One of the most common complaints I hear from the CEOs of small and mid-size companies is that "My CPA does not understand me, or my business". Like "mis-understood" husbands this is often the prelude to a new relationship.  Because I believe continuity in a business relationship is important, I often adopt the role of Corporate Counselor and try and diagnose the issues in this relationship.  Like marriage, the cause of most breakdowns is communication failure and failed attempts to change the other party. 

The CPA's business model is to provide tax and audit services to a large number of clients - using a hierarchical staff model to attend to different tasks.  A typical small CPA firm will have at least 80 to 100 clients.  While some CPA firms may offer financial advice, it is unrealistic to expect too much of this relationship.  Most CPAs have little or no CFO expertise, other than as a manager of a CPA firm.  They also have little time for consistent  and in-depth consulting on issues like cash flow management, profitability analysis and exit planning.  This is often the number one source of frustration from the CEO who is expecting the CPA to act in the role of consigliere or close trusted advisor intimately involved in their business and providing weekly or monthly input.  The CPA's strength is in having a very deep knowledge of accounting policies and taxation rules.

And it’s not your CPA's job to produce financial statements.  In an article on Chief Executive Blog, Terry Weaver makes this clear. “First, although there are a lot of exceptions, most CPAs do not have CFO experience. They report the news, they don't forecast or shape the news.” Although your CPA is an excellent resource on taxes and accounting regulation, they may have little experience with running a company – other than a CPA firm. Terry goes on to say, “Secondly, it's generally not their job, as they perceive it. If you hire them to prepare monthly statements and do your taxes, they actually believe you're going to read (and understand) the monthly statements and that the data you gave them to prepare them was accurate. It's like wondering why the scorekeeper at a football game didn't call better plays."

So how should the CEO work with the CPA firm?  Understand what you need and find the best CPA for that job.  If you intend to grow quickly, then maybe you should start by looking for a larger firm.  Many companies grow to be their CPA' s largest client - often causing a lack of fit that aggravates the relationship.   If your CPA wants to provide business advice, ask how they will be able to maintain professional integrity if you subsequently require an audit.  There are professional conduct rules which may preclude your CPA from providing an audit if they have been involved with the company's accounting.  Ask about their stance on tax filing - do you want an aggressive or conservative posture and will they help with interim tax planning?