Nonprofit Accounting Blog – Page 14

Nonprofit Accounting Best Practices: Scaling for Growth and Impact

For several years now, we have seen the demands for nonprofit services increase rapidly, oftentimes exceeding capacity. Nonprofit organizations are focused on meeting the needs of their constituency while increasing impact. Some of the challenges get raised when organizations are planning to effectively scale for growth and impact. With the ever changing and growing needs, how are nonprofits adapting?

We’re seeing more mergers between nonprofits as well as new partnerships and collaborations. Some of these partnerships are with social enterprise organizations, some with other nonprofits, and others with community entities. With increased competition for funding and donors, nonprofits are learning to partner, narrow the focus of their mission, and adopt critical tools to ensure mission success and growth.

While growing to broaden the scope of your mission is a very good thing, it also brings new challenges. You have multiple funding streams, demand for deeper visibility, more grantor requirements, and increased compliance and reporting requirements. You may add new locations, programs or initiatives. It’s vital to plan for your growth and your expansion beyond the startup mode. Most nonprofit organizations start out utilizing small business tools to manage the organization. Once growth and expansion starts to kicks in, nonprofit orgs begin to experience the pains and limitations of ‘startup’ tools and resources.

In our last two posts, we shared information with you related to outcome measures and funding diversity. These two areas are critical as you plan and prepare for growth. Once you start tracking and measuring outcomes and increasing the diversity of your funding – you will quickly see the need for a best in class financial management solution – that will allow you to leverage modern technology to strengthen your visibility, transparency, automation, efficiency – and of course – your stewardship.

As your organization starts to thrive and grow, don’t think it will just happen on its own. Plan and build your strategy to accommodate the growth in a sustainable way. Nonprofits need the leverage and benefits that modern, best in class fund accounting affords. Whether through automation and visibility, or transparency and reporting – make sure that you equip your nonprofit with the tools that will allow it to thrive, grow, and maximize impact.

Questions or comments regarding scaling for impact and growth? Please reach out to us. You can also follow us on Twitter (@BeckCPAs). Check back next week for the final post in our series, where we will focus on automating your processes.

At Beck & Company we specialize in not-for-profit accounting and auditing. We understand the unique challenge of balancing the needs of your various stakeholders – contributors, members and your board, too. We have experience serving not-for-profit organizations such as unions, homeowner’s associations, religious organizations, charities, and social service organizations. If you have any questions regarding the filing of your form 990 we are here to help. Contact us today for more information.

Nonprofit Accounting Best Practices: Fund Diversification

We are continuing on in our Nonprofit Accounting Best Practices series. As you prepare for the future, sustainable funding is a critical part of your plan. Some organizations get comfortable to the more traditional types of funding such as philanthropy which has proven to not be a sustainable method. Most growing nonprofit organizations need a true funding strategy that is wide in scope including sustainable forms of funding.

Whatever your current process is, you will probably be planning for expanded services. Most nonprofit organizations see an increase in the demand for services while facing increased competition for funding. In this environment, you need the support, credibility, and visibility with the community, funders, and constituents. Strong nonprofit accounting and financial management is key and includes performance and outcome reporting. You also need more to bring stability and sustainability – while allowing you to scale for growth. By diversifying your funding streams, you strengthen sustainability while expanding your influence and impact by partnering with new and diverse resources that you may not have considered previously. We are going to start with some basic information to help you get started and navigate the world of social finance. As with most things, balance is key to successfully diversifying your funding.

Social Finance is an approach to mobilizing private capital that delivers a social dividend and an economic return to achieve social and environmental goals. It creates opportunities for investors to finance projects that benefit society and for community organizations to access new sources of funds. Social finance is fairly broad in its definition, but we will give you a thumbnail of a few of the most interesting ‘instruments’ included in the social finance realm.

Impact Investments are investments made into companies, organizations, and funds – with the intention to generate measurable social and environmental impact alongside a financial return. Impact investments are made with an expected return of capital as well as a return on capital, and most importantly, a commitment to measure and report the social and environmental performance and progress of the underlying investments. Global Impact Investing Network says it well: “Impact investing has the potential to unlock significant sums of private investment capital to complement public resources and philanthropy in addressing pressing global challenges.”

