Working with your CPA Featured

8:00pm EDT March 26, 2008

While audit and tax work are clearly the most recognizable services provided in the public accounting profession, CPA firms provide many more specialty services. In fact, a CPA should be a business’s most trusted adviser, according to Maureen Lucey Mihelich, a partner in the Consulting Group at Burr Pilger Mayer.

“Every business, no matter its size, needs the expertise normally provided by a full-fledged accounting and finance group,” she says. “The problem for many companies is that they don’t need all these skills on a full-time basis. What many companies don’t realize is that they have the option of bringing in an accounting team or CFO on a temporary basis.”

Client accounting services encompass many service areas, including budgeting, forecasting and cash flow management services to help businesses benchmark their progress. They can aid in expansion or even restructure plans. A qualified provider can research, select and implement accounting or record-keeping systems for everything from general ledgers to inventory management. Many CPA firms also offer a virtual accounting department to tackle tasks from financial and management reporting to meeting regulatory compliance requirements.

“The inability to obtain and utilize timely financial and operational data could hinder a growing company’s ability to react to changes in its industry.”

Smart Business spoke to Maureen Lucey Mihelich about how businesses can benefit from the many skill sets a CPA can offer.

In what types of industries are your clients?

My clients run the gamut from professional service firms to businesses in the manufacturing and hospitality industries. I find that, though these business owners and operators are experts in their specialty area or industry, they lack the critical eye of a financial expert to meet the financial management requirements of their growing business.

What do management advisory services entail?

Every type of business needs financial services expertise, but how much varies from business to business. If you have a business with 100 employees, it is not likely there will be a 10-person accounting department. You may only need a controller or CFO a few days a month, or you might need a team of people at the end of the year for peak projects, such as preparing for a year-end audit.

Using your CPA firm to provide these client accounting and/or management advisory services can fill these needs without hiring a team of employees. A CPA can be utilized to assist a business owner with major decisions, such as expanding a business or offering a new product line. We often assist clients in determining important financing options. For example, should the existing owners make additional investments in their business or seek funding via bank financing or outside investors?

In some cases, the challenge is how to assist a client when the business isn’t succeeding. What does it need to consider to restructure or, perhaps, change focus? The goal of client accounting and management advisory services is to assist clients by helping them run their business more efficiently and effectively. Sometimes, the best resource a CPA can provide is to play the role of devil’s advocate or to be that fresh set of eyes that looks at their situation from an objective, long-term point of view.

What other services can a CPA offer?

By providing client accounting services, a CPA can outsource the entire accounting and finance team for a client in a consistent and cost-effective manner. Family Office Services, also provided by many CPA firms, provide similar financial record-keeping and investment management services for individuals and families.

The beauty of looking to your CPA to provide these services is that you can hire only what you need, when you need it. Many clients already have a certain level of accounting personnel and use their CPA firm to fill in the pieces they don’t have. Other clients count on their CPA firm to provide recurring assistance just for specialty projects, such as quarterly reporting to their venture partners or other investors. When the business grows to the right level, they can then bring in full-time accounting and finance employees to meet the next phase of their business.

What should I look for when hiring an expert to perform client accounting services?

When meeting with a firm, have the CPA suggest some possible plans of action for your situation. The right CPA firm is going to know your industry and its challenges and opportunities. It will be able to help you establish the best practices needed to operate efficiently within that industry. Your CPA firm should assist you to see what lies ahead for you as your business expands and position you to be ready to meet that growth.

So use your accounting dollars wisely, hire the right level of internal staff to meet your current business requirements, and then bring in your CPA firm to provide periodic additional expertise during the times of your business year that make the most sense.

MAUREEN LUCEY MIHELICH is a partner in the Consulting Group at Burr Pilger Mayer. Reach her at mmihelich@bpmllp.com or (415) 421-5757.