Recently I hosted a group of women entrepreneurs. These ladies had two things in common, they were all passionate about their business and they were smart! However, as the group was discussing their challenges and opportunities, one of the women told a story about how their accountant had failed to do their tax filings as expected and now the wolves were at the door. The business was on the brink of bankruptcy.
Having the right accountant is key to a business success. I remember in my early days before I was getting monthly reporting when my accountant pointed out that my margin was slipping. This information hit home and over the next few years I worked consistently on growing my gross margins which resulted in record profits for the business. A good accountant will give you insights into your business, take the time to explain some of the financial aspects of your business that you might not understand, and ask you probing questions that enable you to move the business forward.
A good accountant will ensure that your filings are done on time and if you are missing any payments will help you get back on track. Your accountant should be providing you with timely reporting, not last minute reporting. You should be told by your accountant how to prepare for the upcoming tax year and what strategies you need to implement to reduce your tax liability.
Woe to those who have a bad accountant!
As a business coach working with hundreds of businesses over the past 8 years, I have heard horror stories about accountants and bookkeepers. A bad accountant can be a disaster for the business. A bad accountant will not get your file done within 6 months of your year end. A bad accountant will be slow in getting back to you with answers. A bad accountant will “forget” to file your tax returns. I have even seen balance sheets that don’t balance. Income statements with errors. Bookkeeping that is mixed up.
We have heard stories from our clients of bookkeepers who have come in the middle of the
night and reversed payments and taken the money. Bookkeepers who have had access to the company credit card and charged up the cards for their own benefit all the while hiding the fraud from the owners. Bookkeepers who have failed to deposit cash or written checks to
themselves.
Your accountant or bookkeeper might wreck your business but it may be your fault. As an owner you need to be aware of your risks of not filing returns. Your risk of giving your accountant access to your bank accounts. You should be reviewing your statements from your bookkeeper monthly and looking for discrepancies. You should be monitoring your bank statements and credit card statements for fraudulent charges.
While most accountants are great and having a good accountant on your team is a real blessing to your business. Be aware that not all accountants are created equal or have your best interest in mind.
Dave Fuller MBA is an Award Winning Business Coach and the Author of the books. Profit Yourself Healthy and Pivotal Performance. Had an accounting scare? I would love to hear. Email dave@pivotleader.com.
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