Overlooking a source of good advice is almost as detrimental to your business as not planning for the future. But you don’t have to look far for valuable resources: Why not turn to your trusted small-business accountant?
Accountants handle more than bookkeeping and tax return preparation. They’re trained to analyze and interpret data; render expert suggestions; and evaluate situations that confront you.
If you’re not meeting regularly with your accountant, now is the time to start. Most accountants are able to schedule appointments before the busy tax season starts; so tap into this resource soon.
Before meeting with your accountant, talk with your bookkeeper to be sure that all transactions are correctly recorded, and identify any unresolved details that need accountant input.
For example, tax misclassification is an easy mistake for your bookkeeper to make, due to lack of communication. Many small-business owners pay nondeductible personal expenses from company funds but forget to inform their bookkeeper. As well, expenditures such as travel combine both personal and business elements and often are entered incorrectly.
Once you’ve talked to your bookkeeper, prepare a complete record of all your business transactions for your accountant, as he or she is a crucial resource for verifying the tax treatment of every entry.
Come up with a list of nonbookkeeping topics to discuss with your accountant. Consider business planning and management issues. An accountant is trained to evaluate your inventory control system and the efficiency of your personnel based on the information in your financial statements.
The right advice can provide you with insights into your operations. For example, your accountant may be able to explain how selling more of an item could reduce your profit margin. Or he or she may spot the fact that you have too many employees in one area and too few in another. Making suggested adjustments can boost your profits.
If you’re thinking of expanding your business, your accountant’s advice is vital. Before purchasing new equipment or adding to staff, you need to know the impact on cash flow.
Your accountant can determine the break-even point for any growth initiative. In many cases, seizing new opportunities may cost you too much. An accountant recognizes when the risk for running out of cash is too great and recommends alternatives. If you decide to borrow for expansion, the cash flow projection prepared by your accountant will improve your ability to obtain financing.
Accounting data is so essential to ongoing business operations that business owners require assistance protecting it. Cloud storage technology provides security and remote access to accounting records. This inexpensive technology enables you to outsource bookkeeping tasks, instead of hiring an in-house employee. Plus, you can give your accountant year-round access to your company’s financial records while you retain control over the data.
Your accountant is the proper choice for advice on a multitude of issues. Rely on these advisory services; you won’t find a better consultant.