As a business owner, you probably want to do everything you can to control your business finances. That’s why it’s imperative to work with an accountant you can trust and rely on to maximize the financial health of your business. Whether you have an in-house accountant or have outsourced all of your bookkeeping duties to an accountant at a company, you want to make sure that the person you’ve entrusted your company’s finances to is doing the best job possible. That said, do you wonder if you’ve hired the right person for your company’s accounting needs?
From my experience as CEO and Founder of CMA Exam Academy (a Certified Management Accountant Examination Exam Program) and as a CMA myself, I know how important it is to work with an accountant who truly has your company’s best interests at heart. You wouldn’t want to continue working with an accountant who isn’t doing their best to increase your bottom line! That said, here are some telltale signs that it’s time to find a new accountant for your business.
They do not provide financial statements every month
As a business owner, you will constantly have to make critical decisions to move your business forward. How would you be able to make the smartest and most informed decisions for your business if your accountant did not regularly provide you with a profit and loss statement, cash flow statement, balance sheet statement, and other crucial financial documents every month? Knowing exactly what is in those statements will give you an accurate picture of profit margins, business expenses, and the amount of cash available for large business purchases.
You should analyze these statements each month to locate areas of the business that may be draining overall profits. Reviewing these statements will also help you better budget for next month’s initiatives and forecast future sales and profits. That said, if your current accountant doesn’t share these financial documents every month, it might be time to look for a new one.
You find many inaccuracies in your financial statements
Let’s say your accountant provides your financial statements every month, which is ideal, but you notice a ton of inaccuracies in it. The delivery costs are not correct, the amounts of certain customer invoices are wrong, the payroll amounts are all wrong… all these inaccuracies will lead to a false representation of the profit margins and the overall result of the company. It also shows that your current accountant is doing a sloppy and careless job or just doesn’t have a great attention to detail, which is paramount in managing the finances of any business. So if you notice all kinds of errors in your statements, it would be in your best interest to consider finding a new accountant.
They don’t regularly reconcile your accounting books
To optimize the financial health of a business, an accountant should reconcile the books (i.e. compare bank statements and journal entries, bank deposits and withdrawals in the general ledger, etc. to s make sure everything is consistent) on a regular basis. If they don’t, they can easily forget to record a recurring monthly expense when budgeting for the next month. Also, your accountant may not even realize that an invoice hasn’t been paid yet or they’ll just estimate what a transaction was when writing the journal entries, which could be way off the mark. of the actual amount (leading to an inaccurate financial picture).
They take way too long to answer your questions
It’s a big. When running a business, there will likely be times when you have a critical question for your accountant that needs to be answered immediately. Maybe you need to know if you have enough budget left to pursue a promising new sales strategy. Or, you may need to quickly check if you were overcharged when buying raw materials in bulk to manufacture your company’s products. Whatever the case, does your accountant take forever to answer your emails/calls or does he just not answer some of them? Not only is this incredibly frustrating, but it can also cause you to miss out on business growth opportunities.
Don’t you want to know that your accountant values your business? That they really care about helping your business grow and succeed? I bet. Yes, your accountant might be incredibly busy, as we all are, but there’s no reason why he can’t send a quick email to let you know he can get back to you completely a bit more late. So if your current accountant is taking forever to answer your questions, it might be time to start looking for a new one.
They do not document expense receipts accurately
As a business owner, you probably have a ton of expenses that you write off each tax season. These can include costs for packaging and shipping supplies for your products, bulk raw materials, digital marketing costs, project management software, billboards and other advertising, dinners business etc. It is your accountant’s job to ensure that all receipts for these expenses are properly documented. This will be essential in the event your business is audited by the IRS – having proper documentation of all receipts will make the audit much easier and much less stressful.
So if your current accountant isn’t recording these receipts properly, it’s time to start looking for a new one. Trust me, the last thing you want is for your business to be audited and you find out that your accountant didn’t bother to record any of your receipts. This could result in hefty fines and worse.
They don’t help with financial analysis
The accountant you hire should be your company’s financial expert. It should provide you with an in-depth analysis of your books and records to help you fully understand the financial health, overall costs and profit margins of your business. This financial analysis is essential to keep you informed of the current state and potential future of your company’s finances, which will help you make sound business decisions.
So, if your company’s current accountant isn’t helping with a financial analysis at all — he’s just keeping the books up to date and calling it a day — it’s time to find a new one. I recommend looking for an accountant who makes it a point to walk you through each statement at the end of the month and show you areas of the business to cut costs, allocate more budget, etc. It will help you run your business much more efficiently. .
To wrap it all up
As a business owner, you’ll want to entrust your business finances to the best accountant possible. It’s time to find a new accountant if your current accountant isn’t providing monthly financial statements, doing monthly reconciliations of your company’s books, or helping with financial analysis. Other telltale signs that it’s time to find a new accountant are if they don’t help you with financial analysis and you find a lot of inaccuracies in your books. Start looking for a new accountant now if any of these signs apply to your current accountant.
Nathan Liao is the founder of CMA Exam Academy, one of the top Certified Management Accountant examination exam programs. As a CMA and CMA Coach, Nathan mentors accounting and finance professionals in over 80 countries to achieve their CMA certification in as little as 8 months. The CMA Exam Academy’s unique exam framework has proven to be the key to its students’ outstanding success in achieving their dream of earning the Certified Management Accountant certification. www.cmaexamacademy.com