Now that the tax season has passed, most business owners have a tendency to forget about their accountants. This can be a costly mistake.
Your accountant – preferably a Certified Public Accountant (CPA) or Enrolled Agent (EA) – is a vital member of your management team if you’re operating a business and don’t have an accountant on staff. A trustworthy accountant can prevent what you may read about in the news every so often, embezzlement from the company by a key employee who “intended” to pay the money back or had a gambling problem or …
Your accountant is more than that, though. They are there to prepare and review your financial statements, including balance sheets, profit-and-loss statements, and cash flow, among others. We advocate you meet with your accountant at least quarterly, but preferably on a monthly basis to stay abreast of your company’s financial status and cash flow. They can identify issues of concern and advise you what to watch for when you review your own statements. They should also offer suggestions about ways to control expenditures – the decision is ultimately yours – and may even provide insight on how to increase revenues.
They can reconcile your bank statements, handle your payroll, and prepare your quarterly payroll statements and keep you from incurring penalties on your tax obligations. Obviously, there will be fees associated with the services you choose to have your accountant perform for your company, but keep in mind that the cost should be more than offset by the money they save you and help you make in exchange for their professional guidance.
An example: A tavern owner was working with an accountant (not a CPA) who was letting the owner pay both the company’s share of FICA and other taxes as well as the employee’s share. In essence, the owner was giving his employees a bonus and incurring additional taxes for them because the accountant overlooked the problem. A CPA would have been obligated to advise the tavern owner against that practice and saved a lot of headaches, penalties, and money as a result.
Think of your accountant as a valued advisor. They are likely to know bankers who may invest in your business, or investment representatives who can build your retirement fund, and other professionals who can contribute to your team and grow your business.