questions

Here are a few suggestions on how you can make the best use of professional services and get the most value for your fees:

Be prepared to discuss your plans and objectives. CPAs are in the best position to advise you and serve your interest when they understand your goals.

Clearly explain what you expect from the CPA's services.

Save yourself unnecessary fees by keeping good records and not using professional time for routine work.

Keep your CPA informed of changes in your personal and professional life.

QUESTIONS TO ASK YOUR CPA ABOUT PERSONAL FINANCIAL PLANNING

What is the best way to allocate assets for maximum tax efficiency? Do I keep taxable, inefficient funds with high turnovers in my IRA or other tax-deferred account, and conservative, tax-efficient funds in my taxable accounts?

Should I set up a trust to accumulate funds for my children's education? What types of trusts are available? What are the pros and cons of each?

How can I lower taxes by shifting income to my children, and how much money can I give to them as gifts?

What is "second to die" life insurance, and how does it play a role in estate planning?

If I want to donate a stock I lost money on to a charity, how should I do this so I can maximize my tax savings?

What is my risk if I extend the holding period on a stock to 12 months to qualify for a lower capital gains rate?

Should I consider making a withdrawal from an IRA to pay college expenses? If I do, will I pay a penalty?

If I need to borrow money for personal use, what is the best source: home equity loans, 401(k) loans, banks, finance companies, brokerage firms or insurance policies?

How does the Roth IRA work? Can my nonworking spouse make a contribution to a Roth IRA if I am covered by my employer's pension plan?

What personal records do I need to keep and where should I keep them?

QUESTIONS TO ASK YOUR CPA ABOUT ACCOUNTING AND AUDITING

Which indicators of my company's financial performance should I be tracking weekly, monthly, annually? Should I calculate these key indicators, or should I ask my CPA to do it?

How do my financial ratios and percentages compare with the averages for my industry?

When do I need to set up an internal audit function?

As a privately held business, when and why would I need an audit?

How much is my business worth? Can you help me with a professional valuation?

What can I do to maximize the interest income from my business bank accounts?

What are five good ways to reduce my company's operating costs?

Should my business be on the accrual or cash basis of accounting? Why?

Should I use the FIFO or LIFO method of inventory accounting? What are the relative merits and drawbacks of each?

How can I speed up the collection of receivables? Should I offer extra discounts for prompt payments?

When should I write off a receivable as a bad debt? Is it worth taking the customer to court?

When paying my company's bills, should I take advantage of early payment discounts or pay late and use the float?

What kind of background should a controller have? Can you suggest guidelines for hiring the right person? Can you help me to identify appropriate candidates?

What forms of stock options make the most sense for myself and my employees? What is the difference between "qualified" and "non-qualified" stock options?

What is an "Employee Stock Ownership Plan (ESOP)"? How can I use it as a motivational tool and turn some of my "sweat equity" (as the company's owner) into cash?

QUESTIONS TO ASK YOUR CPA ABOUT FINANCING YOUR BUSINESS

I am in the market for a bank loan. What kinds of information should be included in the business plan I present to bankers? How should this information be structured?

What are the key differences between debt and equity financing? Which is better for my company?

How can I tell if my company has reached the limit of its borrowing capacity? Can I comfortably handle additional debt?

What is "asset-based financing?" Is it often a "last resort?" What can I borrow with my asset base?

Should financing terms be linked to the useful life of the asset being financed?

How can I hedge or protect against a rise in interest rates that could substantially increase my borrowing costs?

What is "subordinated debt?" How can I use it to finance growth even after my company has maximized its bank borrowing?

How does factoring work? Is this a suitable way to raise money for my business? Who offers these arrangements?

QUESTIONS TO ASK YOUR CPA ABOUT ORGANIZATION AND MANAGEMENT

Should I structure my business as a corporation, a partnership or a proprietorship? What are the relative advantages and disadvantages?

What is an "S corporation"? How does it differ from a "regular" corporation?

What kind of people should I ask to join my board of directors? How often should I hold board meetings and how should they be structured?

