Help! I Need an Accountant

Small business owners have many tasks to perform in running their businesses.  They take orders, prepare the shop, order inventory, hire employees and perform bookkeeping.  These varied tasks can become overwhelming especially when you think that you must prepare the accounting and balance the books.  Who has the time?

But you needn’t feel this way.  Consider hiring an accountant.  But what should you look for in an accountant?  The first thing you should do is to determine what you need in an accountant and what he can do for you.  What are the skills and knowledge that you require of an accountant?  Is he a CPA? Where is your business now, is it a start-up or a small company with a small staff?  Will you need financing soon, or are you thinking of an initial public offering of stock? The answers to these questions will help you determine what you need in an accountant.

There are so many accountants with specialty services these days it can be confusing to select someone. And then there are those who are your basic accountants.  Accountants typically provide a wide range of tax services, from filing tax returns to tax planning to examining the tax implications of transactions.  Some even offer assurance services, including audits, reviews and compilations.  Some accounting firms recently have expanded to provide business advisory services, including succession planning, business valuation and forensic services, technology consulting, human resources consulting and investment advice.

If all you need is someone to prepare your quarterly financial reports and year-end financials and income tax reports, you would need an accountant from a small firm.  However, you need to determine whether the accountant is appropriate for you.  You should discuss with him his qualifications and experience. You must ask him about his clients and how large they are. Where would you fit in the client roster in terms of size?   Will he pay attention to you or would you be a low priority to the professional?  An accountant with small business practice would be a better fit for you if you are a small business and expect to remain as you are for several years.  Is the accountant familiar with your industry?  If so, he would then be able to present your financials properly and be able to pinpoint troublesome areas in your business so that you can make improvements. He can help you improve your bottom line.

You need to discuss with the accountant how he will handle your account and how much he will be charging for his services.  How many face-to-face meetings will you need with him for him to understand your business and how he wants to receive your information in paper or loaded onto a disc which syncs with his software.

But the best way to select an accountant is to ask your friends and business contacts who they would recommend.  Make sure that you interview several accountants so that you will have the best fit to meet your business needs.

Business Planning Includes Succession Planning

Not long ago two brothers I knew had a landscaping business.  They told me that they had recently taken out life insurance on each other in case one of them dies so their families and business’s debts would be taken care of.  One brother was against it, while the other was in favor of it.  But he acquiesced.  It is a good thing that he did.

A few years later, one of the brothers had a fatal accident while working.  The other brother was left to run the business.  He was so happy that the insurance was in place that it helped him continue the business and take care of his brother’s family to the extent that his nieces and nephew could attend college without worrying about the expense.  It was due to the fact they had taken out the life insurance policy.  Now that business has been taken over by the surviving brother’s son-in-law and is doing great.  A second-generation business.

Think about this:  if you suffer a heart attack and need time to recover, you need the ability to have other people step in and manage the business and pay the bills.  Exceeding a month’s convalesce could mean that you could lose the business.  A successful neighborhood fish business was being sold.  The agent told me that the owner suffered a debilitating heart attack and could not return to the business.  He had no insurance.

Owners of businesses should plan a “what if” scenario indicating in writing who should take over his tasks.  Perhaps it is a trusted staffer, relative or friend who could sign checks and purchase orders, and have access to accounts and records.  They should purchase insurance that provides money to hire someone to run the business if they become incapacitated for an extended amount of time. If there is no one running the business, vendors and customers might get nervous and discontinue their patronage.  Bankers can decide to start calling in credit.

These stories should make sole proprietors and partners consider succession planning.  Some owners feel that their children will take over the business.  It rarely happens – children want to do their own thing. Other management options to consider are current employees, customers or competitors who would purchase your business.

Finding your replacement is difficult so plan ahead, it is best to start early. Leaders are not always easy to find and it takes time to mentor someone into a management role. You will need to identify potential successors in your family or among your employees. You can hire from outside the company, but it’s helpful to groom someone already in your business over time so the transition to new leadership will be smooth.

Planning for continuity or retirement wise.  Be sure to do it!