Program Related Investments (PRI) are defined as investments made by foundations to support charitable activities that involve the potential return of capital within an established time frame. PRIs include financing methods commonly associated with banks or other private investors, such as loans, loan guarantees, linked deposits, and even equity investments in charitable organizations, or in commercial ventures for charitable purposes. For the recipient, the primary benefit of PRIs is access to capital at lower rates than may otherwise be available. For the funder, the principal benefit is that the repayment or return of equity can be recycled for another charitable purpose. PRIs are valued as a means of leveraging philanthropic dollars.

Social Enterprise’s standard definition is applying commercial strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for external shareholders. Nonprofits are starting to leverage this strategy as they seek to create earned income to increase their sustainability and funding strength. NESC has published a great report on Social Enterprise’s Expanding Position in the Nonprofit Landscape. Social Enterprise activities offer nonprofit organizations the opportunity to generate earned income which in turn will provide consistent cash flow to further the mission of the organization. Social Enterprise activities can enhance the brand/reputation of the organization. A direct benefit of Social Enterprise activities for nonprofit organizations, can be the enhancement of management.

The world of social finance and funding is expanding at a fast pace. New funding resources are being developed often to help nonprofits ensure mission success. In the beginning stages of your funding and growth planning, be sure to seek out the best fit in the multitude of new funding opportunities, and incorporate it into your fiscal plan and performance goals. We also encourage you to remember to track and report your funding diversity as your donors and constituents need to be aware of this information.

Do you have questions? Please reach out to us. You can also follow us on Twitter (@BeckCPAs). Check back next week for the next post in our series, where we will focus on scaling for growth and impact.

Nonprofit Accounting Best Practices: Outcome Measures

We are launching a multi-blog series, Nonprofit Accounting Best Practices, that hones in on trends and best practices for strengthening the condition and sustainability of your nonprofit organization. To help simplify and focus your planning, we plan to cover the best practices for everything from outcome measures to competition for funding. We are starting with what we think is one of the most pressing topics, outcome measures. Be sure to check back the following weeks as we cover funding flexibility, scalability, and automation.

Measuring and reporting outcomes is a huge topic in the nonprofit sector. Donors and constituents are more engaged than ever, and they have higher expectations, increased awareness, and greater visibility. Add to that the significant number of for-profit professionals moving into the nonprofit world, bringing their best practices with them. So we find ourselves in a dynamic environment where we are expected to change, measure, adapt, and change again.

Let’s start by defining outcome measures. These metrics are powerful, essential tools for demonstrating accountability and transparency for an organization. Outcome measures provide a real time assessment of what the organization defines as success or expected performance. This insight and visibility allows proactive management that can help ensure program performance and mission success.

Outcome metrics come in a variety of forms. They may be activity-based programs that involve the amount of meals served, number of immunizations given, or the level of targeted reading level improvement. Outcome metrics can also be capacity based and measure overall progress or performance across an organization. This could be mapped through fundraising, memberships, volunteers, and event participation. The metrics can also be based on a mission’s long term success or expected lifetime impact.

Why are outcome measures so important?

Nonprofit organizations are experiencing more competition for funding than ever before. Donors and grantors have higher expectations. Often, gifts and grants come with stipulations for performance because the givers want to ensure that their dollars are getting the greatest possible return on investment. Government funding, as well, has strengthened compliance reporting and performance expectations. Implementing strategic outcome measures not only helps you meet compliance requirements, but also strengthens your reputation while assuring current and prospective donors that your organization is efficient, proactive, a good steward, and of course – able to do what you say you can do.

Your constituents, donors, volunteers, employees and community need to see success to support and sustain the vision and mission of your organization. Charity evaluators have embraced outcome reporting and will be rating nonprofits based not only on financial reporting and analysis, but also on their tracking and reporting of outcomes. This dramatically raises the standard for all nonprofit organizations. Outcome metrics are an enormous part of improving overall visibility and performance.

The key is not to get too overwhelmed with the details and start with the basics based on your vision and mission. Utilize external resources to get started quickly and easily. Consistent progress is what wins the day. Balance your approach with both program outcomes and financial/operational performance. While measuring and reporting outcomes may require extra effort now, the interest and engagement that this expectation brings is a great thing in the long term for the nonprofit community – as it will bring significant benefits to organizations, donors, constituents, and communities.

A little unsure of where and how to get started? There are many resources available; some of our recommendations are:

We also encourage you to attend an upcoming webinar, “Outcome Measures: Metrics that Matter for Nonprofits” to learn what is driving forward-thinking nonprofits to place a strong emphasis on outcome measures in 2016—and why they are using the Intacct cloud-based financial management solution to make it happen.

