Q. As I’m doing the year-end work for my business, I’m wondering if I’ve got the right outside accountant. How does a business make this evaluation?
A. For many businesses, this relationship is one that is long overdue for review. Your accountant should be more than a tax preparer. He or she should be part of your advisory team. However, a good relationship needs a proactive approach from both sides. Let your accountant know your expectations and then expect delivery.
The role of the outside accountant will vary with each business, depending on its size, management, ownership structure and growth plans. At a minimum, this should include advice on tax compliance and planning, internal financial controls and safeguards, business financing, general business management and personal financial planning. A key evaluation question is what is being offered to you in these areas. Other key questions include: Do you meet periodically during the year? Does he or she take an active interest in your business? Has he or she offered practical advice on how to improve and grow the business?
While loyalty should be recognized, don’t fall into the trap of sticking with the same person or firm based just on longevity or low cost. The cost of that mindset can be significant in terms of lost tax savings and missed business guidance. Be willing to both expect and pay for good advice. It’s well worth the investment.
If you have a good “advisor”, congratulations. If not, either meet with your accountant to step it up or get out and start interviewing. There’s a good accountant out there waiting to join your advisory team.
Don Clayback is vice president of Networks for The MED Group. Reach him at (716)-835-1728.