How should entrepreneurs and business owners use their accountants - by Karla Hopkins

 

Generally entrepreneurs are constantly driving to perfect a business model and adapt to changes in their industry, economy and market demands.  Data is readily available and everywhere on any subject however, financial data that accountants can read and interpret is often overlooked. 

You may only think of your accountant at tax time, but just maybe they have more value all during the year.  Accountants generally amass a huge amount of financial data and can almost instantly identify strengths and weaknesses of a business.  They see a variety of scenarios from a wide range of clients and can use that information to help with your specific needs.

 

Are your margins where they should be for the industry?  Are your pricing policies in line with your competition?  Are your employees productive?  A good accountant can offer good insights into these types of questions.  Business owners often manage based on their "gut instinct" which is invaluable but having a professional support them with hard and fast facts can also be priceless.

 

So, how best to use your accountant you ask?  When you receive financial information from them, request a written or verbal explanation.  Don't assume you will understand the information yourself, ask the accountant to dig into the details with you.  When you talk to your accountant, focus on how the numbers you are going over affect your bottom line.  Relate everything to the two things that are critical to every company, its profit and cash flow.

 

Know your company's mission and strategic plan.  Managing a company looks like a complete circle.  Numbers tell a story.  They either move you towards your plan or away from it.  In a circle every function of a company impacts another function of a company in some way.  It's a ripple affect.  Your accountant can help you manage your company but only if you see their role and function intertwined with your company's goals, a part of the circle. 

 

Areas like strategy, competition, and data analysis are critical to a business.  Accounting firms often have a background to provide these expertise to their clients, don't be afraid to ask!