Sound small businesses and solo operations share one factor with large organizations: the benefit of having an accountant to look over financial records, not only once a year for seasonal income tax reporting, but regularly.
The wise entrepreneur understands that an expert eye catches errors that will cloud judgments surrounding the administration of his or her business.
Meeting with your accountant near year-end – before the hasty pace of tax season – is ideal for uncovering what-if scenarios, obtaining risk analysis assessment, and getting a start on next year’s sales projections based on recent trends.
This process begins with an examination of your financial transactions for accuracy. Your accountant isn’t going to judge you for your bookkeeping skills. Instead, an accounting expert aims to help you with your business management duty.
You probably never think about the fact that the accounting business gets a little slow during November and December. In fact, you probably prefer not to think about accounting at all until it becomes absolutely necessary. However, as you plan for next year, your accountant is an ideal, available resource, who can contribute key information that is relevant to your planning.
Because the responsibility for managing data rests squarely on the shoulders of the business owner, you can’t fob off serious number-juggling to your bookkeeper. Among the possible accounting issues confronting you are: inventory, subcontractors, payroll, travel per diems, meal reimbursements, and business use of a personal vehicle. Any or all of these issues demand your personal attention.
Getting advice from an accountant about fine-tuning your accounting measures results in the accuracy needed for sophisticated actions. Your accountant can help you make an easy leap to conquering the higher-level processes, such as preparing financial budgets, assessing your financial condition relative to peers, evaluating your progress over time, and devising cash flow projections for new initiatives.
Preparing in advance
Therefore, if you want a thorough understanding of what’s happening with your business, discussions with your accountant are crucial. Prepare for the annual dialog by developing a summary of your plans for growth and a description of circumstances affecting current operations. This may include your dependency on key customers for repeat business, your referral network, or marketing system, as well as relationships with primary suppliers. Maintaining this foundation requires cash flow. Your accountant will help you see if you’re on track.
Ask your accountant what bookkeeping matters need enhancement to better uncover your financial condition. There’s always room for improvement. Let your accountant shape some new guidelines to assure that key details don’t slip through the cracks. Then you’ll need to discuss operational and strategic risks your business is facing.
Small business owners seldom specialize in analyzing and tracking data, nor do they want to. But these practices are vital to your company’s financial health. Your accountant is the avenue for attaining input similar to that of a chief financial officer. He or she can create the road map you require to stay ahead of your competition.