Making Businesses Understand why They Need You as their Accountant

A little under half of businesses have never worked with an accountant and have no plans to! On the other hand, in the same study, those who have worked with an accountant, just under 75% of them are very satisfied with their accountant. If a large majority of businesses are happy with their accountant, why are there so many businesses without them? As an accountant, it’s crucial to figure out what these businesses need & help show them why your work is beneficial to them.

So, what do businesses really want?

There are many different things a potential client may be looking for when it comes to wanting an accountant. For starters, every relationship is built on trust, and relationships can not last without it. In the aforementioned study, 78% of business owners said they want a trusted advisor, making this the top rated answer. The next top answers, tying in at 74%, are that they want accountants to understand their industry and respond quickly. Finally, being affordable comes in at fourth at 70% and communicates clearly ranks last at 69%. 

In addition to what clients say they want, it is important to know what the top, long-term issues that your clients face with money are. At the top of the list, and perhaps the most obvious, is cash flow problems (32%) If you have bad cash flow problems, most of the other common issues clients face will follow suit. This is shown by the second top answer being low profitability at a close 31% as well as the fourth and fifth ranking answers, needing capital (21%) and too much debt (11%). Your job as an accountant is to take all these worries and advise your clients to the best decisions they can make.

How do you help as an accountant?

The most considerable hurdle for accountants is that many business owners do not know why they need you. Clients need to understand that you bring more to the table than help in filing taxes and making the books look clean. There is no better place to start than being a great listener and truly understanding their issues as well as being sympathetic towards them. Furthermore, ask open-ended questions to let the client steer you in what they really need and to grasp a better understanding of what to do to help your client. Next, we all know that prompt responses are important but it is also important to streamline finances and ensure your accounting software is efficient too. If a client hasn’t moved onto the cloud-based world, it is time for them to move to online accounting software. There are many different choices out there, like QuickBooks Online or Xero, but no matter the software you will want to see to it that it fits the client’s needs, they understand it (and/or can learn too), and that is within a client’s budget. Using an accounting software reduces the chance of human error, subtracts the amount of work that has to be done from manual adding in information, and overall streamlines processes in day-to-day accounting. Additionally, as the financial advisor, you can help a client develop better financial procedures and systems to really help all these processes. On the topic of quick responses, it is vital to ensure that you have an easy, yet secure, way of communicating. You will want something where it makes it simple to send and view any financial reports, ask questions, and see if any tasks that either side (meaning you or the client) need to be done. Finally, clear communication means being able to talk to your clients in a way they can understand. This means taking your time to ensure they really comprehend what you’re doing and you are not confusing them with common work jargon. (Check out our blog here for very common accountant words when it comes to reviewing financials for some on how to explain these!)

Businesses need your accounting!

Trust comes from taking the time to get to know your client’s needs and delivering quick & efficient solutions. By guiding them through their finances at every step, and learning with them as you deliver great service, trust is bound to happen, and you will have clients who love you!

Client Guide to Year End for Your Accountant

The end of the year can be a stressful time for everyone; between the holidays, New Years’, and the dreaded tax season that looms over for April. As an accounting firm, we have our procedures in place for year end, but that could mean more ‘work’ from clients to obtain everything we need. Instead of all the back and forth, here are some ways to ensure your business is all set for your accountant and CPA at year end and why it’s important!

Gathering Documents for Year End

The type of business you own may require more things for year end, but there are many documents required for everyone. For starters, bank (and loan!) statements for the whole year. It seems obvious, but you may have missed one, or maybe you’ve been so busy you have forgotten to send the last few. Whatever the case may be, checking that your accountant/CPA has all your statements can save everyone some time. Furthermore, we require statements for every active business account and for each of those accounts, we need statements for every month. If a statement for December ends any time before the 31st, we will need January’s statement (the following month after December, into the new year) as well. Often, you see this with credit cards. For instance, your CC statement may end on the 9th every month. To accurately reflect the whole year for this account, we would need January 9th’s as it has information for December 10th to the 31st.

Next, if you do any type of contract work, confirm that you have all the needed W9s from each contractor. (Note that there are certain exclusions to this, so be sure to double check with your accountant/CPA if you are unsure or have any questions!) After that, review your transactions with no Vendor name. (In QuickBooks Online, also known as QBO, the Vendor is referred to as the person or business that that transaction went through. So if you bought food at Walmart, for example, the Vendor would be Walmart.) This is not as essential as the other tasks in this blog, but it can be important, as we’ll discover in the following section. Finally, review any other reports that your accountant/CPA may be missing that you want recorded in your books. For example, for many of our clients, we break-apart their sales to accurately reflect all the different types of things they are selling. These break-aparts always come from a report that, more often than not, the client is sending over to us. Now that you have a list of some of the vital documents needed, you may be wondering, “Why?”.

So WHY do we need all these things?

