It’s tax time and in all likelihood you’ve had some close, personal contact with your CPA firm during the last few weeks. While taxes and financial statements are probably at the center of conversation … are there other items on the agenda? I sincerely hope so. CPAs are much more than number-crunchers and your […]
It’s tax time and in all likelihood you’ve had some close, personal contact with your CPA firm during the last few weeks. While taxes and financial statements are probably at the center of conversation … are there other items on the agenda? I sincerely hope so.
CPAs are much more than number-crunchers and your CPA-client relationship should reflect that dynamic. Certainly, timely and accurate financial information, as well as tax filings, are important, but if the conversation stops there, you are surely missing out.
In the very near term, taxes do matter. Your conversation, however, should go well beyond the balance due. One of the hottest topics at the moment is tangible property. What used to be a relatively simple consideration, focused in many cases on buy now or buy later, has taken on a life of its own. Beyond the initial consideration of what to expend is the determination of category and type of classification. With a multitude of terms swirling around, including 481(a) adjustment, safe harbor, election, partial disposition, and form 3115 — it’s not shocking that many taxpayers are surprised at the impact of the new tangible-property regulations. Without in-depth consultation with your CPA, you can quickly join that club, or worse, file a negligent tax return.
A qualified CPA is also a worthy ally as you work to ensure that your business grows and prospers. Whether considering an expansion or sale, your CPA will provide you with a full understanding of the potential financial outcomes. A conversation that commences after the deal is done can dramatically limit your options, and certainly the opportunity to approach the transaction armed with complete information.
What else should your CPA be doing for you? To begin, your meetings should not be reserved for year-end, alone. Just as you shouldn’t visit your doctor only when you have the flu, you should maintain an ongoing dialogue with your CPA. Does he or she know about your business operations? Your competition? What are your long-term plans for succession? Does your CPA know what keeps you up at night? Your CPA should be a sounding board, an adviser, a partner. The implications of this type of relationship are far-reaching — in a good way.
Let me put a few things on the table for consideration. Beyond tax and financial reporting, what about your financial-reporting system? After all, this is where everything begins. Does the system and available reporting meet your needs, providing timely and reliable information? Many businesses today utilize dashboard reports, but these important tools are only effective when reporting accurate, useful data. A conversation with your CPA can help determine whether any information issues you might be experiencing are system or data related.
Accurate information provides a clear view of the actual cost of doing business. Consideration of direct and indirect costs, overhead, break points, and profitability all combine to tell a story. The combination of key performance indicators and analysis can identify when action is necessary in order to respond to today’s quickly changing business environment. Your CPA can help you synthesize and utilize all of this.
There is almost no limit to the areas where your CPA can provide valuable insight. Financing, workforce issues, expansion, transition, management-information systems, competitive advantage, the list goes on. Broach the topics. The response may be a simple conversation or a more in-depth consultation. Yes, I know, “consultation” sounds expensive, but isn’t the price of failure far greater? You are probably talking with your CPA about taxes, why not much more?
Gail Kinsella is a partner in the Syracuse office of The Bonadio Group accounting firm. Contact Kinsella at gkinsella@bonadio.com