If you are starting a business, you probably understand the operations behind the scenes.
For example, bakery owner knows how to craft a decent cupcake, and a plumber knows the cause and cure for a leaky faucet. But for many business owners, financial management is less intuitive – and seemingly less urgent – than these day-to-day activities that directly impact revenue.
This is when you should call in reinforcements: your accountant.
Most accountants would love to take on the role of your trusted business adviser. However, the problem is, that many small business owners do not take full advantage of this professional associate, perhaps because of disinterest in the entire “financial analysis conversation” or time constraints.
Based on our interaction with thousands of CPAs over the past decade, Sageworks Inc. recommends the following techniques to help you make the most of the time you spend with your CPA and receive more than tax returns:
1. Hire the best.
Be selective and choose the right accountant from the start. If they are to be a trusted business adviser for your company, then you should interview them like you would – perhaps more than you would – a typical job candidate.
Before engaging their services, ask questions about expertise and also about their communication style to be sure it corresponds to your operations. You should also agree in advance who the accountant will report to whether or not that will also include board presentations.
2. Communicate often.
Meet with them often enough that they know your business, its complexities and your struggles. If you only meet with your accountant at year end, they may not remember the details of your conversation and the details of your business.
The frequency of your meetings should depend on which services you have your accountant perform, but a good starting point is to meet with them once per quarter. The meeting doesn’t have to take all day. Call them now to get in the calendars for an hour or two. These quarterly check-ups may save you time in the long run, if it helps you stay on top of financial organization prior to year end.
3. Be prepared.
Prepare some questions in advance. You don’t necessarily have to study each line item of your general ledger ahead of time, but prior to your meeting think of questions you can ask regarding inventory levels, investments you are considering, financing sources, the health of your business compared to peer companies, etc.