You may decide to outsource your accounting needs and hire a Certified Public Accountant (CPA). We recommend finding one with farm and ranch expertise; farms enjoy different tax benefits than other businesses and most tax accountants don’t see farm returns often. A farm CPA will be able to advise you on the tax implications of every major decision you’ll make as a farmer. Finding a farm accountant in your area may not be essential. Tax law doesn’t vary from county to county, and many firms prefer to handle records electronically anyway.
FINDING A FARM AND RANCH ACCOUNTANT IN MONTANA
A great place to start is with the Montana Society of Certified Public Accountants (MSCPA). They have a free online referral service called “Find-a-CPA.” It’s easy to use and is the only directory in Montana that can be searched by area of expertise. It’s worth noting that this directory won’t yield an exhaustive list; not all certified accountants in the state are MSCPA members, and some members may not have opted to list their areas of expertise on their profile. (CFAC is currently working with the MSCPA to encourage more member accountants to list their Farm and Ranch areas of expertise.)
Some other ways to find a farm CPA in your community include:
- Identify other operations similar to yours and ask who their accountant is
- Network and mingle at events hosted by the Montana Chamber of Commerce or your local Small Business Development Center
- Ask your banker or attorney
- Ask acquaintances at local clubs or organizations you belong to
- Contact your local extensions office
EVALUATING YOUR FARM AND RANCH ACCOUNTANT
Contact the Montana State Board of Public Accountants or use their free online directory. A detailed description of how to use the online directory follows:
- Scroll down to “Licensee Lookup” and click on “Search for a Licensee.”
- Enter the person’s first and last name. You need not enter anything into the other fields. In fact, this particular database works best when searching for individuals by name; it is not designed to handle searches by, for example, business name, license number, or city.
- Note the difference between a “CPA Permit” and “CPA Certificate.” You want someone with a permit; those with a certificate lack the 2000-hour experiential component necessary to qualify as fully licensed accountant.
- Confirm that the individual you’re vetting has an “Active” license status, as opposed to one that is “Inactive,” “Expired,” or “Terminated.”
The IRS has a helpful list for what to do next. It’s geared towards finding a tax preparer (as opposed to a CPA who can help with financial planning) but is still useful. It includes tips like checking the Better Business Bureau to vet the accountant’s history.
Some questions to consider asking in advance of your first meeting with your farm CPA:
- How long have you been a licensed accountant?
- How many other farm/ranch business do you and/or have you worked with?
- How similar are they to my business?
- Do you work mostly with sole proprietorships? Limited liability corporations (LLC’s)? Corporations?
- Can you help me with financial planning?
- Can you help me with tax preparation?
- What do you charge? How do you calculate your fees? (By project? By the hour?)
Many accountants will ask that you bring tax returns from the previous year to your first meeting. Three to five years would be even better. If you’ve already started farming, bring invoices from major purchases like tractors or other big equipment. Contact them beforehand to confirm what to have on hand.
In the end, exercise due diligence. The accountant you choose could play a vital role in the financial health of your business!