Have additional questions or comments regarding outcome metrics for nonprofits? Please reach out to us. You can also follow us on Twitter (@BeckCPAs). Check back next week for the next post in our series, where we will focus on funding diversity.

Identifying and Deterring Fraud part 2

Last week we began a two-part series on fraud. We looked at the profile of a fraud perpetrator and how every business is susceptible to these malicious behaviors. Today we will dig a little deeper into fraudulent activities with a look at computer attacks and social engineering, as well as some ways you can keep your computers virus-free.

Computer Attacks

Every computer connected to the internet, which is basically every computer, is at risk of computer attacks. Hackers, foreign governments, terrorist groups, disaffected employees, industrial spies, and competitors are attacking computers in search of data or seeking to harm the system. This means that preventing computer attacks is a full time job. Attacks can take on a number of different forms. Let’s take a look at a few of them.

Hacking involves the use of a computer to gain unauthorized access to data in a system. Generally hackers will break into systems through known flaws or weaknesses within an application or program. Some hackers are looking to steal data such as trade secrets, customer lists, credit card numbers, etc. Others are motivated by the challenge of breaking into a system. Either way a breach of this type can be destructive and set your organization back for hours, days, or even months.

Denial of Service In computing, (DoS) attack is an attempt to make a machine or network resource unavailable to its intended users, such as to temporarily or indefinitely interrupt or suspend services of a host connected to the Internet.

Zero- day attack, vulnerability refers to a hole in software that is unknown to the vendor. This security hole is then exploited by hackers before the vendor becomes aware and hurries to fix it—this exploit is called a zero day attack.

Cross-site scripting (XSS) is a type of computer security vulnerability typically found in web applications. XSS enables attackers to inject client-side script into web pages viewed by other users. A cross-site scripting vulnerability may be used by attackers to bypass access controls such as the same-origin policy.

Buffer overflow, or bufferoverrun, is an anomaly where a program, while writing data to a buffer, overruns the buffer’s boundary and overwrites adjacent memory locations. This is a special case of the violation of memory safety

SQL injection is a code injection technique, used to attack data-driven applications, in which malicious SQL statements are inserted into an entry field for execution (e.g. to dump the database contents to the attacker).

Man-in-the-middle attack (often abbreviated to MITM, MitM, MIM or MiM attack or MITMA) is an attack where the attacker secretly relays and possibly alters the communication between two parties who believe they are directly communicating with each other.

Dictionary attack is a technique for defeating a cipher or authentication mechanism by trying to determine its decryption key or passphrase by trying hundreds or sometimes millions of likely possibilities, such as words in a dictionary.

Another vulnerability to companies is called Social Engineering. Social engineering is a non-technical method of intrusion hackers use that relies heavily on human interaction and often involves tricking people into breaking normal security procedures. It is one of the greatest threats that organizations today encounter.

In order to avoid or minimize social engineering, consider establishing the following policies and procedures.

Be aware of people entering a restricted building. If your organization has key card access restrictions, be sure that others are not gaining access by following you in.
Avoid logging in for someone else on any computer. This is particularly important if you have administrator rights.
Do not give away sensitive information via phone or e-mail.
Do not share passwords or user IDs
Be aware! Exercise caution if anyone you do not know is attempting to gain information or access through you.

As you can see there are a many different ways in which a computer system is vulnerable to attack and therefore businesses are at risk for fraud. Educating yourselves on the potential risks is one of the best ways to reduce your risk. Implementing trainings, a company culture of integrity, and effective internal controls will also help your company to avoid becoming a victim.

Identifying and Deterring Fraud part 1

What is Fraud?

Any time a person seeks to gain an unfair advantage over another person it is considered fraud. Usually fraud is committed with an intent on gaining a financial benefit and results in harm to the rights or interests of another person or business. Fraud is rampant among businesses today. There is a staggering amount of fraudulent activity each year ranging from the loss of small sums of money on a local level all the way to multimillion-dollar fraud. It is estimated by The Association of Certified Fraud Examiners (ACFE) that organizations are losing 5% of their annual revenues to fraud, with more than 22% of frauds resulting in losses of at least $1 million. They also reported that more than 70% of fraud is committed by employees in the accounting, operations, sales, executive, customer services, and purchases & finance departments. In general, smaller businesses are at a high risk for fraud due to having fewer internal controls to protect themselves.

