Conversations with Your Accountant (Part 1)
1. Review of financial statements. Owners focus mainly on P&L or metrics that generate emotion. Confuse key process indicators with key performance indicators. Finance team can be good and generate good P&L and balance sheet but usually not the best at interpreting the data for the owner. Having the conversation with you accountant gives you an outside perspective, takes emotion out of the discussion and helps identify opportunities you would otherwise miss.
2. Review of variances. This can be any process or performance indicators. Cost overruns, employee inefficiencies and changes in the market are examples of areas that can be identified when working through the comparative figures…monthly and annual comparatives
3. Trending. Looking at income, expense, asset and liability accounts to see what is trending up and down. This also will help provide a perspective as to weaknesses, inefficiencies and opportunities.
4. Taxes. Tax planning is not a once or twice a year conversation but one that should be held quarterly. Are quarterly estimates being paid, are there opportunities that you could pursue to minimize exposure? Are you following the plan? Are there changes which you need to be aware?
5. Future. What is the plan for the future of the business? Your lifestyle plans should also be part of the conversation. If you need more money out of your business to support your lifestyle, this needs to be part of the business planning conversations. What needs to happen in the business now to support future opportunities and goals?
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