This time of year, many business owners think of their accountant as someone who can help with tax planning – figuring out which deductions they must lock in by year end or which moves can qualify them for needed tax credits. Certainly, accountants can help business owners in those areas, and many business owners are meeting with their accountants to do just that.
But limiting your use of an accountant to taxes alone is like taking a piece of bread at an all-you-can-eat buffet. You’re not getting all you can, especially if you have unmet business goals or questions about current business challenges. Business owners who only think of their accountants in terms of taxes miss out on utilizing them as a trusted advisor and someone who can help grow the business and make the owner more money.
“Accountants are the most underused resources that business owners have,” says Brian Hamilton, chairman of Sageworks, a financial information company. “Business owners are so busy making ends meet that they don’t have the time to sit down and analyze financial data.
Others are intimidated by accounting — and accountants. They don’t really know how to make the most of their financial statements and the information in them, but they may be slightly averse to asking questions and admitting that they need help.”
Now is an excellent time to tap the financial knowledge and business experience that your accountant has in order to not only get a good start on 2015, but also to address ways to finish 2014 on a stronger operational note. Many accountants are already meeting with clients for tax planning. For others like Sara L. “Sally” Massagee, a CPA in Hendersonville, N.C., now through the end of February is a slower season for business before tax season hits full force.
Massagee says businesses need to remember that incredible growth doesn’t just happen. “Part of how it happens is knowing your strengths and weaknesses, and capitalizing on the strengths that make a difference while tackling the weaknesses,” she says. “Now is a great time to identify those and understand them heading into the new year.”
Below are 10 ways (besides tax planning) that you can use upcoming meetings with accountants to end 2014 positively and to launch a prosperous 2015. All you have to do is let your accountant know ahead of time that you’d like to learn more about these topics; if they won’t help you, ask for a referral to someone who will.
- Review year-to-date results and how they compare with the year-ago period to develop an action plan for 2015.
- Identify or learn more about key performance indicators (KPIs) for your industry or key financial metrics, and set up a way to begin tracking those for your business.
- Benchmark your recent results against industry peers.
- Schedule now some quarterly meetings in 2015 to discuss financials in the context of improving profitability, sales, cash flow or all three.
- Learn how to ensure your business is worth as much as you think it is. Whether you’re planning to sell, pass along to heirs or simply generate enough in coming years to walk away, accountants can help you figure out what to do now to make it happen.
- Develop a SWOT (strengths, weaknesses, opportunities, threat) analysis of your business or an upcoming venture and use that to develop 2015 plans.
- Identify whether you have the resources to grow your business in 2015 without experiencing cash shortages.
- Discuss your banking relationships and whether there are any debt covenants or other issues that you’re worried about fulfilling, or whether you need help applying for a bank loan.
- Examine whether you are getting the return on investment you expected from recently purchased equipment, recently hired employees or recently added business lines.
- Analyze whether planned purchases, hires or business changes will provide good returns.
With just over five weeks left in the year, you still have some control over 2014, and you certainly can change the course of 2015 with a little planning and financial information.
“This is the stuff that matters,” Massagee says.