The good news is there are ways to help reduce your risk for fraud. Prevention measures that range from hotlines for anonymously reporting suspicious activity to regular trainings on what constitutes fraud and how it affects everyone within the organization.

What does a fraud perpetrator look like?

In short, they look like you and me. Most white collar criminals are talented, highly educated, stable, individuals. However, there are some red flags to look for to detect fraudulent activity. Some common behavioral red flags include:

Living a lifestyle beyond their means
Financial hardship
Scarcity mentality (unwilling to share knowledge or data)
Family problems
Addiction
Reluctance to take vacation/time off

Computer Fraud

Another risk for companies is computer fraud. Using a computer to commit fraud can be much more difficult to detect than other crimes. Additionally perpetrators are able to get away with stealing more money in less times with less effort. Computer fraud can be more challenging to detect than other types of fraud. Unfortunately, computer systems are vulnerable to crimes that can go undetected until it’s too late. There are many reasons why computer systems are so vulnerable to fraud. The sheer volume of data that is stored on a company system make it difficult to establish perfect controls and protections. Additionally, many people need to access information in order to service customers and perform the functions of their jobs. However, it is still necessary to protect against computer fraud as best as you can. In fact, it is estimated that at least one incident of computer fraud has effected every U.S. business.

Computer Fraud Prevention

Creating a climate that will reduce your risk for fraud is the best thing your organization can do in order to protect yourself and your employees. Making fraud more difficult to commit, improving methods of detection, education, and policy are all necessary steps to take. Consider the following in order to make fraud less likely to occur:

Establish a company culture that emphasizes integrity and high ethical values.
Ensure that internal controls have been established that act as a deterrent to any potential fraud.
Create accountability by assigning authority and responsibility to specific departments and individuals.
Develop security policies and communicate them to your employees.
Create a company code of conduct,
Establish effective supervision with checks and balances.
Offer training on ethics and integrity
Establish a strong system of internal controls
Implement segregation of duties
Establish physical and remote access restrictions

In the unfortunate event that fraud has occurred in your company you will want to maintain the following in order to reduce potential losses.

Obtain adequate insurance
Establish a fraud contingency plan
Maintain backups of all program and data files
Monitor your systems activity with software

Next week we will look at Computer attacks and social engineering as well as ways to keep computers virus-free.

When is TotalAccounting a Smart Move for Nonprofits?

Not all organizations feel comfortable utilizing a third party accounting expert. Understandably, some executives desire to maintain these processes in-house. However, there are many benefits to outsourcing the day-to-day accounting operations of your organization. Ask yourself the following questions to see if TotalAccounting may be the right next step for you.

Do you struggle to raise funds?
Is operating on a leaner budget a dream and not a reality?
Does your organization need a better way to keep costs down?
Is the right person performing each accounting processes?

Now that you have determined your need to explore outsourced accounting let’s take a look at some examples of how something like TotalAccounting is an efficient and wise solution for you:

Utilizing a third party accounting solution allows you to work with highly educated, accounting experts without having to hire a full time accounting staff. Staffing high level experts in this field is expensive and may not be the best decision for your staffing budget at this time.
Additionally you are able to utilize this expertise on an as needed basis. Everything from accounts payable, to audit oversight, to CFO level expertise is available at any time.
The financial reports you can receive from your outsourced team will provide valuable business intelligence to help you make the best possible decisions for your organization.
A third party team can add to your internal controls, creating accountability and transparency with financial operations.
With tax laws and regulations constantly changing, an outsourced team will help to ensure you are operating within compliance of laws and regulations.
A TotalAccounting partner can present recommendations on best practices so your organization can run at optimum efficiency and effectiveness.
Save money on technology. Utilizing an outsourced accounting team means you don’t have to invest in expensive software programs and maintenance.
Save time and money on staffing. An outsourced accounting team means you won’t have to hire, train, fire, or manage an accounting department.
When it comes time for the annual audit, your outsourced team will save you countless hours and headache’s as they will be fully ready for the audit process.
Think of it like a buffet; you can pick and choose the tasks you would like to have your third party accounting team work on. Leave the rest on the table for another time.
As your organization grows you can scale the services you are outsourcing according to your growth. This means your accounting team can grow with you at a minimal cost of time and money to your organization.

