2) Be proactive and expect proactivity in return
Once you’ve handed off your financials to an expert and clarified your mutual goals, stay engaged and effective — that is, proactive — in the accounting process. Here’s how.
Ask every question you have
Curiosity is natural. It’s a powerful character trait for a leader, especially regarding a business’s inner workings.
One of the common reasons business owners don’t ask questions is that they wrongly anticipate friction in getting the response, or they fear hearing an intimidating answer. Expect this mental block and push through it. Know that it lessens over time with continued inquiries. A good accountant will appreciate your interest. They don’t expect you to be a corporate finance whiz — that’s their job. So ask questions; when you do, you’ll find your partnership grows in capacity.
To build the habit of asking ongoing questions, plan to speak with your accountant monthly. Keep a running list of ad hoc questions. Ask about everything from technical aspects of finance (like, “What is deferred revenue, anyway?”) to general guidance (such as, “How much should I be paying myself at this stage?”). You can even ask about broader trends (for example, “Does real-time payment mean we reconcile transactions constantly?” or “Should we accept Bitcoin?”) and more.
Then, use a standing list of strategic questions to ask in every monthly meeting. Here are some examples:
• What have you done for our business this month? (The answer may seem obvious, but some nuances may surprise you).
• How healthy is my current cash flow, and what can I do immediately to improve it?
• Do you have any recommendations for avoiding financial trouble or capitalizing on an opportunity?
• Can I do anything now to maximize my tax savings later?
• How can I help you answer these questions even more thoroughly next month?
In exchange, an accountant will likely ask questions about your industry and your operations, too. Be ready to answer your accountant’s questions as diligently as you expect them to answer your questions about financials.
You’ll cover basics, such as your business structure, payroll needs, and sales-tax filing requirements early on in the relationship. Questions that indicate a proactive accountant run more along these lines:
• How (if at all) have your goals changed since we last spoke?
• Do you have plans to grow? If so, how (geographically, by diversification, etc.)?
• What’s your greatest financial challenge right now?
• How happy are you with your team’s performance and output?
• Have you encountered any regulatory hurdles lately?
Reciprocal interest shows a mutual desire for success. Ask good questions often, and expect your financial advisor to do the same.
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Lean in to the concepts that feel intimidating
Best-selling author Garrett Gunderson claims that the number one reason business owners dislike accounting is that they feel powerless. At Ignite Spot, we agree — business owners often avoid their financials. But neglecting them doesn’t prevent them from vexing you. In fact, when you dodge the difficult issues, you miss out on crucial intelligence.
So lean into challenging concepts (and their accompanying tasks). The more you do, the more you’ll learn, and the more benefits you’ll see. Need some examples? How about exploring new technology, engaging in exercises like cash flow analyses, learning about unusual gains and losses, and dabbling in some scenario mapping?
In their book Proactivity at Work, management scholars J. Michael Crant and Kaifeng Jiang reveal that personal initiative leads to a better attitude, enhanced leadership and task performance, and even lower reported levels of exhaustion. Plus, your accountant will enjoy talking with you about the more nuanced concepts of corporate finance.
In exchange, an exemplary accountant will also press into challenges, working through the complexities and tangles of your unique operations. Expect this proactive inclination; the accounting practitioner who demonstrates it is a keeper.
Find a proactive accountant today. Download the pricing guide.
Look for both trouble and opportunities
Another way to get the most out of your outsourced accounting team is to review your financial statements with interest. Search out trends and curiosities within the numbers there.
That means you must learn to read your financial statements. Your accountant can recommend resources to get you up to speed if you’ve never analyzed a balance sheet or an income statement before.
Once you know your way around these reports, compare the figures to those of the previous period, and highlight notable positive changes in green and negative changes in pink. Then, review your long-term goals, and determine whether (and what) changes you should make to align the business with the trajectory toward those goals.
In return, expect the same diligence from your accountant. In fact, if your expert hasn’t already come to you with suggestions to sidestep snags, it may be time to reevaluate your partnership. You’d be in good company: a lack of proactive attitude and output drives 72% of business owners to leave their accountants and switch to a better option.
If that’s you, take heart: there are plenty of experts out there who love to investigate and puzzle together fixes and wins for their customers. A recent survey of over 2,600 accounting pros reveals that the thing they love most about their role is solving problems for their business clients.
Source: Robert Half, 5 Surprising Facts About Accounting as a Profession
But when both sides look for trouble and opportunities on behalf of the other, the partnership thrives every time.
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