As a nonprofit organization, you probably spent the last year and a half doing all you could to serve your members in a time of deep turmoil, and now you may be looking at a list of deferred tasks. One of those items might be the routine CPA firm request for proposal (RFP).
In anticipation of their fiscal year end, many organizations have started to ask themselves questions, such as did their accounting firm bring the additional resources they required during the depths of the pandemic? Did the firm offer new solutions to new issues? Did the firm have a good grasp of the federal COVID relief programs and the roads to forgiveness?
If your answer to any of these questions is “no,” it may be time to start the RFP process. Here are six tips for managing the process — some pointers are timeless, and some address the world we now occupy.
1. Stick with a manageable number of experts.
An RFP process, done well, will take a serious investment of time. Sending RFPs to more than four firms will make for an even more considerable investment, possibly needless.
Many CPA firms dabble in serving nonprofits because the audit work can fit nicely with a generalist firm's downtime. Seek out firms that explicitly state they are experts in serving your niche. It’s a good sign if the firm’s website provides nonprofit-specific resources, and if the firm belongs to relevant trade organizations.
Ask around. Boards, other membership organizations, bankers, attorneys, investment specialists and insurance experts can often give you good leads.
2. Outline your specific needs.
Many nonprofits need a firm that will help them achieve their next level of growth. Some prefer a firm that’s recognizable to their members or their bank, or can meet needs outside of audit and tax requirements, or that offers lower fees.
Don’t be shy about what’s important to you and what you are seeking. Getting clear on your top asks before beginning the RFP process will save you valuable time and will help you and your team have more straightforward discussions with prospective firms.
3. Include essential questions to help narrow down your list to firms with the highest value.
Your RFP should include standard questions that get you the basic background you need and essential questions related to your projects. Many online resources provide questions you may wish to ask prospective firms, but don't merely cut-and-paste their suggestions — tailor your RFP to your organization’s specific requirements. Some areas you should consider are:
- Firm reputation. Your accounting firm’s letterhead is the first thing a reader of your financial statements will see, so the firm’s reputation inures directly to your organization. Questions about the firm’s size, its values, its growth, its stewardship (particularly during difficult times), its insurance coverage, its financial soundness, its litigation history, its satisfaction survey results, its peer review — these are all fair game.
- The people. While you may hire a firm, its people are your day-to-day contacts, and you need to know about them. What is their educational and professional background? How does the firm keep them once they hire them? What is their nonprofit experience?
- Services beyond audit and tax. Is it essential for you to have more than an audit/tax CPA firm? Are there other services you’ll want the firm to provide later down the road? Ask how the firm aided its clients during the chaotic early days of the pandemic. Were they able to jump into action to serve a range of sudden new needs?
- Fees. Are you going to get nickel-and-dimed from this point forward? What is the policy of the firm’s billing for casual consulting? And even though you ask for a fixed fee, what are the add-on expenses you should anticipate?
- Non-routine questions. If you ask your potential accounting firms standard questions, you will get standard answers. Go outside the box. Try questions like, “We are speaking with two of your competitors, what makes you different?” “What does your firm value, and how is that apparent?” “What makes a good client to you?” The answers will reveal a firm that views you as a valued new client versus one that just puts in minimal effort.
- References. Everyone asks for them, but no one calls them. A peer-to-peer conversation could bring up points you may wish to investigate further. And don’t limit yourself to the listed references — if you know of peers who are using the firm, contact them.
- Virtual capabilities. Questions about how audit and tax services are conducted have never been more relevant. Even if your team is in the office, your potential CPA firm may not be (and vice versa). Inquire. Ask if the firm’s associates are working remotely and how remote collaboration may impact your audit and tax process. What technologies does the firm use? How are the services that typically require in-person presence being handled? Find out how successful their virtual approach has been by asking the firm and their references.
4. Make the proposal and selection process clear to all participants.
A proposing firm has likely put in more than a week’s effort on your proposal. Be kind — let them know where it goes from here and what the expectations will be (e.g., will there be an additional interview? When will you make a decision?). Defining a clear timeline will be helpful to all.
5. Spend time talking with team members from the prospective firm before they begin their pitch.
Relationships are critical and begin with the proposal process. Invest an extra 30 minutes for a warm meet-and-greet with the proposed team before they jump into their proposal. It helps set the stage for a beautiful relationship, makes for a better proposal and gives you an idea of the people who will be serving you. And remember — it is only 30 minutes of your time, while the firm will have likely spent 12-20 hours pulling your proposal together.
6. Avoid technical difficulties by ensuring your team is up to speed on your virtual meeting software.
Usually, there is an interview process with the audit committee. The virtual environment is made easier by Zoom and other platforms, but it can still be tricky to conduct these interviews smoothly. Consider these tech steps:
- Don’t assume your audit committee members have used Zoom, Webex or Microsoft Teams before and make sure they have adequate connectivity. If you think there will be issues with everyone using one of these platforms, you may want to set up a telephone call instead.
- Make sure you understand how to allow the presenting CPAs to share their screens so that accompanying PowerPoints or other presentations can be easily viewed.
- Use your platform’s Mute All function so that attendees with distracting noises can be silenced.
- Use the Waiting Room function so that the next firm up does not inadvertently join another firm’s presentation or an audit committee debrief.
- If you do not have a Zoom account, make sure the presentations do not exceed the time limit for free group calls.
A strong RFP process will help you find the best partner for your organization’s needs. These six tips are a good place to start to set up your nonprofit for a successful and streamlined path to a great CPA firm.
To learn more or if you have questions, contact our Nonprofit team.
