It’s that time of year again. Small business owners are reaching out to their accountant for the annual checkup. A once-a-year interaction with their CPA, usually to send over a box of receipts and a few hard scrabble reports so the accountant can pull together enough of a picture to prepare some tax returns.
If you are meeting with your CPA once a year, then you are probably not getting enough out of the relationship. Think about it – you are relying on someone you have not talked to in a year, during their busiest and most stressful time, to meet some compliance deadlines and, if you are lucky, give you some advice about last year’s results.
A business owner knows how crucial it is to always have accurate records, especially when relying on that
data to make critical decisions. Checking in with your accountant once a year doesn't make sense if you want to be proactive instead of reactive. It's often too late if you wait this long because errors need to be caught early and adjustments may need to be made as your business grows.
It is not hard to see how this annual checkup model does not result in proactive advice.
That being said – this is not the fault of the CPA. You set up the arrangement because this is the way the system is built. Quite frankly many people don’t know there is an alternative way – it is what you are supposed do, right? Now is the time to take responsibility for your business and use the knowledge and counsel of your CPA to your advantage. This means working with your CPA on a proactive basis, on this year’s operations – not last year’s results. You really need a year-round trusted advisor who is more than just a tax preparer. Your CPA should be helping you grow your business right alongside other advisors like your banker, your attorney and your insurance agent.
It's important to have a close relationship with your accountant so that they are fully aware of the goals, issues, and results of operations within your business. A valuable accountant is not just someone that files your taxes at the end of the year; they are also there to coach and advise you about business issues and opportunities. If they are unaware of your situation until the following year, then they can't help you think strategically about the future. An experienced CPA can offer business advice around budgeting, forecasting, expense management, growth strategies and other topics that you should be looking into to add value to your business when the time is right.
If you are not using your CPA correctly, then use the annual checkup to own up to that and make a change
in the relationship.
David S. Burnett, CPA | Accounting Bullpen LLC