3 Essential Questions You Should Be Asking Your CPA
Your relationship with your accountant is important, and multi-faceted. What many do not realize is that business relationships are built on a foundation of mutual trust and communication. However, communication bears the brunt of the foundation, since it is the most important component. Having a solid business relationship with your accountant means that you are comfortable discussing issues and thoughts, as well as seeking financial advice when needed. With 2017 in its early months, it is absolutely essential that you begin thinking in earnest about your financial goals and what you hope to accomplish in the coming year.
With that in mind, here are 3 essential questions you should be asking your CPA next time you meet:
1. How do I better manage my cash flow?
Cash is one of the those elements of financial well-being that needs constant management, and there are always ways to improve. Your accountant is the best counsel to seek for how to better improve cash flow management, and make sure that it is being allocated the best way possible.
With cash flow management, it is far better to be proactive than reactive. Understanding your long-term goals, and what measures need to be taken to get to that point is essential. Cash flow will play a large role in these future goals, so it is always worth having a plan in mind that you can adhere to over the course of the year.
Having a positive cash flow is a challenge for many business owners, but it is absolutely necessary for the overall health of the business. Make sure to consult with your accountant on your current cash flow state and identify weaknesses and areas for improved management. Your accountant will be able to do a careful analysis and spot out cash-flow tendencies that might be overlooked otherwise.
2. How can I improve my business?
Another essential topic of discussion is what changes and modifications your business needs to evolve and grow. Even if it is doing well, there needs to be long-term and short-term financial goals for your organization and its success.
Your accountant is a trusted advisor with a unique perspective, after all, they have access to your financial data. Since they are able to see within the organization as well as how it is viewed externally, they are in the best position to help you construct tangible methods to grow your business.
Your accountant is able to give advice based on holistically looking at your business, as well as the tax and finance landscape. Many small business owners get caught up in trying to juggle day-to-day operations and manage big picture planning simultaneously. Instead, consider enlisting your accountant to help you analyze your financial data and find the gaps where improvement is needed.
3. How can we make this tax season better than the last?
Again, most of the conversations you have with your accountant will revolve around best practices and planning for the future. This is another important conversation that you must have with your accountant before tax season befalls your business, as your accountant will have extremely valuable insights.
Your accountant is in the best position to give you advice on improvement and best methods for tax going forward in the year. There are several elements of taxation that need to be monitored, including payments, deductions, record-keeping, among many others. Your accountant will be able to help you organize these different elements along with how to improve on the way they are handled.
Do not hesitate to ask your accountant questions, even if they may seem small or insignificant to you. Make sure to ask them if there are developments in tax law that may affect your business, the best time to make large purchases, and best practices in keeping track of deductions. Furthermore, they should also be able to assist you in finding ways to maximize tax savings.
Moreover, their expertise is based on a deep understanding of finances and taxes, so they are ultimately your best resource for this endeavor. However, their success is largely dependent on the level of communication that is established beforehand.
As long as you make sure to keep an open dialogue between you and your accountant about what is best for your business, your business will thrive. For more information, and for any questions, please do not hesitate to contact us.