How Can Your Accountant Boost Your Profits?

Nina KaufmanArticles, Grab Bag2 Comments

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!

2 Comments on “How Can Your Accountant Boost Your Profits?”

  1. Great orientation for small biz owners who do not yet appreciate the importance of good accounting and bookkeeping. Was there supposed to be a link embedded in the article to a specific accounting firm, Nina?

    1. Thanks for your comment, Scott. I chose not to include a link in the post when I originally wrote it (for reasons below) … but you’ve inspired me to update it.

      When business owners ask me for referrals, I like to give them more than one name. Why? First, expertise matters. One accountant may be great with restaurants; another may work well with dentists. There are s-o-o-o many tax laws and rules and regs out there, that it really helps to work with someone who knows your industry. I run a professional services business, but your business may be in a different industry … so my accounting firm may not be the right fit for YOU. Second, there’s chemistry. I may like it rough–just the facts, ma’am–when dealing with my advisors … “I’ll sign what you send me”. You may want (and need) more comprehensive service, deeper explanations, etc., or more proactive service during the year … which not all firms provide. Third, and sadly, there’s my CYA Department. If I give multiple suggestions, it’s for you to investigate and determine which is right for you. If I give one recommendation and you take it and it doesn’t work out, that mean I’m on the wrong end of a lawsuit (oh, those pesky attorney ethics rules!).

      But, hmmm, isn’t that what disclaimers are for? 🙂

      Finally, referrals are a two-way street. As much as the accounting firm should be a good fit for you, you need to be a good fit for the firm. From a blogpost alone, I can’t be a good mediator to make sure that both sides will find it a useful introduction.

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