I wrote this article for Step by Step Fund Raising titled
by Carol Topp, CPA
Your nonprofit needs professional accounting help, but a good CPA can be hard to find. You desire someone who is knowledgeable but understandable, experienced but still affordable, and professional yet interested in your mission.
How to find a CPA to help your nonprofit:
- Tell your staff, members and volunteers of your need and request that they ask friends and neighbors for referrals.
- Mention your search for a CPA in your newsletter.
- Look over your member or donor list for CPAs and call to see if they are qualified and interested.
- Join an on line professional network like LinedIn.com, join some groups and post your need.
- Call your state CPA society for referrals. WebCPA.com lists state CPA societies at.
- Ask other local nonprofits for their CPA’s contact information.
- Use an on line matching service such as Accountants for the Public Interest that matches volunteer CPAs to nonprofits at.
Finding a qualified CPA is the just the beginning. You also desire a good working relationship that benefits your nonprofit more than it costs.
When you work with an accountant:
- Be specific about the task
- Ask for an estimate of their fee
- Request an engagement letter that will spell out the specific tasks and estimated cost
- Inquire if the charges can be reduced. Some CPAs will offer a discount if you can delay work until after tax season.
- Discuss how much of the work your staff or volunteers can do to help reduce fees.
- Ask for lower cost alternatives. For example, a review of your financial statements may suffice instead of a full audit which is much more costly and time consuming.
- Be prepared to ask questions, read and learn on your own
Seek out an accountant that has the ability advise you about the financial side of your nonprofit. You should feel comfortable with him or her and be free to ask questions. A good accountant is not just a bean counter; they are also a business advisor. They should explain issues and financial statements in a language that is accurate, yet understandable. If you leave a meeting with your accountant feeling confused, you should find another accountant.
Ask a potential CPA these questions:
- How many nonprofits do you have as clients? Hopefully, the accountant has clients similar in size to your organization. Size is usually measured in staff size, number of clients served or annual revenue.
- What is your area of specialty? Some CPAs conduct audits while others specialize in preparing the annual IRS Form 990. Select an accountant that matches your needs.
- With whom will we be working? In medium and large accounting firms there are several layers of management. The person doing the original interview may not the one doing the work. Alternatively, in a small or solo firm you will probably work with only one individual.
- May I see your biography or Curriculum Vitae (CV)? Look for participation on church or community boards, published articles and professional memberships.
- Can you explain to me the reporting requirements for my nonprofit? This type of question is really a test to see how well the CPA explains IRS guidelines. Is their explanation understandable to you or do they lapse into accounting jargon?
- Do you charge by the project or by the hour?
- Am I free after this engagement to call you with questions? Will I be billed for the phone call?
After their first audit, a small, but growing, nonprofit asked their CPA, “ How do we compare to other nonprofits? What can we be doing better?” The CPA was unable to answer their questions. He was good at number crunching, but he could not see the bigger picture and seemed unable to offer advice. The director was quite disappointed. They used the techniques mentioned here and found a qualified, helpful CPA with a reputable firm that guided them through many successful years of expansion.
Carol Topp, CPA //