Preface: Accounting approaches are not created equal. It’s like suit coat shopping; you have choices, ‘tailored-services’ or ‘off-the-rack’.
Questions are the Strategic Runway Towards A Great Business (Segment IV)
Credit: Donald J. Sauder, CPA | CVA
There is a day approaching when your business will need an accountant; ok, no new news there. Whether you’re an early year’s entrepreneur or working in a traditional family enterprise, trusted accountants have their place in service to every business.
The role of accountants has changed in recent decades from only keeping books or preparing tax filings, to more of an advisory position. When you have the budget, a large accounting firm can seem like a right choice, but there are always risks that you will get an ‘off-the-rack’ accounting service versus an accountant with a ‘tailored services’ approach who will genuinely listen to understand your business goals, aspirations, strategy, and needs as an entrepreneur. Only then can you obtain optimal solutions. Accounting approaches are not created equal. It’s like suit coat shopping; you have choices, ‘tailored-services’ or ‘off-the-rack’.
Tethering your business to a great working relationship where you can build trust is vitally important to get the most from your trusted advisors. To maximize value from your relationship with an (accountant) advisor, you need to be comfortable communicating on a effective and trustworthy basis and feeling confident with the professional judgments of the advice.
The best accountants look at what’s best, not only for the business, but also for you, the owner, and your team. The ‘right’ accountant is usually not a universal ‘one size fits all’. If business is simply a Dutch Blitz game, there is a substantial difference between a cheerleader and an expert coach.
When you are building a business, of any size, Luke 14:28 tells us why excellent accounting is of utmost importance. “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.’
Whether a journeyman in business or a businessman, now ask yourself the following business self-assessment questions for Accounting and Taxation. If you answer any question “NO”, then follow-up and ask yourself – “WHY NOT”? Document your answers, concisely. Answering “NO” isn’t necessarily wrong, but you should know “WHY NOT”?
Accounting | Taxation
1. Does your executive team continuously collect, track, and analyze key financial and operational data?
2. Does your business prepare an annual budget?
3. Does your business have three to five-year financial projections?
4. Does your business have a plan to effectively manage debt ?
5. Does your business meet annually with your banker?
6. Does your business have seasonal cash flow challenges?
7. Does your business have a line of credit with an outstanding balance?
8. Does your business monitor the equity to assets ratio?
9. Does your business regularly monitor and track working-capital levels?
10.Does your business track and manage overhead cost variances and expectations?
11. Does your business calibrate costs of production or customer service at least annually?
12. Does your business have a travel policy?
13. Does your executive team track key performance business indicators weekly?
14. Does your business plan strategic capital expenditures?
15. Does your business have target ranges for cash and working capital?
16. Does your business have satisfactory conversations with your accountant each year?
17. Does your business consider tax filings to be relatively stress-free?
18. Does your business have a sales tax compliance plan?
19. Does your business maintain appropriate compliance with multi-state income taxes?
20. Does your business have a high level of confidence in your tax filings and income tax compliance?
21. Does your business invest in annual tax planning?
22. Does your business obtain quarterly or annual enterprise financial statements?