Not all accountants are created equal or have your best interest in mind
I recently hosted a group of women entrepreneurs who had two things in common: they were all passionate about their businesses, and they were smart!
However, as the group discussed their challenges and opportunities, one of the women told a story about how her accountant had failed to do her business 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 crucial to business success.
I remember in my early days, before I was getting monthly reporting, my accountant pointed out that my margin was slipping. This information hit home: 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. He, or she, should be informing you on 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!
A bad accountant can be a disaster for the business. As a business coach working with hundreds of businesses over the past eight years, I have heard horror stories about accountants and bookkeepers. A bad accountant will not complete your file within six 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 have written checks to themselves.
Your accountant or bookkeeper might wreck your business, but it may be your fault. As an owner, you must be aware of the risks of not filing returns or giving your accountant access to your bank accounts. Review the statements you receive from your bookkeeper monthly and look for discrepancies. You should also be monitoring your bank statements and credit card statements for fraudulent charges.
Having a good accountant on your team is a real blessing to your business. But not all accountants are created equal or have your best interest in mind.
Dave Fuller, MBA, is an award-winning business coach and a partner with Pivotleader Inc.
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