Questions to ask your CPA

Organization & 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?

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?

Continuity and Business Succession

  • Should I have a buy-sell agreement with my partners/shareholders? Should the agreement be funded with life insurance?
  • How can I tell if my business insurance is adequate in terms of losses covered and dollar amounts of coverage? Do I need fidelity bond insurance?
  • When buying business insurance, is it best to work with a broker representing various carriers or an agent tied to a single carrier?
  • How can I establish a succession plan that ensures continuity in my business when I retire or die?
  • In a family business, what are reasonable guidelines for employing, promoting and firing family members?
  • Is it good idea to hold family business retreats? How should these sessions be structured?

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?

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?