Your accountant is an underutilized resource. A good accountant is so much more than a bookkeeper or barrier between you and the big house. They can add significant value to a small business leader’s strategic toolkit. Here are some tips for making the most of your accountant’s expertise.
1. Ask the right questions. A common complaint we often hear about accountants is that they don’t make recommendations; they only present options. That’s not entirely true, but if it sometimes seems that way it may be because you’re not asking the right questions.
Get specific about what you need and you’ll get better answers. “How can I improve cash-flow and liquidity?” is going to get a better answer than “what should I do differently?” The nature of accounting is such that the answer to a broad question is always “It depends.” So make it easier for your accountant to give you focused advice by being transparent with your goals and priorities and being precise and specific with your questions.
2. Plan long-term. Most small businesses (and too many big ones) fail to plan and forecast their finances long-term. That’s bad news for a lot of reasons, but the relevant one here is that it doesn’t give your accountant an opportunity to weigh in on your long-term trajectory.
Planning long-term means you can start having discussions with your accountant about working capital management, maximum sustainable growth rates, cost of capital minimization, exit strategies and many more issues that can make or break your ability to meet your firm’s (and your own) long-term objectives. So bite the bullet and start doing some farsighted planning. It will open the door to discussions with your accountant with potentially huge payoffs.
3. Get them involved in your work. You should get in the habit of checking in with your accountant any time you’re considering a move with a material financial impact. Use your accountant like an advisor rather than just someone who looks after financial stuff so you don’t have to.
Don’t worry about racking up a few more billable hours with your accountant. If they can steer you towards success or away from disaster, the fee you pay them will recoup itself many times over.
To be able to give good advice, your account has to get involved. Keep him or her up to speed on what you’re doing and why, and ask for recommendations and opinions, remembering to be specific about what you’re trying to achieve. The right push in the right direction at the right moment can be worth a fortune to you, but your accountant won’t offer it unless you ask.
4. Get involved in their work. Most people think of an accountant as a necessary evil; someone who will look after the mounds of incomprehensible paperwork for you and keep you out of trouble. You don’t really know what they do, and that’s just fine with you.
Trouble is, if you take that approach you’re missing opportunities to steer your accountant towards the goals and priorities that are most important to you. To make that happen, you need to take a look at what your accountant is doing, ask questions, challenge assumptions and explore options.
Yes, this sounds awful. Discussions like these are the last thing you want to add to your to-do list, but it’s critical that you do it because the potential return on investment is so very, very high.
Too many business leaders treat their accountants like finance fairies. We don’t know what goes on over there — it looks like magic — but we’re glad to know things are taken care of, even if they’re a complete mystery to us.
But that ignores the fact that accountants are experts with highly specialized knowledge and experience. That you have access to that knowledge and experience is not unique, but if you make a point of mining and leveraging that expertise at every opportunity, you may well find new ways to achieve your goals and outperform the competition. Very few of your competitors are using these resources properly, so make a commitment to exploit that. Plan long-term, ask lots of questions, and get your accountant involved in your work (and vice versa). It will certainly pay off.
Jay Lebo is one of the founders of Gravitas Business Architects, and has been helping companies multiply growth and outperform the competition for more than a decade.