Getting the most from your accountant—especially at year-end—requires a bit of preparation on your part. But rather than being onerous, you can make some of that work like brushing your teeth: it’s just good business hygiene, and it can be practiced more regularly than once a year. I spoke with Jen Nord, with Montana Community Development Corporation and an experienced accountant working with many human-scale businesses, about her tips to help your accountant help you.
There is no accountant out there who loves it when you come in with a box of receipts or say ‘Here is what I THINK I have for the year.’ You need to be organized.
Communicating with Yourself
Jen’s first tips focus on being straight with yourself in three ways:
- Review your bank and credit card statements. This is best done on a monthly basis. You’re looking for any charges you don’t understand, as well as making sure that the inflows and outflows match with your actual experiences. Reviewing these accounts monthly makes year-end collection and review of these statements easier, too.
- Check your business’s financial statements—the income statement, cash-flow statement, and balance sheet. This can be done monthly or quarterly, depending on the velocity of your business, but certainly must be done annually. Do the financial reflect what you see on your bank and credit card accounts? Jen advises “taking a step back”—does this record of your business make sense, given where and how you spent your time and energy?
- Compare the current year’s results with last year’s. Here you are checking which elements have changed. Has your cost of goods increased? Are revenues steady or declining? If you hired someone during the current year, are you recognizing the benefits in revenues, margins, or profits you anticipated? Forming clear explanations—and specific questions—about why these changes have occurred will help you have productive conversations with your accountant.
Communicating with Your Accountant
The next tips focus on interacting with your accountant.
- Organize your documents. Find out whether your accountant prefers electronic records or paper copies and store the records as you accumulate them in the preferred format. While setting up an electronic or in-office filing system may seem like something you never have time for, buy yourself a latte and sit down and create the categories. Then as you encounter records on your desk or as they come into the business, put them in the appropriate place.
- Think about the upcoming year. Your accountant can become your ally in planning what’s next, as well as helping you document what’s past. If you want to buy some new equipment or spend your time differently in the coming year, talk with your accountant about the possibilities. Accountants can help you think about both feasibility and most useful approaches for accomplishing what you aspire.
- Get on your accountant’s calendar EARLY. Jen said setting appointments before the crunch of tax deadlines can help you get the most from your accountant’s expertise and generative thinking.
While the need to file taxes may be as certain as death, it doesn’t need to be feared. Following this advice will help you spend less money while getting more value from the accounting services you retain. Over time, you can build confidence in your abilities to document and interpret the numbers as you engage your accountant as an ally for your human-scale business.