Last week we talked about how to find a business accountant and what you should expect in terms of their performance. Today we’ll talk about how you can help your accountant provide you with the timely and accurate financial information you need to run a successful small business.
Dealing with your accountant is no different than any other business relationship with your banker, attorney, insurance broker, employees, customers, or vendors. It takes communication and follow-through. The very first meeting with your accountant is important. This is when you sit down and decided if you can work together. We believe in forming strong, loyal business relationships with professional partners, but this requires developing some chemistry. Don’t settle until you find someone that you are comfortable with.
Have you ever heard the computer expression “garbage in, garbage out”? Well, it also applies to your business accounting. If you provide inaccurate and inconsistent information to your accountant, guess what? Your returns and financial statements will be inaccurate and inconsistent. Talk with your accountant about establishing a system for keeping track of revenues, expenses, payroll, accounts payable, accounts receivable, inventory, and record retention.Businesses have successfully keep their books with a simple ledger system, but it is recommended that you use accounting software like Quickbooks or Peachtree. These software applications are very user-friendly. Many accounting firms have Quickbook specialists that can assist you to get started and are there to answer questions as they arise.
By all means, don’t be a “shoe box” customer. This is an individual that drops into the accountant’s office at the last minute each year with a giant box of receipts, cancelled checks, bank statements, and tax forms for the accountant to sort out. Trust me on this, if you are a “shoe box” customer your accountant will charge you plenty and may even make fun of you after you leave the office. You have it coming. On many occasions accountants have dealt with business owners that are less than forthcoming when it comes to declaring income or expenses on their IRS return. This is just fine until your number comes up for an audit.
Why would you want to spend your small business career looking over your shoulder for the IRS agent? You are in business to make a profit. When you do, pay your fair share of income taxes. This is how it should work in America. And once again, an IRS audit is on the small business owner, not the accountant. A good accountant will assist in the audit process for a fee, but the ultimate responsibility is yours. The numbers came from you.
So, get organized. Communicate with your accountant. Put a system in place and be consistent. Have your books done on a quarterly basis. Use your accountant as an impartial financial advisor, and above all, know your numbers.