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:
CUSTOMER PERSPECTIVE
Try to make him a customer. This might be difficult. He probably does his laundry at home or doesn’t live in the area. But, possibly, he could come once or twice to do his laundry.
This would give him a feel for what it is like being a customer. This would provide insight into what customers expect from their Laundromat, as well as an idea of problems that might arise, which would annoy the customer.
If this is infeasible, then you might do some laundry in his presence, and talk about all the things that might go wrong.
CALL WITH QUESTIONS
Periodically, call him up with questions. Don’t call him every time you have a question, but rather call him up occasionally when you have several different issues to discuss.
Bulking your concerns is a good thing because it takes less of your accountant’s time.
Sample questions might include the following:
- I’m thinking of buying a second store and am wondering what financing would work best.
- I want to get into commercial work and I’m wondering what name to call the offering.
- I had store damage and I’m wondering if you have any suggestions as to how to deal with the insurance company.
- I’m not satisfied with my wash/dry/fold volume and I’m wondering if you have any ideas for boosting the revenue.
- I’m considering buying the building I’m in, and I’d like to run over the figures with you to see if buying makes sense.
UNDERSTAND THE NUMBERS
This person is a numbers expert, and he’s the one to go to for advice. If he has any feel for the business, he could be most helpful.
Understand the financial statements and ask questions. Most operators take their financials and drop them in a file. But, you really want to comprehend your reports and see how the figures relate to your management.
So, ask why depreciation is so much. Ask why utilities came to 28% of revenue when they came to 24% last year. What did the $14,000 marketing costs include? Is the asset to liability ratio working to maximize leverage, or should you be borrowing more money? Should the rental fee be reduced and moved to salary to reduce liability?
Go over your reports until you really understand what they are saying. Compare years to chart your direction. If you lost money, figure out how you can recover next year, at least on paper.
ACCOUNTANT TO ADVISER
Ask your accountant what else he can do for you. Maybe he is a real estate expert and can move you into rental properties.
Perhaps he knows of individuals who would like to work for you and who would make a good fit. Possibly he attends sessions of small-business owners who meet regularly and discuss their mutual problems, which is something that might interest you.
Maybe he partners with a lawyer who would assist you when you require legal services. You never know unless you ask.
By doing these things, you will develop an adviser relationship with your accountant.
Missed Part 1 of this story? You can read it now HERE.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].