Long story short our current CPA has fallen short of what I consider a job well done. I am now looking for a new CPA that has an understanding of the restaurant business. I have set up a few interviews next week and I would like to make sure I get a good one.
Any questions you would ask a CPA? How many of you use a local CPA vs a specialized one someplace else?
How many other restaurants do you currently work with? (Which are the same type of entity preferably i.e. S-corp, Sole-P). You really want one that knows enough about the business area to ask you good questions and help you avoid restaurant specific IRS pitfalls.
A pet peeve of mine: How do you suggest COGS be determined? If they include labor look elsewhere! (Yes, I know some do it this way… it comes from the manufacturing world and since we manufacture food some want to go this way but…) Suit yourself on this one, but for me the couple of CPAs I found that did it this way in my business brokerage experience were not knowledgeable about restaurants and it showed in the way they organized expense reporting.
What do you want them to do and how much do you charge:
a. Tax returns for the year. I assume this is kind of the minimum.
b. Wage reporting and payroll. (Gets expensive)
c. Monthly book keeping. I can’t imagine not doing this myself but I know many prefer to have it done for them.
d. Handle all the bills and cut the checks for payment.
Do you charge for time spent on phone calls with questions?
How much do you charge!!? I have encountered a huge range of fees. Obviously the services rendered vary so they are not all going to be the same, but you should go into this knowing what you do and do not want them to do. for example, I am very comfortable with my own book keeping etc so I pay our CPA to do the tax returns for the corp and that is all. It costs us about $600 per year for state and federal returns. We pay NO CHARGE for a few phone calls at various times to answer questions etc. We do payroll with ADP so they handle the W-2 and 941 and the unemployment reports. (Payroll costs us about $100 per month)
I have seen CPAs charging double what I pay to do payroll and fees of another $100 or $200 per month or more to do book keeping. I have seen restaurants that pay $5,000+ per year to a CPA for taxes, book keeping and payroll so I would say the range is $500 to $5,000.
Get comfortable with what you want done and how much it is worth before you hire.
Our book keeping has just gotten easier over the years. For example, with so many suppliers taking credit cards now the number of checks I write other than payroll has dropped to about 7- or 8 per month. I don’t need to pay someone else to cut them or track them! I also do not want to give up the connection to my expenses that comes from reviewing invoices for payment and checking my credit card statements.
In today’s world you do not need a CPA to be in your town if you are going the easy route with just having them do tax returns. I could see wanting them to be near if you were having them do all the book keeping including cutting the checks.
used a CPA for many years, cost about 6K a year, now i use quickbooks and a tax preparer ( he’s very good ) about $400.00 per year. Saving a lot.
Hey John, I know you’ve done well, but I’d issue a word of caution… We’re in our 9th year of business and have accumulated quite a large depreciation schedule. Additionally we have other businesses that our CPA takes care of and she also does our personal returns. Having QB online makes it alot easier for her, but really, its her expertise that we’re paying for. And as for costs, I believe it has always been less than 3k, keeping in mind that she also does our property tax, local tax, returns… Her company is one of my best ROIs.