Working effectively with your accountant
Gregory Short, CPA, is a senior accountant of Shepherd & Goldstein LLP in Worcester. Reach him at (508) 875-2552 or gshort@sgllp.com.
In the past two decades of my professional career, I have been on both sides of the accounting relationship both as a controller and as an outside certified public account. Growing up in a family running a small business gave me insight into the mental demands on a business owner. These collective experiences taught me to be as effective as possible in exchanges between owners and their strongest financial ally – their accountant.
Business owners can often feel judged and shamed for not doing things correctly. This is a natural feeling to be avoided with a few simple steps to ensure the relationship with your advisors is functional and approached with positive intentions.
Keep lines of communication open at all times, not just at year-end.
During the course of the year, open communication is very important. While success is dependent on two-way communication, business owners should feel it is acceptable to reach out immediately for any questions or concerns that come up throughout the year. This can include any items where the business owner is uncertain or curious on the affect to their business. If you are unclear about how to record a transaction properly, how to address a potential employee issue or general tax law applicability, an effective CPA should be available to field those questions during all times of the year.
Work together in order to set reasonable deadlines.
CPA's are always looking to get information as soon as possible in order to manage an extremely large work load in a short period of time. There can often be a tendency to push a sense of urgency on the business owner or their controller. Being honest with your CPA about whether deadlines are reasonable within your business workload will minimize problems. If a deadline cannot be met by either party, communicate that immediately and suggest a reasonable solution to compromise on an alternative.
Respond to questions in a reasonable amount of time.
Oftentimes, in working on your financial reports or year-end workpapers, questions will arise for the accountant and the only way to get the answer is by contacting the business owner. Due to tax and reporting deadlines, every effort should be made to answer questions as quickly and completely as possible. Neither person should be expected to drop everything to respond, but make the effort to reply as soon as possible or to let the other know when an answer can be expected.
Do as much analysis as possible prior to year-end.
A little time spent analyzing accounts leading up to year-end can go a long way toward saving time and avoiding questions. A well-maintained set of books will often provide all that is necessary for the accountant; however, some transactions require additional analysis. Various steps can be taken to save time and money in advance:
- Providing invoices or bill of sales for changes in fixed assets,
- Reviewing accounts receivable for old balances that are potentially uncollectible,
- Adjusting note payable balances at the end of the period, and
- Review any changes in equity.
Remember that you are all on the same team.
As a business owner and CPA, you are both ultimately working toward the same goals of keeping the company in compliance, helping to make the business a success and helping the business owner achieve their personal and professional goals.
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