Tuesday, July 23, 2013

FINDING THE RIGHT ACCOUNTANT

Last week we talked about working with your banker and some of the do's and don'ts of that relationship. I hope you found it helpful. You may recall I encouraged you to provide professionally prepared financial statements on a regular basis from a qualified accounting firm.

This week I want to address some of the points I consider important when determining how to find the right accounting firm to assist you until such time you decide to hire you own in house financial manager.

If you are like me, you probably started out doing "shoe box" accounting. Some of you may still be doing it. That is where you put all your receipts, invoices, and checks into a "shoe box" and take it to someone to "straighten it out" at the end of the month or end of the quarter. For those of you that really hate the numbers part of the business, you probably wait until April  14 and then take it to the "tax man" or "tax lady".

Let me suggest to you that doing what I have just described is a big DON'T when you are starting a business or at any time in your business life. The next door neighbor who does some yearend tax work to earn extra money is not the person to be interviewing to be your accountant.

It is important to always be looking into the future of your business and associate yourself with professionals who can help get you there and an acccounting firm is no different. It is extremely important that you employ a firm or person who, when doing your books on a regular basis understands something about our service business. You are worrying about getting new customers and you need someone reliable that can provide accurate understandable numbers about how you are doing.

So many of the people that are doing accounting work today use "off the shelf" software that many times is not designed for our type of business. They use terms like "cost of goods sold" and  "merchandise sold this month". Ours is a labor business and we deal in payroll and sometimes it is hard to get that message across to them. They want us to change our business to adapt to their software instead of them adapting to our business. DON'T LET THEM TALK YOU INTO DOING IT.

When interviewing a potential accountant it is important to get the right answers to the following questions:

>>>Do they have extensive experience with SERVICE type companies?

>>>Are they willing to work with a chart of accounts consistent with our industry, not a standard "off the shelf" one.

>>>Will they willingly provide percentages on the statements, year to date numbers, and comparisons to last year's numbers?

>>>How soon can they produce the monthly statements? You should have them no later than 7 business days after you provide them them the needed information.

>>>Will they file all quarterly state, local, and federal government reports and year end W-2"s etc.?

>>>How willing are they to review the statement with you each month and "provide you an education" on what they mean?

Eventually you will, if you haven't already, purchase an industry specific software package and have you own in house accountant but these are important questions to  have the right answers to when you are beginning or are an emerging company.

I cannot over emphasize the importance of having accurate and timely financial information at all times in your company. I don't care how good you are at stripping and recoating a VCT floor or if you are the industry expert at shampooing carpet in your city. If you don't have the ACCURATE TIMELY financial data to support what you are doing, you won't be doing it for long.

It is pretty safe to say that more companies fail in business due to the lack of paying attention to the numbers than fail due to lack of increased sales or inability to do quality work. All the business in the world does you no good if you are losing money doing it and so many contractors are losing money doing it and don't know it until it is too late. Don't be one of those companies.

There is a lesson to be learned here whether you are just starting out or are struggling trying to figure out what is going on---"I'm working harder and harder and I have no money. The harder I work the broker I get". Again let me say, don't let it happen to you.

Thanks to all of you who have purchased our new DVDs. It is obvious by the robust sales that there is a need for education on Conducting an Effective Walkthrough and Getting the New Account Startup Right. We really appreciate the response.

By the way, I understand registration is now open for both the ISSA trade show and BSCAI convention coming up in November in Las Vegas. You can go to www.ISSA.com or www.BSCAI.org  for all the information. Hope you are making plans to attend these great learning events.

Till next time.

3 comments:

Cory Saba said...

Having an accountant who is skilled and experienced is not enough. It's also important that he's a person whom you can count on. It wouldn't work expeditiously if you're not comfortable with your accountant. That's important because we're talking about your funds here, so you have to give your full trust to that person. If you find a great one, then you will surely save yourself from the stress of worrying about your finances.

Cory Saba @ Integrated Accounting

Unknown said...

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Unknown said...

Great article, Dick Olleck. Keep track of your business assets if you want it to grow, and you don’t have to do it alone. Bookkeeping and accounting firms could not only help you with tax assessment and organizing your financial system, being prominent figures in community, they could also help your business grow by providing valuable networking contacts. Elias Brasel @ On Core Bookeeping Services