Here at Beck & Company, Certified CPA our TotalAccounting service team can help you reduce your back-office overhead and improve your processes so you can spend more time focused on your cause. We have a broad base of managerial accounting and systems experience and a deep understanding of nonprofit process and technology that enables us to apply knowledge from the past, together with up-to-date best practice know-how to help you solve your challenges and capitalize on the opportunities you face. We partner with you in each of your engagements, getting to know you and your unique challenges and objectives intimately. This combination enables us to develop tailored solutions to increase your effectiveness and help you achieve the goals of your mission. Contact us to today to learn more about TotalAccounting and begin partnering with us today.

Should Board Members Answer Form 990 Questions?

The IRS does not require board review of Form 990 however, Part VI, Line 11a of the form asks, “Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form?” Further, Line 11b asks the organization to describe the process used to review the form, if there was one.

The information on the Form 990 helps board members understand the organization’s activities and the applicable tax laws, both of which are key to fulfilling their fiduciary duties. To help strengthen the board’s understanding of the organization, try asking them these 9 questions at your next meeting:

Was a complete copy of the Form 990 provided to all members of your governing body before filing the form?
Is the organization using a committee to assume responsibility for audit oversight, review, or compilation of its financial statements and selection of an independent accountant?
Does the organization have any amounts recorded on its financial statements for receivables from disqualified persons?
Did your organization provide a grant to an officer, director, trustee, key employee, substantial contributor?
Did the organization engage in a business transaction with a family member of a current or former officer, director, trustee, or key employee?
Did the organization hold assets in temporarily restricted endowments, permanent endowments, or quasi-endowments?
Did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country?
Did the organization make any significant changes to its governing documents during its most recent tax year?
Does the organization have a committee assuming responsibility for oversight of the audit?

It is vitally important for board members to be aware and well versed on the contents of form 990 before it is filed. The CPA needs to talk to the board and officers and help them understand Form 990, how to read it and what to look for. This education is critical for the board to properly fulfill its oversight role for Form 990. The CPA is uniquely qualified to provide this vital education. The CPA should provide this training to the board periodically or in orientation for new members.

The Form 990 is not a simple form completed with cutting and pasting. This tool provides an opportunity for the CPA to partner with clients and moving them to a stronger position, practicing the best methods throughout the organization. It also provides a way to think creatively and answer questions that help the organization tell its positive story to the world. Form 990 presents an opportunity for the CPA to add real value for clients and to be a true adviser—it is the CPA’s opportunity to shine.

Is Your Nonprofit Prepared for Growth?

Over the past few years, nonprofit services have experienced increased demand. Demand that at times, exceeds the capacity of the organization. Of course, nonprofits desire to effectively meet the needs of their constituents and continue to have a significant impact. The problem is keeping up with the demand and planning for future growth.

One of the ways nonprofits are scaling for growth is through partnership and collaborations. The increased demand, which has sprouted more NPO’s, creates increased competition for donors and grants. This then requires nonprofits to become clear on their mission and create tools to see them to their desired success.

Growing organizations of any kind is a marker of organizational health. Growth = Good. However, growth also brings with it, its own set of unique challenges. Challenges that not all nonprofit organizations are ready to face. For instance, increased grantor requirements, funding from multiple sources, a desire to see deeper into organization financials, in addition to more complicated reporting and compliance. In order to optimize successful future growth, your organization should have a plan which anticipates these changes and how you are going to deal with them. Perhaps your nonprofit will add programs, services, or locations. How will you continue to keep accurate records, updated budgets, and most importantly, maintain missional focus? While your company may have been established using a small business model – that same model may not continue to serve you well as you expand.

It is likely that in order to support your growth you will need to diversify your funding. Obtaining funding will require outcome measures and a clear understanding of your key performance indicators. The ability to track your financials becomes even more important to donors and constituents who are supporting your organization. Inevitably a growing nonprofit will reach a point where they require a financial management solution that utilizes modern technology to organize and maintain accurate records.

Intacct’s Cloud-based ERP software is specifically designed to provide you with the control you need to simplify your financials so you can determine where – and how – to allocate your resources and time. Built in the Cloud environment, Intacct provides organizations with true business visibility and flexibility so they always are in the know. Designed to automate your organization’s financial processes and transform your financial department into one that strategically drives your company toward growth, Intacct has been voted one of the best-in-class financial ERP solutions on the market today.

