Preface: Choosing an accountant for your business is an important decision. This blog provides some characteristics for entrepreneurs to look for in potential accountants
The Importance of Choosing a Trusted Advisor for Your Accountant
Credit: Jake Dietz, CPA
Should I eat apple pie or pecan pie for lunch? Pie selection decisions do not have long-term consequences. Other decisions, such as choosing an accountant, have far-reaching consequences. We will examine three characteristics to look for in an accountant in this blog. Choose an accountant who initiates consulting, who guides you through the tax and accounting maze, and who helps you achieve your business goals.
Seek an accountant who initiates consulting for your business. Sometimes you will be the one to ask for help, but choose an accountant who offers advice when it is helpful. For example, suppose you have a veterinarian come to the farm because your horse hurt its leg. If the vet also notices degenerative joint disease affecting the horse, then you may want to be told about it. You may not want a vet who says “I didn’t diagnose your horse’s degenerative joint disease because you didn’t ask me about it.” Likewise, you don’t want an accountant who says “I didn’t tell you your company was failing because you didn’t ask me about it.” Choose an accountant who shares with you what the strengths, weaknesses, opportunities and threats are that face your business. When was the last time your accountant called and asked about your business?
Find an accountant who can guide your business through the maze of tax filings and accounting decisions. The Internal Revenue Code bewilders many people and traps the unsuspecting. If you try to navigate the maze with inadequate advice, you may end up missing huge deductions or being on the losing end of an audit because of unreasonable tax positions. Choose an accountant who can help guide you through the risky pitfalls and help you take advantage of the beneficial areas of the tax code. If you are meeting with a potential accountant, consider asking them for an article they wrote about taxes, or ask them if there are any parts of the tax code that would help you. Most accountants don’t memorize the entire code and may need to research certain items before providing answers, but a busy entrepreneur should use an accountant who is familiar with the code and knows how to research the items that are not memorized.
Choose an accountant who will help you achieve your business goals. Entrepreneurs have different goals, and it can take hard work and discipline to achieve those goals. Do you want to grow your sales by 100% in five years? Do you want to pay your employees a livable wage? If you want to increase the wages you pay, your accountant may suggest increasing prices and sales. If debt is high, your accountant might point out opportunities to improve cash flow. A good accountant can help project what needs to be done and provide insight to achieve your goals. Choose an accountant who asks about your goals and values and then plans how to achieve them.
When considering pie choices, make a quick decision so you can soon enjoy the pie. When considering accountants, choose them like you would choose your vet. If your horse gets sick, you want a vet who has invested the time to gain the expertise to help the horse get up and running again. Likewise, an entrepreneur benefits from choosing an accountant who has the knowledge and experience to help your business. The benefits of choosing a trusted advisor to be your accountant can accumulate over the years. The consequences of a bad decision can be quite painful. Choose wisely.