladly take your dollar. This is how I now vet any service professional I work with.
While you certainly want your CPA to be great at taxes and accounting, a CPA who invests in real estate will be able to challenge your investment criteria and perspective. Many times, I ask my clients why they are investing in the markets that they are. And this is from “investor me” rather than “CPA me” because I’m genuinely curious.
A CPA who doesn’t have a passion for real estate, who doesn’t invest in real estate, isn’t necessarily someone you want to build a long-term relationship with. You won’t be going to that CPA for investing or business advice, and you may even discount the advice received. The CPA inherently cannot add massive value to you and your future.
I turned down a potential client in the music industry for this very reason. It would have been big revenue for my firm. While I like music, I know there are music fanatics out there and likely a CPA who doubles as a DJ. In fact, a few Google searches led me to find one that fits the bill. I knew that CPA could add significantly more value to the potential client simply because the CPA’s passion was music, so I referred the client over.
Your CPA should ask for feedback.
Within 60 days of tax season or wrapping up an engagement, your CPA should contact you and ask for feedback. The simple act of asking for feedback indicates to you that the CPA is willing to listen to his/her clients and make adjustments to their services. Even the smallest tweaks can greatly improve client happiness and experience.
Any business owner who doesn’t ask for feedback is on a dangerous path. They may believe that they are doing it the best way and don’t need to ask for feedback.
CPAs are notorious for avoiding the feedback loop. This is because we always want to be right. Do you ever see a CPA in the forums (or anywhere) who will initiate a full on assault to prove they are right? I’ll admit, I’ve done it in the past, and I’m not proud of it.
But if a CPA never asks for feedback, how can they improve? It may be a long, painful process for you as the client. It may not be a relationship you want to be in long-term.
If a CPA asks for your feedback, it indicates they truly want to learn how to make their firm better. They want to figure out how they can better serve you and ultimately bring even more value to the table. Doesn’t that sound like someone you want to build a business relationship with?
Your CPA should experiment.
Asking for feedback is great, but if nothing changes, what was the point? CPAs should be constantly experimenting. Now, I’m not talking about experimenting on a tax return, I’m talking about modifying the ways they serve clients or their service offerings.
ShareFile will allow my clients to access their client portals from their smart phones or desktops, rather than having to navigate to a website to then log in.
Podio is going to allow me to better track communications and workflows, allowing me to better serve my clients. On top of that, I’ve figured out a way to invite the client to their unique project page in Podio, which will allow them to see live updates on the status of the project, deadlines, and allow us to communicate with each other on the project page in a Facebook-style manner.
These are little tweaks, but I figured out that clients want to know what the status and deadline of their returns are. So why not provide them with a means to access this without having to email me?
Things like that will make you much happier in your relationships with professionals. So look for someone who is willing to try new things rather than let the status quo engulf them.
Your CPA should help you implement systems.
What good is dropping off your tax documents if not everything is included?
This is going to be a big focus for me and my clients going forward. System implementation is about as important as the preparation of the tax return.
A CPA is a business advisor and should help you understand your options in regard to accounting, document management, and strategy. If you are only receiving tax services, you really aren’t tapping into the full potential of the relationship.
Does your CPA have an automated spreadsheet built out for the do-it-yourself landlords? Can they help you set up QuickBooks Online or Xero? Are they advising you on any of this?
Admittedly, many CPAs don’t like advising on system implementations because it requires some form of a needs analysis, which can be a lot of upfront work. Unfortunately, that means you are left to the hands of software sales people to sift through the pros and cons.
Find someone whom you can at least speak to about this, even if they don’t have a specific service offering for it.
Picking a CPA, or any service professional for that matter, is hard work. You are going to want to build a long-term relationship with the CPA, so you want to make sure you are picking someone aligned with your goals and needs.
Disclaimer: This article does not constitute legal advice. As always, consult your CPA or accountant before implementing any tax strategies to ensure that these methods fit with your particular situation.
Investors: Do you seek these qualities out in your CPA? Anything you’d add to the list?
Leave a comment, and let’s talk.