How to Hire a CPA as a Freelancer or Small Business Owner

Picture this: You’ve got money coming in from multiple clients, you bought a new laptop, paid for ads, registered your business, hired your first 1099 contractor, and traveled to a conference. Now the big question is: How do you handle all these numbers? 

If this sounds like you, it might be time to figure out how to hire a CPA. Let's walk you through the process.

What Is a CPA? 

A CPA, or Certified Public Accountant, is an accounting professional who has passed the rigorous CPA exam and meets the state’s education and experience requirements. They’re bound by a strict code of ethics. 

CPAs dive deep into numbers, making sure your taxes are on point and helping you plan financially for future ventures. 

CPA vs. bookkeeper: Which do you need?

It's common for entrepreneurs to mix up bookkeepers and CPAs, but they serve two distinct roles.

A bookkeeper manages your everyday business finances—recording transactions, monitoring income and expenses, and keeping the financial side of your business organized. On the other hand, a CPA tackles more advanced tasks like tax planning, filing, and auditing services.

So, which one do you need for your small business? 

• Bookkeeper: If you need daily financial tracking, balance checks, and regular financial reports like profit and loss statements.

• CPA: For in-depth tax planning, complicated financial decisions, and filing duties.

• Both: If you have diverse income streams, numerous deductions, or a complex business structure, both might be beneficial. Some CPAs offer bookkeeping for small businesses, so it's possible to find both services under one roof.

5 Signs It’s Time to Outsource Your Bookkeeping or Accounting

If you're on the fence about outsourcing your bookkeeping or accounting, here are some signs that it might be time:

• You’re short on time. If Sunday mornings find you knee-deep in receipts instead of sipping coffee, it’s time to think of getting some help. The same goes if you’re spending more hours on freelance bookkeeping or taxes than on your core business tasks.

• You’ve noticed some errors and inconsistencies. You accidentally make common tax errors like underpaying quarterly estimated taxes or filing taxes late because you’re not really sure what you’re doing.

• You’ve experienced some business growth. Your financial transactions have increased in volume and complexity, making them harder to manage.

• Taxes feel complicated. You find taxes to be... well, taxing. You're unsure about tax deductions, credits, or compliance, and you want to keep everything above board. 

• You’d rather focus on your business. Instead of being bogged down in day-to-day financial tasks, you want to focus on honing your craft and serving your clients.

Steps to Hire the Right CPA

Use the steps to learn how to hire a CPA who’ll be a good match for you and your business.

1. Know what you're after

Before searching, clarify what you need. Do you just want someone to help with your annual tax return or do you also need help with bookkeeping for your small business? Knowing your needs streamlines the hiring process.

2. Tap into your network

Referrals are gold. Ask fellow freelancers or business owners for recommendations based on their personal experience. You can also ask on social media or in online communities. Facebook groups like Freelancing Females, Black-Owned Business Portal (BlackOBP), and Small Business Connection are great spaces to connect with other entrepreneurs. 

3. Check qualifications

Not all accountants are CPAs. CPAs have passed rigorous exams, met specific education requirements, and adhere to a strict code of ethics. Ensure your potential hire has the CPA designation and is licensed in your state.

4. Schedule a quick chat

Meet with a few CPAs either virtually or in person. Imagine you're catching up over coffee. Are you comfortable? Do they 'get' you and your work? Interview multiple candidates to gauge their knowledge, experience, and how comfortable you feel with them.

Questions to ask:

• What experience do you have with freelancers or 1099 contractors?

• How do you charge? Fixed rates, hourly, or a retainer?

• Will you help with my quarterly estimated taxes or freelance bookkeeping? 

• What happens if I get audited? Will you represent me?

• How often will we meet? 

5. Make sure they’re tech-savvy

We live in a digital age. Your CPA should be familiar with modern accounting tools, cloud-based platforms, and perhaps even industry-specific software you use.

6. Discuss communication

How often will this CPA touch base with you? Will they just pop in to help you navigate tax season? Or, will they be around to help with quarterly estimated taxes or monthly bookkeeping? 

If you’re feeling overwhelmed with your finances, learning how to hire a CPA who will be there when you need them can be the first step toward streamlining your business operations.

7. Check their location (if it matters)

Today, you can video call from anywhere. But, if you're the type who likes an old-fashioned sit-down, see where their office is.

8. Ask about their fee structure

No one likes nasty surprises, especially when it comes to fees. CPAs can charge by the hour, a flat fee, or a monthly retainer. Understand their billing structure so you know what to expect and can build these costs into your business budget.

9. Trust your gut

You’ll be sharing intimate financial details with the CPA you choose. If something feels off—even if you can't pinpoint why—consider other options. Don’t feel obligated to hire a CPA just because they’ve taken the time to meet with you.

How Much Does It Cost to Hire a CPA?

Hiring a small business CPA can vary widely in cost. Here's a quick rundown:

• Hourly rate. CPAs who work by the hour can charge anywhere from $150 to $250 or more. The price often depends on their experience and where you're located. Bigger cities might have higher rates.

• Fixed fee. Some CPAs might offer a set fee for specific services, like filing taxes. For instance, it can cost between $1,000 to $1,500 or more to prepare your annual personal and business tax returns.

• Monthly retainer. If you need ongoing services, like bookkeeping or full-service payroll, a CPA might charge a monthly fee. This could range from $100 to over $200 a month, depending on the service.

Common Mistakes to Avoid When Hiring a CPA

If you decide to hire a CPA, watch your step and avoid these common pitfalls.

• Don’t hire based on price alone. Remember, you often get what you pay for. A slightly pricier CPA with more expertise might save you more in the long run. Freelancers have unique needs, so ensure your CPA has the experience to match.

• Make sure they’re tech-savvy. The world's moved online, and many modern accounting tools offer efficiency and transparency. If a CPA is against using these, it might be a red flag.

• Don’t be afraid to ask questions. It's your money, after all. Get all your questions answered upfront and trust your gut. Choose a CPA who will keep you informed and meet as often as you need.

Simplify Your Accounting with Found

While a CPA can offer in-depth financial planning and tax advice, it can be pricey and more than some freelancers need. If you're looking for a cost-effective alternative to figuring out how to hire a CPA or bookkeeper, Found’s all-in-one banking platform manages your bookkeeping, tracks your tax deductions, and even lets you pay your quarterly federal taxes through the app. 

When you’re ready to bring a CPA on board, Found has you covered, too. Say farewell to back-and-forth communications and confusing discrepancies, simplifying how you work with your accountant. Sharing your Found account information with your accountant is simple and easy. They’ll be able to access your account activity, profit and loss report, and tax documents. It’s safe and secure, and you can edit or remove access at any time.

So whether or not you’re working with a CPA, a Found account might just be the financial assistant you've been searching for. Sign up for free today.

The information on this website is not intended to provide, and should not be relied on, for tax advice.