“Your accountant costs how much?”
Now there’s a phrase I’ve heard repeatedly between business professionals.
Here’s another phrase we’re all familiar with: “You get what you pay for.”
When it comes to accounting, there’s no substitute for experienced, professional oversight on the financial and operational aspects of your business. Unfortunately, many business owners and CEOs don’t fully understand what constitutes actual accounting, not to mention the huge benefits of hiring a good accountant.
The Difference Between a Bookkeeper and an Accountant:
This is an important distinction. Some business owners refer to the person who pays the bills (accounts payable) and handles customer payments (accounts receivable) as the company accountant. While important to your day-to-day business processing, this clerical position is historically referred to as a bookkeeper. This isn’t your accountant.
So, what’s the difference? A true accountant is analytical, not clerical. An accountant analyzes how to best use money across your entire operation to grow your business and maximize profit.
Most importantly, accountants save you money. An accountant’s objective is to pay attention to your money. The goal? To increase your bottom line and improve your business’s profitability.
It’s not about how much you’ll spend for a good accountant; it’s about how much it’s costing you NOT to have one!
How a Good Accountant Saves You Money
A great accountant is worth their weight in gold. A good accountant will save you money by:
1. Improving Cash Flow
- Accountants help you get a full picture of your bottom line by reporting on current cash flow, and projecting future cash flow. (Remember: Cash is King!)
- A good accountant not only anticipates cash flow problems, but also manage real cash flow issues when they happen. When you’re in a pinch and need money in the door, they’ll find ways to collect on outstanding A/R faster and know which payments can go out the door a little slower on the A/P side.
2. Enhancing Strategic Planning
- Accountants don’t just assist with creating strategic operating plans, but they know how to convert those plans into budgets. Trouble turning those sometimes-fuzzy goals into hard numbers? Accountants make it happen!
- Do you know which of your products earns the most money? Or what sector of your customer base is most profitable? Accountants evaluate your products, services and customers to create a frame for product line profitability (PLP).
3. Creating Meaningful Financial Statements
- The bank cares about your Balance Sheet and your Cash Flow. If you aren’t prepared to report on these elements with the level of knowledge and detail they expect, then you need a good accountant to help!
- On the operations side, you get meaningful and useful PLP reporting and overall financial analysis to become more profitable. The bottom line: you’ll discover big places to start saving money!
So How Do I Find (and Hire) a GOOD Accountant?
There are a few options for hiring: hire an internal, full- or part-time individual accountant or hire through an outside accounting firm. If you opt for the later, keep in mind: not all outside accounting firms are created equal! In fact, many clerical bookkeeping companies refer to themselves as “accountants” but don’t offer the full range of services you’ll need for your business.
No matter which hiring option you choose, there are universal qualifications to look for:
- Good Recommendations: Ask around at networking events or ask your trusted business partners whom they use.
- Priced Mid-Range or Higher: Salary shouldn’t be the main driver. We are back to the “you get what you pay for.” If an accountant’s price is too low, you may actually get less value than if you paid a bit more. Remember a great accountant saves you money in the long run.
- A Certified Public Accountant (CPA) Title: It’s important to keep in mind, this is only a pre-qualifier. A CPA title doesn’t mean a particular accountant is a good fit.
- Experience: We all start somewhere, but when it comes to your money, you need someone you can trust. Review their résumé and look for a consistent work history.
- Good References: On a similar note, always ask for references and follow up with them. Again, this comes down to the,” trust but verify,” mentality. Don’t skimp on your due diligence.
- Tax Knowledge: While I highly recommend hiring an expert tax specialist to do your actual taxes, your inside accountant should have rudimentary tax knowledge, at minimum, to ensure accurate and adequate compliance with tax law.
A good bookkeeper is critical for keeping track of the day-to-day account management inside your business. However, good accountants will “monetize your knowledge” to help improve your financial strategy, give you a deeper understanding of your businesses growth opportunities, and simply increase your profitability. So, don’t underestimate the real value in hiring a good accountant!
Ask your colleagues and network who they use and trust, Chances are you’ll receive many recommendations for an accountant to take your business to the next level. Remember, a great accountant eventually pays for themselves. Invest in an accountant and you’ll thank yourself down the road.
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