For many small business owners, the relationship they have with their accountant is very transactional. In other words, they meet with their accountant at year-end to file their taxes; and maybe on a quarterly basis to file their employee withholding or pay their quarterly estimated income taxes. At least that’s how I approached my accountant as a small business owner and I think I left profits on the table as a result.

Meet-with-your-accountant | OnDeck Small Business Loans

One of my best friends is a CPA. Although he wasn’t my accountant, he often tried to give me advice (great advice had I paid more attention to him), but I interpreted what he was saying as accounting mumbo jumbo and while I didn’t ignore him, I didn’t pay as much attention to him as I should have. Hindsight being what it is, had I been more engaged in what he had to say, he could have helped me build a more profitable business.

Over the years since then, I’ve come to appreciate the value of the accounting perspective; and were I to start another business, I would expect a more consultative relationship with my accountant.

Does it Make Sense to Consult with Your Accountant?

My focus, as a business owner, was to produce the best product I could and get as many customers to buy it as possible (with a big enough margin to make a profit). Probably not very different than where many business owners focus their time. Had I given my accountant more heed I would have seen more opportunities to reduce costs, invest my profits more efficiently, and ultimate make more of them—make more profits, that is.

My friend argues that every business needs what he calls “A Profit Expert.” I think he’s right. And, although that expert doesn’t necessarily need to be an accountant, your accountant could play that role—or at least help you master that role.

Because an accountant likely has more access to what’s happening inside your business than anyone else (next to you), they’re in a position to see things or notice trends that you might not.

Their training gives them a different perspective when they look inside your business. This is a valuable perspective that has the potential to make additional profits for your business, if you allow it. Because they offer a dispassionate pair of eyes and can look at your business without the distractions of day-to-day business operations, they may recognize trends in production costs, inventory costs, or other areas of your business that you might not notice in the heat of battle.

How to Initiate a Consultative Relationship with Your Accountant?

The good news is that this will likely be easier than you might think because there are many accountants who would welcome the opportunity to do more than file your taxes. With that in mind, here are four things you can start now to initiate a broader relationship with your accountant:

  1. Start Asking Questions: It might be as simple as asking, “As you go through my books, do you see any place where I might economize to save additional profits?” You may be surprised if he or she immediately has two or three suggestions they offer on the spot. They will also likely volunteer to dive a little deeper and give you a more thorough analysis. Be prepared to pay for any analysis they do (they bill for their time), but they’ll likely be able to tell you before they get started what you can expect they’ll charge. If they don’t have anything to offer or don’t suggest a deeper dive to get you some actionable advice, they likely aren’t the type of accountant you’ll want to build a consultative relationship with. You’re looking for someone who can help you build your business and someone with the skills to help you do it.
  2. Ask to Schedule a Consultation: If you see value in what they suggest or otherwise like what they tell you, it might be worth scheduling a consultation once tax time is over (it’s likely they won’t have much time for this over the next few months). That will give them time to come up with some more concrete advice based upon what they’re seeing in your accounting records.
  3. Determine a Regular Cadence for these Meetings: If you feel like their deep dive provided some good actionable insights that will help you formulate a game plan, this could be something you will want to do on a regular basis. Working with your accountant, determine if a semi-annual, quarterly, or a more frequent meeting schedule is appropriate. Establish an agreed upon budget for the cost of the additional consultation and get started.
  4. Create an Action Plan: Working with your accountant, create an action plan for what you want to tackle, agree on benchmarks and key performance indicators, and start monitoring and measuring to see if the recommendations make a difference. You may be surprised at some of the advice your accountant offers, but you might be even more surprised to see the results of following the advice.

When I think back on the many conversations I had with my accountant, I now recognize there were times when he tried to engage with me at a more consultative level, but I wasn’t interested or wasn’t paying attention and therefore didn’t recognize those opportunities.

Take the first step. Ask if they see anything in your books that could be a red flag, which would demand immediate attention. Taking the relationship with your accountant to the next level could be an invaluable part of building a successful small business.

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