There are quite a few tax firms out there. It can be hard to tell one from another. While there are a number of factors to consider when hiring a tax firm, here are several tips on how to whittle down the list.
Identify what you need from a tax firm.
Do you need tax returns prepared, do you need accounting work associated with the tax returns, do you need someone who can find strategies to minimize your tax liabilities, do you need someone to help with a tax dispute or litigation, or do you need some or all of these services?
Most tax firms only focus on one or more of these areas, while others provide more of a one-stop-shopping experience.
A la carte tax services are fine if that is all you need. In fact, if you know what you need and are able to buy tax services a la carte, you may find that the cost is much lower and the technical expertise is much higher. This is particularly true if you have a specific need that you can identify that falls within the services offered by a specialty tax firm.
The trade off is that it is often up to you and the specialty tax firm to work together to ensure that the tax firm has a full understanding of how their service(s) fits into your overall plan and goals. You do not want to save a bundle on taxes only to find that the tax savings have to then be spent on extra accounting work to capture the tax benefits, for example.
The opposite is true for full service tax firms. You may end up paying for services that you do not use or benefit from. This may be worth it if there is comfort in knowing that the resources are there if needed at some point in the future.
Find the right sized tax firm.
There are some very large tax firms. These firms usually only service very large clients. There are solo tax firms. These firms usually service smaller clients. Somewhere in the middle there are tax firms that service mid-market clients.
The larger firms will bring more resources to bear. This may be what you need. These resources are not free, however. They can come with a hefty price tag.
Many of the largest clients even seek out boutique tax specialist tax firms to provide specific needs. Again, this a la carte strategy is often used to reduce costs and will ensuring there is sufficient technical expertise needed to get the job done. Clients who have survived the financial recession and are now always looking for ways to reduce costs may find these specialty tax firms particularly helpful.
Find the right tax advisors in the firm.
Even going to the biggest and most expensive tax firm does not mean that the right tax advisors are the ones that will be providing services to you.
This is often a complaint clients have about the biggest tax law and biggest accounting firms. They may employ some of the brightest tax talent, but those star employees are not likely to be the ones that work on your tax matters. If you are not the largest client for the firm, then you may find that the large tax firm does not assign the A team members to work your account.
In fact, the tax partner assigned to your account may not even spend very much time on your account. Instead, a team of very junior accountants with little to no experience may be the ones actually performing the services and they may get very little direction or instruction from the partner. This works for some clients, especially clients who are really just buying the brand name or status of having a bigger firm working the account.
This is not acceptable for some clients. Also, there are some tax services that simply cannot be delivered effectively in this manner. These clients will often hire tax advisors at smaller firms who will actually do most of the work themselves–for the same cost as the junior accountants at the larger firms–or who are more directly involved in overseeing the work.
The importance of this last point cannot be overemphasized. Selecting the tax firm based on the tax advisors who will actually be providing services for you is critical. You often want the A team members, not the B team.