For any real estate business trying to get to the next level, the increasing demands of financial management are often beyond the business owner's capabilities.
As the business grows, so does the need for help with accounting strategies, advice on balance sheet decisions, implementing information systems, and navigating the tax code for optimum benefits. Stated simply, growing real estate businesses need a CPA – and not just any CPA, but one that is right for your specific business. So, it's essential to know how to select the right real estate CPA.
While CPAs are not inexpensive, they can bring immeasurable value to your business. However, they are typically hired on retainer or hourly, which can make them more affordable than a full-time employee. The key is to find a CPA who brings just the expertise and services your business needs.
How to Find for the Right Real Estate CPA
Identify your unique business needs. A real estate business develops differently from other business types, with specific requirements, including analysis of financial data, real estate-specific tax issues, expensing, and compensation. Your real estate CPA must be familiar with your industry's unique circumstances.
Establish minimum qualifications: All CPAs are certified and licensed by the state. However, continuing education requirements vary. Experience and commitment to advancing their knowledge should be your key differentiators.
Consider your sources: The ideal way to find a great CPA is through referrals. Ask your industry colleagues, banker, or attorney for names of CPAs they would recommend. Cross-reference them with a search in your state's Society of CPAs directory as well as a general Google search to see what pops up. You should be able to find more information about their background, specialties, and experience.
Ensuring the right fit: Many CPAs specialize in specific niches based on industry, business type, or areas of financial expertise. Narrow your search to those who work in the real estate industry with business types and sizes similar to yours. Ultimately, the most important criteria should be the CPA's compatibility with your temperament and vision.
Take Your Time To Find Your Long Term Advisor
While a CPA is not an employee of your business, you should hire one based on your desire for a long-term relationship with the CPA becoming a vital member of your team. Candidates who meet your criteria should be interviewed and evaluated as if they were applying for a job as an employee.
You're looking for a team member who articulates a value proposition that supports your vision and business needs at your stage of development. If you plan to hire a CPA on a retainer basis, it should be done on a probationary basis with specific milestones as a condition for permanent retention.
For most business owners, a well-qualified CPA is their most trusted advisor. Selecting the right one can lead to many years of a rewarding collaboration on your business's financial management. Choose the wrong one, and it can seriously impede your business ambitions. That's why selecting the right real estate accountant should be the most critical business decision you ever make.