A successful business owner has a wide variety of skills and knowledge, like how to remodel something, or how to motivate people, or how to sell your product and service. However, when it comes to accounting, many business owners seek outside help.
Most businesses have an accountant. But, too many people get less than they deserve from this vital resource. I think you should expect more from your accountant than plugging in numbers, running reports, and sending bills. I believe that you should have an accountant that you love, and who becomes a “partner” in your business.
And what does this partner of yours do? Here are a few suggestions.
- Design a management information system that gives you the information necessary to run your business. This includes, besides your balance sheet and P&L, an annual budget, a variance report, a cash flow projection, your AP and AR aging reports, and your job costing reports.
- Show you how to read and interpret your financial information and use it as a management tool. Your partner will help you develop your budget each year and then monitor and modify it with you through the year. Your partner will meet with you monthly to review your P&L and balance sheet, and help you figure out where any problems exist. They can work with you to assure that your job costing is accurate and gives you all the information you need to make good decisions. Your partner will help you solve or prevent cash flow problems.
- Stay on top of your tax situation throughout the year. You and your accountant need to meet quarterly to review your tax liability and to determine strategies to keep your taxes to a legal minimum.
- Act as trainer, overseer, and general question answerer for you and your bookkeeper. They will help you choose a new accounting software program and help you with the conversion. They help when you need to replace your bookkeeper and can assist with the hiring, training and the transition. They will be the extra set of eyes on your books to assure accurate records and to prevent the possibility of embezzlement.
This sounds like a great partner to me!
But, before you can love your new partner, you have to find the right accountant for your business. When choosing an outside accountant, you need to decide whether you need all the horsepower that comes with a CPA. You need a CPA if you need an audited financial statement for purposes such as bank loans, or if you have stockholders or partners who want an independent look at their investment in your business. Otherwise, a plain old accountant will do just fine. Whether you end up needing a CPA or not, I suggest you find a solo practitioner or a small firm. If you go with a large firm, make sure you get to work with one person in the firm and don’t get shuffled about.
When seeking an accountant, ask around. The perfect accountant will understand small business, and if you can find one familiar with construction, so much the better. Then interview this person, ask for references and check them out. Take your time looking for this long-term working relationship.
I know there are accountants out there (with and without the “Certified Public” part of the title) who will do all these things for you and for a reasonable price. You owe it to yourself and your business to find one of these accountants and make him or her part of your team.
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