Who's your Valentine this year? If you're a small business owner, it should be your accountant.
No, I'm not suggesting you date your accountant. But what I am suggesting is that, well ahead of tax season, your accountant should be your closest confidant and biggest ally.
Too many small business owners have an on-again-off-again relationship with a financial advisor. But, according to a recent study conducted by Xero, more than 65 percent of failed entrepreneurs blamed financial issues for their downfall. Forming a strong relationship with an accountant can make the difference between success and failure.
Beyond filing taxes, accountants can help with bookkeeping, investment management, and business audits -- services all business owners need. Plus, an experienced accountant who's familiar with your business can help you navigate many nuances, like your state and city's rules, regulations, and compliance requirements.
But the path to a productive experience with an accountant starts with building a foundation for a long-term relationship, not settling for a tax-season fling. Here are six tips for getting your relationship off on the right foot:
Don't walk into your first meeting with an accountant with scraps of paper, unopened envelopes and illegible receipts. You'll ultimately save energy and money if you spend a little extra time upfront: organize paperwork and set up your business on online banking and cloud-based money management tools. If you're paying an accountant by the hour, it will make it easier for her to work efficiently and it will give her a clearer window into your business.
Know what you need - and communicate it
Do you just need someone to help file your taxes? Or do you want someone familiar with your industry who can help you prepare for potential partnerships and growth opportunities? Do some homework, talk to your network and reach out to local business associations to determine the kinds of services and expertise you really need. Once you know what you need, be clear with your accountant so he knows how you'll work together, how often you'll be in touch and what you expect.
Collaborate in real time
Your accountant cannot help you if she doesn't know your numbers. Even if you don't need a regular check-in with your accountant, make it as frictionless as possible for her to access your numbers when she needs them. Online collaboration and data-sharing tools make working together easy, no matter where you're each located, and many online accountant platforms (Xero included) enable accountants to access client accounts on-the-go. These tools can also help your accountant analyze your business data to uncover hidden strengths and weaknesses, and help you better prepare for the future.
Use your business plan as a roadmap for collaboration
If you don't have a business plan already, make one. And, once you have it, use it as roadmap to guide quarterly conversations and decisions with your accountant. Your business may certainly evolve and priorities may change, but creating a business plan can be a powerful exercise in thinking through scenarios and anticipating problems before they hinder growth. Regularly discussing your business plan with your accountant can also help keep you accountable and focused on the key drivers of growth for your company.
Don't let your accountant be the last to know
If you're planning to make a big purchase, enter into a major partnership or take on large investment, don't wait until the eleventh hour to tell your accountant. Share your vision and bring him into key decisions. The more your accountant understands where you want your business to be and how you want to get there, the better equipped he'll be to recommend money-saving financial practices and avoid tax penalties.
Skip the flowers, make a referral
Finally, remember that your accountant has a business to grow too. If you really love her work, forgo the chocolate and recommend her to your peers. Showing your support and helping her build a book of business can go a long way in establishing the trust and camaraderie at the core of every important professional relationship.