Why You Shouldn't Take Business Advice From Your CPA
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Not many people know this about me, but I'm a Certified Public Accountant. I keep up the certification, but that doesn't mean I'm a very good CPA. For me, if the numbers are close, that's good enough, which is not exactly the sign of good CPA. Lucky for the profession, I haven't practiced accounting in years.
But come on, you like your CPA, right? He hasn't aged well, I'm sure you'll agree. But he's a good guy. You'd let him babysit your kids. You'd let him dance with your wife. In fact, you better because the guy knows your most intimate financial details. But even though he may have your best intentions at heart, the fact is your CPA has his own agenda. You're a client, and like a doctor who looks at that patient on the operating table with dispassion, your CPA is likely looking at you in the same way: a billable few hours, a partial payment towards his next vacation or a couple of hours of his kid's college tuition.
To make money as a small CPA, you need a lot of clients, which means there's no way your CPA is really on top of all the stuff he needs to know to service you best. He's also likely not a specialist in your industry either, though he should be, because there are always best practices and new tax rules that may be particular to your type of business. Your CPA doesn't specialize in state, local, or sales taxes. He's not a personal financial planning expert or an estate planning guru. These are all separate specialties. Don't let him tell you he knows this stuff. He doesn't. Find someone who specializes if you need that kind of help.
What's more, even though he's a tax guy he still doesn't know everything about taxes. In fact he's probably so overworked that he hasn't had the time to keep up with all the latest developments. Sure, his profession requires him to attend continuing education classes, but many of the guys I know in those things are sleeping, working on other stuff or just checking the box so they can get their credit. The big firms have entire research departments based in Washington and New York keeping up on the most recent legislative developments that affect their clients. Your CPA has Google. For big issues, get second or third opinions. Pay for them if it's worth it.
CPAs are notorious procrastinators. They are quick to pass the buck. They can't complete your return because a certain receipt is missing. They haven't finished your financial statements because you still owe them this and that. It's always something. This is an easy thing to solve. Just make a list. List all the things that your CPA requests from you. Confirm the list with him. Deliver the things on the list. Confirm this delivery, in writing, by email. And then ask him again and again why he isn't doing what he said he'd do, when you've done your part.
Just remember that your CPA is mostly a tax guy. He may try to convince you otherwise, but he's not a really great business person. If he was, he'd be sitting in a plush office on Park Avenue, not in a podunk firm over a Chinese restaurant in the strip mall down the street. This is not a sign of success. It's a sign of making a living. Nothing wrong with that.
Feel free to ask your CPA for business advice, but take it with a grain of salt. Just because he can count money doesn't mean he knows how to make money. Have other advisors for that.