What are the signs of a great accountant? It's not always easy to know you have the best person for your business. Some the ways business owners measure their accountants performance has been skewered over the past 20 years with the advent of personal computers and cheap "accounting" software such as Intuit's QuickBooks. Before that, the lines were clear as to what the accountants role was. Today, many accountants have allowed themselves to become glorified software trouble shooters and tax preparation mills. The focus was taken off the client's books and records and financial position and refocused on helping them do bookkeeping themselves to help reduce their own accounting fees. It's this mentality that has led me to believe that accountants are some of the worst business people I have ever come across.
So how do you know you have a great one?
- They communicate regularly with you : Not just by email. They meet with you face to face to discuss what's going on with you and your business.
- They have your books up to date : With today's technology there is no reason why you should have to wait months for a balance sheet and income statement
- They do tax planning during the year : You can't be told what you should have done during the year to reduce your taxes. Tax planning is an ongoing process and it's not always about not paying taxes. A great accountant will explain this to you.
- They show you the value of budgeting : Business plans don't mean squat if you can't map out your future income, expenses and cash flow. This should be business 101 but most accountants never even mention budgeting or how to do it to their clients.
- They constantly educate you : Learning never ceases. Business is fluid and your accountant should be keeping you informed about 3 things:
- What's happened (income statement)
- What's happening (balance sheet)
- What you can expect to happen (budget).
They should have helped you develop your accounting system and explain what books and records are. They should discuss exit strategies and understand what your long-term and short-term objectives are.
In conclusion, your business is probably your most valuable asset and your accountant is in an important position. That individual not only has to be someone you know, like and trust but also be the one to bring you back down to earth by telling you the things you don't want to hear.