3 Things Successful Business Owners Get Right. Discover how to get out of the weeds so your business can grow!
Now that tax season is done done done, (yes, I filed on extension), I wanted to give a shout-out to the people who made that process relatively painless: my accountants. They have certainly saved my bacon on more than one occasion. By keeping a watchful eye and working with me proactively, we were able to nip an issue in the bud before it even became a problem (and would then require many hours of fixing).
And don’t let their low profiles fool you – accountants make profitability possible. It’s easy to forget the important role they serve in your profitability as they quietly go about their work.
Accountants perform several vital services above and beyond filing taxes. Filing taxes is a backward-looking exercise. In essence, you’re asking yourself “How did I do last year?” And unless you figured out how to turn back time (like Superman in this video clip), there’s no way you can fix any damage.
Looking forward, good accountants can arrange your financial statements to help you understand what the numbers mean. If you’re not making a profit or your numbers are off, that’s a clear sign that something’s not quite right. The interpretation of the numbers is what’s important.
For example, what story do your profits tell you? Are you on an upward trend? Downward?
If, for example, your numbers show reduced profits yet everything else is the same with respect to the broader economy, here are some things you may need to tweak:
- Your services or products– is a new competitor offering superior services or products?
- Your price point
- Your messaging— are you getting the word out adequately?
- Your receivables–what’s your process for collecting payments when providing your service or product?
You can’t change what you don’t measure. By working proactively with your accountant, you can track your numbers and implement the changes that will make your company profitable.
Tip: Be proactive, not reactive, with your accountants. Arrange to work with them throughout the year so that you avoid nasty surprises (and lost opportunities) at year end.
UPDATE: (And yes, this is a disclaimer. :-))
I added a link to the accounting firm I have worked with for many years, WeiserMazars LLP. The firm may or may not be the right fit for you and your business for any of following reasons (if not others): (1) they haven’t worked with businesses in your industry; (2) their fees are not within your budget; (3) they don’t have expertise with your particular issues; (4) you don’t feel comfortable with the people you spoke to there; (5) they don’t provide the kind of services you’re looking for. Make sure you do the legwork so that you engage an accountant (or firm) that’s really the right fit for you and your business. The “20 Questions” for screening attorneys in our Inside Counsel program work well for accountants, too!