Outside help of any type can be hard for any business owner to weave into day-to-day operations. The thought of sharing business practices and financial information with outside service providers is an unsettling one to many. However, the day usually arrives when partnering with others to lighten your load is the right thing to do. In regards to accounting, the reasons to form a relationship with an accountant are varied. Let’s take a look at some of the signs that indicate you need to give this move serious consideration.
1.) Numbers are not your thing (no matter how hard you try)
Many business owners try and handle the books by themselves, at least early on. Some succeed. For others, the frustration brought about by handling the accounting tasks is enough to make them think about throwing in the towel all together. The financial tasks associated with keeping afloat are many — from handling payroll and receivables, to closing the books and tax reporting. If and when you feel lost in a sea of numbers it is time call an accountant. Many wait until large mistakes are made or an important deadline is missed before making the call, which makes the work an accountant must do more costly for you in the long run.
2.) You shutter at the word “taxes”
Taxes will always be a factor in your business and they are always changing. An accountant is your best ally in the fight to stay compliant with all regulations. Failing to do so will most likely result in penalties you will be made to pay. Plus, an accountant can keep you informed of and help you apply for tax credits you could be eligible for and bring to light deductions available to you. Don’t just guess what you will owe in taxes — let an accountant provide you with those number and file returns for you. Year-end tax planning is an essential consideration to minimize the tax impact.
3.) You must keep others informed
You have business partners, family members, investors, etc. and they all want to be kept informed of the financial state of your operation. Detailed reports and current business plans are key here. Let your accountant guide you through these elements so you can share your information with those who need to see if with the utmost confidence that it is accurate and up to date.
4.) Planning and monitoring
Accountants can play an important role in developing an overall business plan and monitoring of the results. Farmers can achieve their objectives to the farm and family in a more organized manner with a business plan. Also, planning enables a careful examination of the existing resources and their best allocation. Accountants are uniquely prepared to assist farming businesses and find opportunities to improve farm efficiency and profitability.
5.) The numbers don’t add up
Sales are climbing, but profit isn’t following this upward trend. Now what? It is time to look at all of your business costs and re-evaluate in order to adjust operations in order to improve profit margins. An accountant will provide you with recommendations and forecast different scenario outcomes.
6.) The numbers do add up, but you can’t keep up
The business is growing quickly, money is coming in. Your head is spinning with thoughts of increasing production and staff. Expansion is right around the corner. A surge of growth presents the perfect opportunity to work with an accountant. Don’t let your good fortune bury you. An accountant can help you make smart choices that will lead to even more growth.
7.) What you offer is in demand
You find your expansion efforts include distributing in another state or even opening a new location across state lines. Alert an accountant of your plans and begin working with them on items such as payroll tax-reporting, regional sales and income tax and compliance. Different states have different laws. A good accountant knows them.
8.) You plan to buy or sell
Selling even a portion of your business, let alone all of it, is a stressful endeavor. Navigating the choppy waters of this type of transaction without the help of an accountant isn’t advisable. Without their help, you could pay large amounts in taxes or miss important elements of the transaction. The same goes for buying or selling property.
8.) An audit has reared its head
If you become subject to an audit, you can count on working through it to cut into the time you spend working on your business. An accountant can work with the IRS on your behalf throughout the entire process. If you think you can go this alone, think again. An accountant will surely lessen your load throughout the audit period.
10.) Quality of life
Most farm businesses are unique. The farm workplace and financial realities on the farm intertwine with relationships and the running of the household. Accountants are prepared to be your trusted family advisor. An accountant can help the family discuss quality of life issues, values, and goals. After assessing the overall family goals, an accountant can assist in setting and monitoring priorities.
If even just one of the signs I touched on caught your attention, then now may be the time to research different accounting options. While you will have to pay an outside accountant for this assistance, they money they can save you in the long run and the ways they can set you on the right path to business growth and success makes the investment worthwhile.
Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through www.HolbrookManter.com.