Tools you can use this quarter

For recurring outsourced accounting (monthly close, reconciliations and a reporting pack), fees are typically a fixed monthly amount scaled to transaction volume, entity count and complexity rather than to revenue alone. A single-entity service business and a three-entity manufacturer at the same revenue are very different pieces of work.

Project work such as an audit, a controls assessment or catch-up bookkeeping is quoted at a fixed fee after a scoping call. The most reliable way to get a comparable number from any firm is to ask for a written scope listing deliverables and dates, then compare scopes rather than headline prices. A cheaper fee for half the deliverables is not cheaper.

The practical triggers are: a lender or investor requiring GAAP-basis statements; inventory becoming significant, since cash basis systematically misstates margin where stock is held; revenue earned in a different period from when it is collected; or reaching the point where decisions are being made on numbers that do not reflect what the business actually earned that month.

Worth noting that the tax basis and the management reporting basis can differ. Many businesses report internally on an accrual basis while continuing to file on a permitted cash basis. You do not always have to choose one for both purposes.

A common working policy is seven years for general accounting records, tax returns and supporting documentation. Some categories are kept permanently: formation documents, board minutes, property and major asset records, and pension or benefit plan records.

Employment records and payroll carry their own retention rules, and grant agreements frequently impose longer periods than your general policy, which is a good reason for the retention policy to be written down rather than assumed. Confirm your specific requirements rather than applying one blanket rule across everything.

A bookkeeper records transactions. An accountant prepares and interprets financial statements and may hold no license at all. A CPA is licensed by a state board, must meet education and examination requirements, completes mandatory continuing education, and is subject to professional standards and disciplinary oversight. Only a CPA can issue an audit or review report.

For routine transaction processing, a good bookkeeper is often the right answer and considerably cheaper. The CPA layer earns its cost where judgment, assurance or exposure is involved.

Yes, and mid-year is usually the better time. Changing in February means the new firm inherits a filing deadline before they understand the business; changing in June or July gives them a full quarter to assess, clean up and prepare properly.

Your records are yours. A professional predecessor will provide the trial balance, depreciation schedules, prior returns and workpapers needed for continuity. If a firm is obstructive about handover, that is itself informative.

Read the actual requirement before assuming. A meaningful number of organizations buy an audit when the covenant, funder agreement or bylaw asks for a review, which provides limited assurance and typically costs a third to a fifth as much.

The difference is in the level of assurance: an audit tests balances against third-party evidence and issues an opinion; a review uses analytical procedures and inquiry and issues a conclusion. Our audit and assurance page sets out the full comparison.

Send it to your CPA the day it arrives. Do not ignore it, and do not pay it reflexively. Both are expensive in different ways.

Most notices carry a 30-day response window and the options narrow sharply once it passes. A meaningful share are wrong or partially wrong: a misapplied payment, a return processed against the wrong period, a mismatch from a late information return. Check the notice against the filed return and the account transcript before agreeing with any of it.

Possibly, and we will say so. Below roughly $2 million in revenue, with a simple structure and no audit or assurance requirement, a good bookkeeper plus a seasonal tax preparer is usually the right and considerably cheaper answer.

The CPA firm relationship starts earning its cost when complexity arrives: multiple entities, multi-state obligations, an audit requirement, outside capital, inventory, or decisions large enough that being wrong about them is expensive. Selling you something heavier than you need is a short-term win and a long-term loss for both of us.