As a former small business owner myself, I shamefacedly admit that I didn’t take advantage of my accountant’s expertise and point of view and how it could have helped me ramp up my business much faster than I did on my own. In fact, I’m convinced your accountant can help you build your business—you just need to move from a transactional relationship to a consultative relationship.
One of my best friends is a CPA. Although he wasn’t my accountant, we often talked about my young business and he tried to give me advice that would have helped my business grow (if I had listened to him). At the time I thought a lot of what he was telling me was a bunch of accounting mumbo jumbo. I knew more about the industry I was in than he did and didn’t appreciate the insight both he (and my accountant) freely offered me.
In the 20 or so years since then, I’ve come to appreciate that I handicapped my business by learning these lessons the hard way. Had I done a better job of listening to them, it would have been like a shortcut to profitability.
What Do I Mean By a Transactional Relationship?
Too many small businesses treat their accountant the way I did. They meet with the accountant to do their yearly taxes, they might meet with them to file their quarterly estimated taxes and payroll taxes, but that’s it. They treat their accountant like a part of the myriad other transactions that a small business deals with over the course of the year.
It was a mistake for me and if you treat your accountant this way, it’s a mistake for you too because your accountant can help you build your business.
Aside from you, your accountant probably knows the most about your business than anyone else. In fact, he or she might even know more about whether or not your business is profitable than you do.
Who is Your Profit Expert? Is It You?
My CPA friend regularly talked about what he called “The Profit Expert.” He thought every business needed one, and it should be the business owner, but most of the time he or she didn’t take the time to become the Profit Expert, meaning most businesses don’t have one.
In partnership with your accountant, you can become the Profit Expert in your business.
In another life I took a small business bookkeeping course, which gave me some incredible perspective on the financial workings of a small business. If nothing else, it gave me an appreciation for the world accountants and bookkeepers live in. It also confirmed that it was a good decision for me not to become an accountant.
Their training gives them a different point of view when they look at what’s going on inside a business. In other words, they see things you might not see. They can recognize potential problems before they become a drain on cash flow or opportunities that could help you business capture profit opportunities you didn’t even know existed. They are a pair of dispassionate eyes that can look at your business without the distractions associated with day-to-day business operations. They can recognize trends in production costs, inventory expense, or other areas of your business that you might not notice in the heat of battle.
How to Move From Transactional to Consultative
It’s likely your accountant will embrace the opportunity to work with you in a more consultative way. If they don’t, you might consider finding a new accountant or someone else with that training that is willing to work with you.
If your accountant agrees, he or she might have a handful of suggestions they’ll share with you right now. Of course, they will likely charge you for the consultation—which I would suggest is a good use of your hard-earned money. It will help you reap more profits, it will help you save money (which is basically the same thing), and may even help you better leverage borrowed capital to fuel growth opportunities rather than simply overcome a cash flow crisis.
Here are four things you can start doing now to create a more consultative relationship so your accountant can help you build your business:
- Ask questions: It really is as easy as that. Ask them, while they are in the books, if they see anyplace you can either save money or leverage into additional profits. If they volunteer to dive in a little deeper to see what they can find, set them loose. As mentioned earlier, none of this will likely be free so be prepared to be billed for this. In fact, you may even ask them up front what they will charge you.
- Set up a consultation: If you see value in what they tell you after they’ve looked at the numbers, set time aside to get their evaluation of what they find and their recommendation for next steps.
- Establish a regular cadence for meeting: Once a year likely won’t be enough. You and your accountant can determine if a semi-annual or quarterly meeting is enough. Don’t forget to establish a budget for the extra meeting time and make it happen.
- Forge a plan of action: Once you have the advice, create an action plan for what you will do, how you will measure results, and what needs to be accomplished before you next meet. It’s human nature to positively impact the things you pay the most attention to, and your business’ profitability is one of the most important things you can focus on.
I regret that I ignored so much great advice I could have gleaned from my accountant and my CPA friend. There were many times they tried to engage with me on a more consultative level and I just wasn’t, for whatever reason, willing to take their advice.
Talk to your accountant to see if they are interested in taking your relationship to the next level.
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One response to “Your Accountant Can Help You Build Your Business”
Can’t agree more with this Ty!