Questions to Ask When Hiring a CPA
Rob J. Perez, CPA, the Innovation Institute recently spoke with The Ambulatory M&A Advisor about the importance of having a CPA or other qualified accountant on a healthcare business’ advisor board. To kick off the New Year, Perez helps readers answer some of the more pivotal questions that need to be asked when a business aims to hire a CPA.
What do I need to look for in a CPA for my business?
Perez: I think one of the most important things is that healthcare is an interesting niche. When healthcare providers are looking for somebody with a CPA or accounting background, they are really hoping that somebody has some prior experience.
That prior experience is either they have worked on audits or consulting engagements related to healthcare providers, or they have worked for a provider and are looking to get more on the accounting side of an institution, be it a hospital, physician group, or other healthcare entity.
Really, you want to look for a foundation and that they have the knowledge. It is an interesting environment and is very unique…when providers are looking for somebody, the primary focus need to be experience.
Should I examine their former client base?
Perez: See if they have worked for any healthcare providers like insurance companies or hospitals, etc. When you are working as an accountant on a variety of industries, even if someone is just a supplier of a healthcare institution, you get some knowledge of what is going on in the hospital or provider market. Just the involvement by that company with a healthcare provider would provide some insight to the inner workings of how a healthcare provider functions.
How available should my CPA be for when I need them?
Perez: If you are working for a profit, or healthcare not-for-profit provide you need to realize those are two drastically different environments. Non-profit accounting is more like governmental accounting, and obviously in for-profit you are doing 10 Qs all of the time. When you are an accountant you are basically an exempt employee.
You are not getting paid by the hour, you are getting paid by your wage. You have to be available. If there is a crisis, you have to get financial information out, it takes 12-15 hours, then hey….you have to do that.
I think that is understood in our industry. If you have worked for a CPA firm like I have, it didn’t matter how long it took you to get that job done, you just had to get it done. If you were burning the midnight oil and working consecutive 10-15 hour days, that is just what the business is.
How should I plan to pay my CPA? Is it up to them or my business how this happens?
Perez: Usually, most healthcare providers will not let a CPA go the hourly rate. Take Baylor hospital as an example. If a CPA has to perform an annual audit on the hospital, they are putting all of the financial information together. The system offices aren’t going to say ‘Lets’ hire a bunch of these accountants at 200 dollars an hour,’ because then they would just murdered in bills.
They would say, ‘Let’s audit the hospital. The cost of that is going to be X thousand dollars. We are going to provide X amount of money to get the job done.’
On an exception basis a business may hire by the hour. Let’s say the business got sued and needed a forensics accountant. They might do that on an hourly rate, but for the most part they are paying based on what the end result will be.
How important is experience with handling multiple entities at once?
Perez: I think it is very important. It is all a part of that familiarity with healthcare providers. Everybody thinks of a healthcare provider being a doctor or a hospital, but there are so many other external outpatient providers that are out there like ASCs, urgent cares, imaging centers. They have to have familiarity with the total number of providers on the healthcare side. Having this knowledge would be very helpful. You don’t want to hire an accountant that is asking ‘What is this? What is that?’
You want them to have some prior knowledge in working for that type of entity.
How often should I communicate with my accountant?
Perez: Let’s just say you own clinics, and in that environment, I believe accountants are seen as trusted advisors and are being contacted monthly at a minimum. There is a reaching out to those individuals. From the financial perspective in the healthcare world, the numbers are kind of tricky. You can charge 2,000 dollars for an MRI, but that insurance company may only pay a certain amount. It’s not a simple environment from an accounting perspective.
That is why big organizations have a ton of financial individuals in their company. They are engaged every day, and are engaging other department heads within the business environment every day.