Hopefully, you met the deadline and had your federal income taxes filed on time this spring, which means you don’t have to have any contact with your accountant for eight or nine months, right? Not so fast. Accountants aren’t just for taxes anymore. You should talk with your accountant on a regular basis throughout the year.
If your argument against that idea is you can’t afford to pay for the services of an accountant any more than is absolutely necessary, you may want to reconsider. Checking in frequently with a numbers expert can actually save you money in the long run. At the very least, the hours you pay for throughout the year will decrease the amount of hours it takes for tax preparation.
What else can your accountant do?
Your accountant can create forecasts and budgets, and produce financial statements like balance sheets, profit and loss statements and cash flow statements. More importantly, your accountant can teach you how to read and understand these financial balance sheets, budgets, forecasts and statements so you can use these reports to make well-informed business decisions.
Year ’round Networking
Another good reason to check in with your accountant periodically is so you are in the forefront of his or her mind and high up on the phone contacts list. Why? Because accountants know many other business owners and can recommend your company to them if they ever need a portable restroom provider. And your accountant should be able to introduce you to knowledgeable bankers, attorneys and other professionals who have the ability to help in your business endeavors should you need their services.
An Eye on Government Regulation
It’s your job to keep track of regulations regarding your business. It’s an accountant’s job to keep track of government regulations regarding accounting, tax planning and reporting, for example how to properly file quarterly and annual payroll returns, 940s, 941s, W-2s, W-3s and 1099s. Let someone else keep an eye on the IRS while you keep an eye on everything else. I often call my accountant in a panic when I get some vague letter in the mail from the IRS. It helps me sleep at night knowing he’ll deal with it.
Get Cash flowing again
A company can be profitable but still fail because of poor cash flow. Despite having done a lot of work and being owed a lot of money, the cash-poor business can’t meet payroll and other obligations. Your accountant can help you get a handle on your accounts receivable, understand your expenses and track your break-even point.
An accountant who understands small businesses can point out inefficiencies and weaknesses in a business by doing some simple financial statement analysis. If there is a cash flow issue, an accountant can look at operations and suggest changes in billing and collection procedures that may help. A good small business accountant also can help a company make better use of its resources to increase efficiency and improve profitability. Finally, your accountant may, after analyzing your expenses and break-even point, suggest new pricing strategies for products and services.
Technology advice
Your accountant should be familiar with accounting software and advise you on what you need to keep up with day-to-day bookkeeping tasks and make the transition of reports seamless when it is time for him or her to prepare your taxes. Having your business use software that’s compatible with what your accounting firm uses will save time and headaches. It will ultimately cut down on the time spent (and the hours billed to you) for the big job of tax preparation.
Your accountant can help you create, set up, organize or revamp an accounting system for your company if yours has been lacking. And if you purchase new accounting software, your accountant can probably provide setup help, consulting and training. A good accountant also can discuss the pros and cons of cloud-based or SAAS (software as a service) bookkeeping solutions for your business.
Looking to Grow
If you’re looking for financing to expand the business, consulting your accountant should be your first step in the process. He or she can help you gather and prepare the appropriate documents, help write or update a business plan, and point you in the right direction for obtaining a loan. Consider taking your accountant with you when you meet with lenders since they may already have a relationship. If you are not successful obtaining funds from local bank sources, your accountant can help you with other possible financing sources such as SBA loans, secondary lending markets or individual investors.
Long-Term Planning
Is your business structured to your advantage? Maybe you’re considering incorporation or pondering whether to buy or lease a company vehicle. A good accountant should be able to tell you how changes would affect your taxes and your business’s growth. Another question your accountant can help you answer is how much revenue your company needs to afford hiring additional employees.
While these types of questions can be answered in a strategic plan, succession plans are equally important and also something your accountant can help with. Whether you are looking to retire or just decrease your ownership percentage, it is important for ownership transfer to be in the best interest of all parties involved. Accountants can help whether ownership is to be gifted to children, sold to key employees or sold to an outside party. Even if retirement is not imminent, a succession plan should be developed in case of catastrophe. And in the event of a sale, it is important that your business be valued properly. There are several ways to value a business, and an accountant can help you make sure the appropriate method is used for your business.
Objective Advice
The real benefit to having an accountant you trust and consult with regularly is objectivity. It’s hard to look at your own company objectively. As the owner, you’re too close to the situation. You know the company’s people, its problems, and its past. Someone who’s only concerned with cold, hard numbers can give you honest, straightforward advice without being swayed by emotion. So give your accountant a call. But don’t be surprised if he thinks he’s pulled a Rip Van Winkle and slept through most of the year if you traditionally only connect at tax time.
