What Services Should Your Accountant Be Providing?

Many business owners seem resigned to the fact that their accountant is a good guy but a little behind the times. Maybe he’s not very aggressive, does not provide any tax planning, gives little instruction on financial issues, provides no business advice… but he is a nice guy. He is really is nothing more than a comfortable old habit who does your tax return annually. The first time you learn anything about your financial condition is when you pick up the tax return and look at it, not really understanding what he did which was precious little anyway. Typically, you look at the gross revenue line and the tax owed and mutter a few thoughts and that’s it. When I ask a potential client what annual revenues will be and am told “I dunno, I find out when I pick up my tax returns from my accountant,” I know he has problems.

Of course, this is not every one’s experience, but it is probably what the majority of small business owners experience. What services should be available to you from your accountant?

1. An accountant should understand your business and help you determine what the best form of organization is for you and your business, whether it should be an LLC, an S Corp or a simple proprietorship. Many factors influence this planning and it is a basic evaluation that should be considered.

2. They should take all available deductions including home office, travel, entertainment, etc. When your accountant says he did not want to take that deduction for you because it’s an audit flag, fire him immediately. If Congress provides you with an opportunity to take a deduction, not taking it is silly. Not taking it because it may be reviewed is even sillier.

3. They can add family members to your LLC to spread out income and should make certain IRAs and 401Ks are implemented and money is being saved efficiently and cost effectively.

4. A good accountant will advise you if you’re losing money, tell you where it’s being lost and how to stem the losses.

5. An accountant should never allow his client to not pay or file taxes. While this may not be a factor he can control, he should make every effort to advise the client appropriately and urge compliance.

6. An accountant should ask for, or prepare for the client, financial reports monthly or quarterly and review them with the client, explaining what they mean and what is happening with the business.

7. He should make certain the corporate checkbook is not being used as a personal checkbook, and that spouses or secretaries are not deemed responsible parties for tax purposes.

8. Your accountant should lead you through the resolution process with the IRS should you fall into default, taking you to the meetings and protecting your interests, and filing the appropriate forms required to resolve and reduce tax debt.

9. The accountant should make certain that personal assets are protected from the high risk of being in business.

10. Your accountant should help you prepare and present loan applications to banks for lines of credit and borrowing. He should help you create the business plans and cash flow pro formas required for management as well as for the banks.

11. The accountant should make certain adequate cash controls are being implemented.

12. If your business is failing and you’re unable to respond successfully and meet the challenge head-on, your accountant should lead the way to liquidation and shutting the business down, properly and effectively, protecting you from additional losses.

13. An accountant should advise you on partnership relationships.

14. Most importantly, a good accountant would want to review your books a few times a year and make certain loans by principles are being paid back without tax deductions and not ignored, and to head off issues before they become problems.

If you see your accountant once a year to pick up your taxes, he is not worthy of being your accountant. He is not doing the job he should be doing. Get a new one. There are many excellent accountants willing to do the job the right way. Too expensive you say? I disagree. How much is success worth versus failure? Pay little, get no support and then go out of business. Now, that’s expensive. Hire an accountant who will guide you to success. That’s a bargain at any cost. If any of this sounds familiar, it’s time to get a new accountant. It’s worth it.