I want to provide 5 easy ways to get along with your accountant. Rather you have one yet or not, this will still benefit you. A business owner and accountant are entering into a business partnership. This will be one of the most important business relationship you commit to. So it is very important that the relationship is set up successfully. So here are a few things you, the business owner can do to make sure this happens.
1.) Have a separate business account
Rules number 1 when starting a business is go get a business bank account. If you are real serious about growing your business you will have 2 checking accounts and 1 savings. 1 checking account will be for all your business spending and income to come in and out. The second checking account will be where you accumulate and pay your taxes. You do not want your tax money to be commingled with your regular business expenses account. It will look like you have more money than you actually do. Then you will spend more money than you actually have. The 3rd bank account should be the money you save for your business. A business should retain ( keep) some of its earnings. We are not in a good business position if we are always spending what we earn. Now it may take some business a while to save in their business. However, just as you should have a personal savings, you should also have a business savings.
2.) Keep all business receipts and invoices
Rule number 2 is keep all business receipts and invoices. The expenses that go out of your business should have a corresponding receipt or invoice. You get tax deductions on the receipts you keep not the money you spend. If you can’t show proof of the expense it doesn’t exist. God forbid you are ever audited and have to produce receipts you do not have, legally the IRS can make you pay back the expenses you took deductions for. To make it plain, if you took $5,000 deduction for business expenses and only kept $1,000 worth of receipts you will be penalized for the $4,000 you have no proof for. Meaning you pay back the $4,000 with interest.
3.) Don’t deposit or withdraw without giving account of the money
Withdraws and deposits are entered in accounting software differently. It is not an expense or income. Unless otherwise advised and proven with a receipt or proof of sale. Communication is key. You and your accountant will share confidential, personal and sensitive information. You want to not only be able to communicate with them but you should also like and trust them.
4.) Be available
Many people complain how CPA’s or Accountants are too busy. They take too long to get back to you. Well I personally have a 24- 48 hour rule. I like to get back to my clients within 24 to 48 hours. However that works both ways. I like for my clients to also get back to me as well. In order to keep our workflow going, being available for questions, answers and concerns work on both party’s.
5.) Be Organized
Know your stuff and have everything available. it makes for a better relationship when the business owner know their own business. You may not be good at taxes, bookkeeping or paperwork but you should be good at assisting any third party to help you with your task. You don’t have to be perfect but it helps if you are organized.
Finding a trustworthy reliable accountant to keep your books can be hard. If you want to know more about my bookkeeping services schedule a time for us to speak and lets talk soon.