At Beck & Company, Certified Public Accountants and Business Advisors, we are an accounting and consulting firm delivering specialized expertise, creative thinking, and unsurpassed service to ensure that our clients’ financial endeavors flourish. Specifically, we offer nonprofit services such as CFO, Controllership, and Accounting services. Contact us to see how we can help your organization flourish.

Accomplishing your Goals with Automation Best Practices

Nonprofit organizations are generally focused on bettering their programs and services, increasing efficiency, decreasing costs, strengthening donor loyalty, and pursuing their overall mission. All of which are good and show wise stewardship within the organization. One way to ensure you are maximizing these efforts is through the automation of processes. Ultimately – through automation, accomplishing more with less; leading to greater impact of your nonprofit.

One of the ways to accomplish this, as we’ve talked about before, is through outcome measures. As your organization seeks to find financial support in today’s increasingly competitive environment, having an accurate display of your financial outcomes can play a key factor in winning grants and donations. Providing these reports, efficiently and accurately requires automation of processes. Through automation your organization can increase productivity and reduce overhead costs.

Automation through an enterprise resource planning (ERP) solution such as Intact ERP Software, can help by automating processes, improving oversight and controls and increasing accuracy and compliance. This will lead to your finance department running more efficiently, while allowing other departments within the organization to use the best tools for their part of the job.

In addition, automation can drive performance and growth. For instance, financial managers are expected to provide information – valuable information – to run their business better. Through automation you can easily dig deeper into your organizations financials in order to understand the true dynamics of your business. This provides visibility into both your financial and operating data so you make better long-term and more strategic decisions.

Another thing to consider is the time you are spending on your annual audit. Are you losing out on valuable time manually searching for information and compiling reports? In an automated environment, you can provide your audit team with access to reports and documentation which allows them to view the information needed to analyze your financials.

Keep these best practices in mind as you delve into 2016. Here at Beck & Co CPA’s we are committed to helping our customers achieve success. We want to help you increase efficiency, decrease costs, strengthen donor loyalty, and pursue your overall mission. Contact us to learn more about our services and solutions.

Hints and Questions to Consider when Choosing a Tax Advisor

Finding the right tax advisor can have a significant impact on your organization. Working with the wrong advisor can lead to a litany of issues and hassles, resulting in additional work and unnecessary headache for your board of directors. However, finding a tax advisor that is the right fit for your organization can save you time, and ultimately – money.

Here at Beck and Company Certified Public Accountants and Business Advisors we are experienced and qualified to help your organization with their tax preparation and can offer further advice on securing a tax advisor as well. Learn more about our tax service offerings here.

Whether you choose a Beck and Company CPA or someone else to serve as your tax advisor, keep the following hints in mind when choosing the right tax preparer or advisor to do your taxes. Finding an advisor who is truly committed to your business success is absolutely paramount. Selecting the right advisor should be a process not unlike selecting a full-time employee who’s the right fit for your organization. These hints are intended to help you to secure the right person with the right intentions which will ultimately save you from major headaches down the road. With that in mind, consider the following:

Helpful Hints When Choosing a Tax Preparer/ Advisor

Use a reputable tax professional who signs the tax return and provides a copy.
Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months, or even years, after the return has been filed.
Check the person’s credentials. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection, and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources that also holds them to a code of ethics.
Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.

Don’t rely on these hints alone, you will also want to be sure to interact with and communicate with three or four options in tax advisors before making a final decision. When you interview, consider the following questions to ask. Their answers will offer guidance and insight into your ultimate tax advisor selection. In addition to these guiding questions that are found below, a few key qualities you should discuss during an interview are availability, qualifications and experience, client longevity, and price.

Questions to Ask when Choosing a Tax Advisor

What is the candidate’s educational background? Do they have an advanced degree?
What qualifications does the candidate have?
Do they have expertise in areas relevant to your organization?
How long has the candidate been doing tax advising?
Do they have any licenses? If so, which licenses do they have?
Will he or she provide at least three references of current clients?
Have they been cited by any professional or regulatory body for disciplinary reasons?
How and what do they charge? What fees will they charge?
Do they provide ongoing reviews and planning strategies for you?
Will they represent you if you are audited?
Are you comfortable with your prospective accountant/ tax advisor?

There is not a one-size fits all answer to the above questions. Rather, there will be a right answer for your unique situation and needs. The best advice we can offer is to be diligent about doing your research. This will provide you with the information you need to make an educated decision when it comes to choosing a tax advisor. For more information about the process or to find a tax advisor for your organization, contact us here at Beck and Company CPAs.