I think it's an important step in your "due diligence" to have a CPA review the financial information of the practice before you sign any contracts with them. Don't forget, when you buy into a practice, you're not only buying into their patient base, receivables, and other assets, you also become responsible for their liabilities as well.

Looking at the practice's finances is no different than peeking under the hood of a used car you plan to purchase.

A while back, I worked with a client who was offered a position to join a one-person practice. Upon review of the corporate tax returns of the practice, we discovered that the practice was paying substantial payroll tax penalties on a regular basis. We also saw that the practice was borrowing more money each year to pay its overhead and the physician's salary. Because of my review of the financial information, my client decided to postpone buying into the practice until the owner cleaned up its finances. Otherwise, the risk of ownership would far exceed the anticipated benefits.

The cost for a CPA to review the finances of a practice is based on the time the CPA will need to spend. When working with a professional, it's always a good idea to get an estimate up front.

Zip Code: 01801

Thanks Andrew. Really appreciated the answer. But do you have a ballpark range for fees, in general? I sent out email inquiries of local CPAs but haven't heard. It seems like people are very busy. Thanks for that excellent example!

Zip Code: 94117

Or is there somebody you recommend for the Bay Area? Thanks again for the great site and advice for us newbs.

Zip Code: 94117

Check out our Directory of CPAs available at www.mdtaxes.com/offices.html. I've only heard positive things about the CPA listed from SF.

From mid-March through 4/15, CPAs are so busy completing their tax returns that they are not able to always return their calls and e-mails promptly. Now is a much better time to try to call a CPA about this matter.

Zip Code: 01801