As more financial advisors learn how tax planning can help their clients and grow their practice, more and more advisors will consider how to increase the tax-planning services they offer their clients. One option is to bring in a tax expert like a certified public accountant (CPA) who can help with forward-thinking tax planning, as opposed to simply filing taxes based on what’s already happened in the past.
If you’re thinking about that route, you have an important decision to make: should you bring a CPA in-house into your firm, or should you outsource that role? To help you make the best decision for yourself, your business, and your clients, here are five things you should consider.
1. Consider the Cost
Because of the economies of scale that outsourcing offers, bringing a CPA in-house may be more expensive than outsourcing the work. Of course, you should run the numbers on the options you’re considering, but when you consider a full-time salary, 401(k) matching, payroll, and many more items, it may be less of a headache and a much lower dollar amount to simply outsource the work.
2. Are You Able to Train Properly?
While you may be an expert as a financial planner and have experience managing your team, are you able to properly train a CPA, who has a completely different skill set, on what they need to do for your clients? Will you know if they are approaching things following best practices? Will you have protocols in place to make the best decisions and avoid costly mistakes?
You very well might be able to, in which case maybe it makes sense for you to manage them in-house. But if you aren’t sure you can do that, or even want to do that, it might make sense to consider outsourcing to people who have these protocols in place already.
3. Access to Experience
When you hire one person to become an in-house CPA, you get the benefit of working with them directly and utilizing their talents and experience. However, there is only so much experience one person can have. If your clients have unique or specialized issues, there is a chance that your one CPA may not have extensive experience in that area.
Whereas if you work with a team of five different CPAs, the odds will dramatically increase that they have experience working on that issue. Before making a decision on this, consider the type of work you’ll need performed for your clients, and whether one person will have the requisite experience to help.
4. Managing the Workload
How much tax-planning work do you expect to have in your firm? Will it take a full-time CPA 40 hours a week to get everything done? If there is more work than you can reasonably expect one person to handle, you should consider a team to get it all done. Yet if you are confident one person can handle everything, it might make sense to have them do it.
Another component to consider with the workload is how quickly you can get everything done. If you have high-net-worth clients with high expectations, a team with multiple CPAs might be able to get them an answer more quickly than one person managing a full-time workload.
5. What Commitment Level Is Right for You?
With a full-time in-house CPA, you are making them a member of your team just like your other employees. Those added responsibilities for you as the owner aren’t always easy or something to look forward to. If you’d rather focus on the actual work and less on managing people, your life might be easier if you outsource.
In addition, when you outsource, if you aren’t happy with the service, you can simply cancel the plan. If you hire someone in-house, you can let them go, but it’s often tougher to let a single person go than canceling a company’s service.
Should You Bring a CPA In-House or Outsource?
There is no one-size-fits-all answer to the question of whether you should bring a CPA in-house or outsource the role. Yet if you consider these five key points and understand your preferences, you should be closer to making a decision that’s right for you and your firm.
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About Heath
Heath Walters is a strategic tax planning specialist who partners with financial planners to provide behind-the-scenes tax planning expertise for the high-net-worth clients of financial planning firms. With over 20 years of experience as a CPA and Certified Tax Coach, Heath helps financial planning firms set themselves apart to ideal clients through coaching and specialized services that complement traditional wealth management solutions. Heath’s proven process for client acquisition has led to many advisors doubling their book of business in as little as 24 months. Heath has both a bachelor’s degree in accounting and Master of Science in Accounting from Appalachian State University. When he’s not helping financial planners reach their firm’s goals, you can find him spending time with his wife, Nancy, and their three children, Allie, Brianna, and Cooper, or fishing, grilling, and tackling home remodeling projects. He’s an avid Roll Tide fan as well. To learn more about Heath, connect with him on LinkedIn.
