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One of the most important working relationships you will have as a business owner is the one with your accountant. Having regular and candid conversations with these professionals can help strengthen and nurture this relationship while setting you and your company up for success.

While you’ll likely have many conversations with your accountant over the years, there are seven in particular that are of great importance.

With that, let’s dive in with the first one.

1. Goals and Dreams

One of the first and most important conversations you should be having with your accountant is about your goals and dreams. What do you hope to achieve with your short- and long-term finances? Is your long-term goal to accumulate wealth or leave money to the kids? How much do you need to fund your short-term goals? How much do you need to accumulate to finance your long-term dreams?

Understanding your goals and dreams will help you understand where you are now and craft a plan that will guide you toward realizing your objectives.

Another important question to consider in this conversation is: What do you envision for the future of your business?

The Future of the Business

Your business’ future will likely play a role in how you’re going to achieve your long-term goals. For example, if your goal is to accumulate wealth, the sale of your business may help you reach that objective.

Of course, the future of your business doesn’t have to move in this direction. Maybe you want to:

  • Hand the business over to an employee who has been trained and prepared for a leadership
  • Hand the company over to your children. If your goal is to pass down the business, consider whether you want to be paid for it or if you want to gift it to your kids.

In either case, a succession plan should be put in place. Consider what you want the transition to look like and what steps you need to take to ensure that your business is running like a well-oiled machine before you exit.

2. Financial Statements and Accounting Systems

Understanding where your business is at financially will help you make smarter and more informed decisions. Make sure that you’re having conversations with your accountant about your financial reports and accounting systems. These talks are important because they help you have a clearer picture of the company’s financial performance.

Here are some important things to cover:

  • Review your profit margins. Are they where they should be? If not, what action can be taken to improve them?
  • Identify areas of concern that should be addressed. For example, maybe your benchmarks aren’t up to industry standards.
  • Take a closer look at your accounting system. Is it functioning as it should be? Is the system up to date, and more importantly, is it accurate?
  • Check your internal control systems. Do you have appropriate safeguards in place to protect you from embezzlement and fraud?

Ideally, your accountant should be proactive and initiate this conversation with you on a regular basis. However, if they are not, make sure that you’re scheduling meetings to discuss financial statements and your accounting systems.

3. Taxes

There’s a good chance that you’re already having conversations about taxes with your accountant, but are you only discussing this topic when it’s time for filing? If so, it may be time for a change.

You should be discussing and engaging in tax planning throughout the year. Your accountant should help you review your tax liabilities and understand how you can minimize them while remaining compliant with tax laws. Your accountant can also review any recent legislation that may affect your business.

You will have fewer surprises in March or April when you engage in tax planning throughout the year and regularly review your liabilities. In fact, at our firm, we go as far as to say that you should never have a surprise tax bill in March or April!

4. Budgeting

Is your business spending too much? What does your current budgeting strategy look like? What is your process for forecasting revenue and managing expenses?

Remember that your accountant’s goal is to help your business succeed. Your budget will play a big role in reaching your goals for growth and revenue, and your accountant can help with this process. We recommend that you create multiple budgets, based on various scenarios. Some of these budgets include: a realistic budget of what you think will happen, a stretch budget if things go better than planned, and a conservative budget if things don’t go as well as expected. That way you’re prepared no matter what comes your way.

5. Cash Flow

Cash flow is the lifeblood of a business. In fact, research has found that 82% of businesses fail due to cash flow problems.

Having a clear picture of your business’s cash flow is important, and your accountant can help. Discuss:

  • The state of your cash flow.
  • Whether cash flow is being managed properly. For example, is the business collecting money on time? Have you built up cash reserves?
  • Whether you’re taking on too much debt to finance your operations.

If your cash flow isn’t where you want it to be or where it should be, your accountant can help you move in the right direction.

6. Financing

Does your business need financing? If so, talk to your accountant about it. Together, you can go over some important things, such as:

The important thing is that you secure financing before you need it. Your accountant can help prepare financial projections and set you up for success when applying for loans.

7. Big Changes

Big life changes also warrant a conversation with your accountant because they will likely affect your personal or business finances in some way.

Talk to your accountant about:

  • Major life changes, such as marriage, divorce or having children.
  • Big purchases, such as a new home or a new business purchase.
  • New investments, such as real estate.

Your accountant can help you understand the financial and tax implications of these changes.

Having this discussion ahead of time can also have advantages. For example, your accountant may suggest holding off on a big purchase until the next quarter or year to reduce your tax burden.

Final Thoughts

Business owners should view their accountants as close allies and talk to them regularly about the state of the company’s finances and their personal finances. Whether it’s tax planning, budgeting, reviewing financial statements, managing cash flow, seeking financing, or reaching your goals, your accountant can help you create a plan to achieve your objectives and ensure your business stays on the road to success.

To learn more about how to help your business succeed or to schedule an appointment, click here.

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