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Talk to your accountant

Having a conversation that adds value to your business

Our prompt for this article is the designation of May as, “talk to your accountant” according to one of the online sites that track things like this. It is the appropriate month to do so as there is little value in talking to the accountant when they are about to submit your taxes.

After all, what can be changed on the tax return? And you are with them during their busiest time of year. Speaking with them in May makes more sense. While there are extensions being filed for some of their clients, an advantage you have is that you are coming to the conversation with four months of the current year completed. You also have eight months to improve on the current year whether you need to focus on margins, turn rate, expenses or sales.

In addition to the content of the conversation, what is of great importance is your participation in the conversation by asking good questions and understanding what the accountant is saying. It was with a personal experience that this writer discovered the challenge.

The accountant we had used for years had passed away. A recommendation was given to an accountant based on his work with an investment firm and their clients. It was after the third year of having worked with this accountant that the person who gave the recommendation spoke of a recent conversation with the accountant.
“I guess you heard that Shay fired me”, said the accountant.

“Yes, I did”, was the response.

“He doesn’t get it as to how you work with an accountant. You are supposed to put papers in an envelope; deliver it to me; and let me do my work. He wanted to talk about the stuff”, said the accountant.

“I see why he fired you”, said the person who gave the referral.

At least there are others who understand the concept of working with an accountant.

The conversation with the accountant does not mean you want to do your own tax return and other forms. It means you want to understand. Of additional importance is the information you have that the accountant does not.

As an example, there is the issue of depreciation. This is the process of taking an asset, like a building, fixtures, equipment and decreasing the value over a period of years. The depreciation is a “non-cash” expense, meaning unlike payroll or an electric bill, you are not writing a check for it. However, it is an expense.

The amount of depreciation and how it is taken should require input from you. As an example, if you anticipate your business is going to make more profit in the coming years, you will want to take more depreciation in those years, and less depreciation in the current years.

All of this starts with your input to the accountant as to your expectations of your business in the coming years. If you have not had this conversation with the accountant, then the accountant is taking a guess on your behalf. Is that the way you want this to go?

Your having a conversation, and your active and knowledgeable participation in the conversation is very important for your business. May is a good time to talk to your accountant.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 128, Dardanelle, AR. 72834. Phone 727-823-7205. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.