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How to Better Involve Your Accountant (Part 1)

PEMBROKE, Mass. — You bring your books to your accountant at the end of the fiscal year and a few weeks later, he sends you statements and tax bills to pay. His job is completed for another year.

Is this you?  Do you view your accountant merely as a producer of report cards of your performance and a tabulator of your tax liability? Then you are losing out, for your accountant should be involved in your business. He should be helping you make decisions. He can become a back seat adviser. Here’s how to alter the relationship:

MINIMIZE THE MINUTIAE

First, don’t involve your accountant in the daily minutiae of your business. This will take his/her whole attention.

This way, your accountant does not do the bookkeeping. For that task, hire a bookkeeper or train an employee to do the paperwork, or do it yourself using a computer program.

Maintaining the daily/weekly records and becoming an adviser simply will not work out.

DISCUSS LAUNDROMAT LOGISTICS

Talk about the business to your accountant. You don’t want to take a lot of time, but whenever you are dealing with your accountant, give him a feeling of how things are going.

Discuss what is going on in the business, the problems you are dealing with, and the situations that worry you the most.

Make him understand the basics of the Laundromat trade—the price/cost equation, the expense of the extras (parking, all-night lighting, health insurance for staff), the elasticity of utility costs, marketing approaches, revenue distribution by departments, and add-on trade profitability.

Provide him with a break-even analysis—at what daily point is cost paid for. This will help him understand the relationship between fixed costs and variable costs. Analyze the different marketing strategies you’ve tried and how successful they were.

VISITING THE STORE

Encourage him to visit. If you own multiple locations, give him a tour. Nothing makes a memorable impression like a visual memory.

When he’s there, show him around. Point out the different machine sizes and why this distribution exists. Visit the parking area and talk about overfill times. Show him your wash/dry/fold operation. Introduce him to staffers. Let him watch customers process their clothes.

If you have time, take him to a nearby competitor and explain why this competition is weak or strong. Point out reasons that customers might leave you for this other store. This will educate him about the industry.

INDUSTRY FAMILIARIZATION

Periodically, send industry information. Rather than send the full report, summarize the essence. Make it easily comprehensible.

For example, for a report of industry figures, summarize the five important figures, such as average sales, utility percent costs, square-footage revenue, number of employees, and price per wash/dry/fold.

Your summary might include these industry figures alongside your figures so your accountant can see where you stand among the industry.

Don’t do this weekly, for that’s overkill. Three or four times a year, send out a packet of information. That would make it manageable, while still being informative.

Check back Thursday for the conclusion!

An Outsider's View

Have a question or comment? E-mail our editor Bruce Beggs at [email protected].