If you are unfamiliar with accounting, you may be questioning why all of these things are so important. You know that you have to hand these things over, but you are unsure what the exact reasoning is. First off, reconciliation is the process of using financial statements to verify, correct, and accurately reflect your current financial situation. In essence this means having bank statements allows us, the accountant/CPA, to make sure that your accounting software, (for us, we primarily deal with QBO), is reflecting what the bank is telling us you have done with your account throughout the year/months. This is why it is SO important to send over statements every month. We must see if the statements align for each individual month, and if we need to correct anything, we have to know all the transactions in said month from the bank statement.

Another thing a good accountant will need is all the W9s from contractors you’ve paid over the year. When you are an employee, you fill out a W2; if you are a contractor you fill out a W9. After a W9 is received, we can file 1099s- which is a tax form that shows different type of income that are not from employees. It is important that your business has all the W9s it needs so you, as the business owner, are not liable for any untaxed income on their part. Without a W9, there is no way to file a 1099, and thus you have no proof as to whether that money they received was ever taxed- which makes you liable for it. Finally, and although it is not a major issue, cleaning up your “Transaction without Payees” tab in QBO can be important. (Adding a Vendor as we talked about earlier.) Let’s say you have a $5.000.00 transaction coded as “Contract labor,” but they have no Vendor, how will we know who’s W9 to give? Additionally, cleaning up the Vendor list can verify that transactions are coded properly, and make your Book Review tab, in QBO, look cleaner!

Wrapping Up the Year End for Everyone!

Keeping these things in mind for year-end is helpful for everyone, but do not be afraid to ask your accountant or CPA any questions you may have! We are here to help your business grow and flourish through good financial planning! As a final parting note, it is a good habit to send all documents needed monthly, as well as checking in and reviewing these items throughout the year, to make year end easier on you as the business owner. This also allows time for a more in depth discussion about your financial reporting and how you can use those numbers to make better financial decisions in your daily operations.

Organizational Structures & General Organization Importance in Business

According to the Wall Street Journal, office workers waste an average of 40% of their workday. “Not because they aren’t smart, but because they were never taught organizing skills to cope with the increasing workloads and demands.” With such a large number of individuals lacking organizational skills, it is crucial to have an organizational structure in your business and assure you have organizational skills in your life.

Different Organizational Structures in Business

An organizational structure determines how an organization is set up to deal with responsibilities, roles, decision-making, and who will report to who. Organizational structures are broken apart into two categories with the first one being Centralized versus Decentralized. This is also described as a vertical structure. Centralized is popular among businesses as this structure has a very clear chain of command and understanding of their roles, responsibilities, etc. Decentralized structures allow an individual in a business to have more independence in their group/team with their decisions and these individuals or teams may reach out to others within the business to further their work or goals. This structure may work well for a business that is constantly adapting and changing. THis structure may also be referred to as a flat structure. The other category of organizational structures is Hierarchical vs. Circular. The hierarchical structure is the most commonly seen in business with the triangle shape. With the triangle shape in mind, the top will be one person as the highest in command with each person falling under it having a supervisor. As you go further down, it leaves employees with less and less decision-making, responsibility, etc. A circular structure is similar but instead of that triangle shape, you’re looking at a circle where the next ‘ring’ is the next level of management. Although all organizational structures fall into these categories, there are many variations of these structures out there when deciding what suits your business best. To give you an idea and some examples of organizational structures; we’ve included a set of pictures below.

(All pictures credited to Forbes)

Why Organizational Structures are Beneficial

Having a clear organizational structure is important for many reasons. For starters, it allows everyone to have a clear understanding of their expectations and holds individuals accountable in their roles. Additionally, with everyone knowing their place in the organization, it can improve efficiency; especially as a business grows and every part of the organization becomes more specialized in what they’re doing. Depending on your organizational structure it may also encourage growth in employees and stimulate more collaboration throughout the organization.

Personal Organization is Vital

Being organized in the workplace can be just as important as your day to day life. First off, organization can help you to create a daily routine. Having a routine can allow you to be more comfortable and reduce feelings of stress and disarray in the workplace. Furthermore, this routine can aid in making you feel more prepared for each day; thus saving time as you don’t have to make as many decisions and already know what you need to do. Another way organization is beneficial is that it can improve work relationships. By being organized, you can spend less time honing in on deadlines and may have more time to attend work events or collaborating with your co-workers; therefore improving your work relationships. Good organization also fosters problem solving as it makes you realize possible problems before they become an issue. Organization can also combat stress from burnout, forgetfulness, and lack of time management.

Keeping everything organized can also be extremely valuable when it comes to the end of the year. Knowing where all your tax statements, receipts, and other important documents can save you additional stress and prevent wasting time searching for things that should have been filed away correctly throughout the year. Moreover, if your business gets audited, not having the appropriate documents can create more issues, cause unnecessary hassle, and may even cost you money. There are numerous other ways that organization can improve business that are not mentioned here – showing that organization is such an essential part of everyday life.

Organization & Organizational Structures are Paramount

Having a defined organizational structure in your business and ensuring you are organized in your life prevents extra stress, wasting needed time, and benefits you in many ways with productivity, good health, and much more!