When I need larger quarters for my manufacturing/warehousing/office operations, how should I acquire the space? Should I buy or lease?

What kinds of questions should I ask when I negotiate my lease?

If I buy a commercial property should I put it in my name, my spouse's name, my children's name or my company's name? What are the relative advantages and drawbacks of each approach?

Is it a good idea to hold management retreats? How should these sessions be structured?

When does a business need a full-time controller? What background should she/he have? Can you suggest guidelines for hiring the right person? Can you help me to identify appropriate candidates?

When do I need an internal audit function?

QUESTIONS TO ASK YOUR CPA ABOUT CASH MANAGEMENT

What kind of check-writing controls should I have in place to prevent employees from misusing company funds?

How can I help protect myself against embezzlement or other unauthorized use of funds?

How do I prepare cash flow statements, and how do I use them as management tools?

What can I do to maximize the interest income from my business bank accounts?

Should I have large compensating balances in the bank, or am I better off paying higher banking fees and reducing my compensating balances?

How do I determine my breakeven point? Why is this critical? What steps can I take to lower the breakeven point?

What are five good ways to reduce my company's operating costs?

Do I need a credit policy? What should it cover and how do I set it up?

How can I speed-up the collection of receivables? Should I offer discounts for prompt payment?

When should I write off a receivable as a bad debt? Is it worth taking the customer to court?

At what point should I cut off delinquent accounts from additional credit purchases?

Are there ways of maintaining marginal-credit accounts as customers without accepting undue risks of non-payment?

When paying my company's bills, should I take advantage of early payment discounts or pay late and use the float?

When should I consider putting my company into Chapter 11? What are the major benefits and drawbacks?

QUESTIONS TO ASK YOUR CPA ABOUT SALARIES AND EMPLOYEE BENEFITS

What is a "flexible benefit" plan? Should I establish one for myself and my employees?

Can I use phantom stock to motivate employees without giving them equity in my company? What other alternatives are there to reward key employee?

What is an "Employee Stock Ownership Plan (ESOP)?" How can I use it as a motivational tool and turn some of my "sweat equity" (as the company owner) into cash?

What steps can I take to deal with the rising cost of employee health insurance?

Can I reduce benefit costs by using independent contractors in place of certain employees? What are the drawbacks to this approach?

Should I establish a 401(k) plan? Should it be funded entirely by my employees or by a mix of employee and company contributions?

What is the difference between a "defined benefit" and a "defined contribution" pension plan? Considering my age and income, which one is best for me? What is a "cross-tested profit sharing plan," and should I consider that option?

Can I skew the greatest bulk of pension benefits to my key employees, or does there have to be an equal distribution of benefits?

What are "rabbi" and "secular" trusts? Do they make sense for my business?

How and when should I take deferred compensation?

What forms of stock options make the most sense for me and my employees? What is the difference between "qualified" and "non-qualified" stock options?

How does the IRS determine reasonable compensation? How can I maximize my income without crossing this threshold?

QUESTIONS TO ASK YOUR CPA ABOUT COMPUTER SYSTEMS

When buying a computer system, should I purchase the hardware or the software first?

How do I know when it's time to upgrade my computer system?

If I need to upgrade my computer system should I opt for a series of separate PCs or a local area network (LAN)?

Currently, I use my computer system for number crunching and word processing. Can I use it to manage administrative, sales and manufacturing procedures?

How vulnerable is my computer data? Do I need to take special precautions to prevent tampering or loss due to accidents or viruses?

Considering the price of PCs today, is it more cost-effective to buy or lease them? Does the same hold true for the more expensive mid-range computers?

At what point in my company's growth should I consider hiring a director of information systems?

QUESTIONS TO ASK YOUR CPA ABOUT BUSINESS VALUATION

What are the value drivers that influence the value of my business?

Are rules of thumb useful in estimating the value of a business?

When is it appropriate to take discounts for lack of marketability or minority interest?

How do you determine the amount of goodwill?

What impact does book value have on sale price?

What are the valuation requirements for a family limited partnership?

Should I gift or sell shares to my children?

Can you value the assets of my company in addition to the stock value?