As Matt walked into his accountant’s office, he couldn’t help but think about how he had neglected to meet with him regularly. He knew he should have been meeting with him at least quarterly, but somehow he always managed to cancel or forget about the appointments. Now, he was in for a meeting that he definitely did not want to have.
“I’m sorry I’m late,” he said as he sat down. “I’ve been really busy lately.”
“That’s okay,” his accountant said. “I’m glad you’re here now.” He reached into his desk drawer and pulled out a file. “I have some bad news.”
Matt felt his stomach churning as he began to speak “What is it?” he asked, trying to keep the fear out of his voice.
“Well, I’ve been going over your financial situation, and it doesn’t look good,” the accountant said. “You’re behind on your taxes, and you have a lot of credit card debt.”
Matt felt like he had been punched in the stomach. He had known that things were not going well, but he had never realised just how bad they really were. He thought about all the people who depended on him – his employees, his suppliers, even his landlord. What would happen to them if he went bankrupt?
“It’s not just the money,” the accountant said. “You haven’t been keeping up with your paperwork, and you’re not keeping good records. If you don’t get your act together, you will be in big trouble.”
Matt felt like he was going to be sick. He had never been good with numbers, and he knew that he had been neglecting his paperwork. But he had never realised just how serious the consequences could be.
Running a business is hard enough without worrying about the nitty-gritty details of your finances. That’s why it’s so important to have a good relationship with your accountant. However, far too many business owners, like Matt, only meet with their accountant once a year—if that. Some don’t even have an accountant at all. This can be a recipe for disaster.
If you’re not meeting your accountant regularly, you could be making some serious mistakes that could cost you dearly down the road. Here are just a few of the consequences of not having regular meetings with your accountant:
1. You could be paying too much in taxes.
Your accountant can help you take advantage of all the deductions and credits you’re entitled to so that you don’t end up overpaying your taxes. This is especially important if your business has undergone any changes during the year, such as hiring new employees or relocating to a new office.
2. You could be missing out on important tax breaks.
There are always new tax laws being enacted, and it can be difficult to keep up with all of the changes. Your accountant can ensure that you’re taking advantage of all the latest tax breaks so that you don’t end up paying more than you have to.
3. You could be making costly mistakes.
Even if you’re keeping track of your finances on your own, there’s always a risk of making mistakes that could cost you dearly. For instance, you might overlook eligible expenses when preparing your taxes, or you might miscalculate your payroll and end up owing your employees back wages.
4. You could be missing out on opportunities to grow your business.
Your accountant can provide valuable insights into your financial situation and offer suggestions on how you can improve it. For example, they might recommend that you invest in new equipment or open a new location.
5. You could be putting your personal assets at risk.
If your business is not in good financial standing, your personal assets could be at risk if the business defaults on its debts. This is especially true for sole business owners and partnerships, where your personal assets are typically not protected from creditors. Meeting your accountant regularly can help you avoid this situation by keeping your finances in order.
If you are like Matt and not having regular conversations with your accountant or you are not hearing from your accountant until the last minute before tax season, it might be time to reconsider your relationship.
If you want to run a successful business, you need to have a good relationship with your accountant and meet with them regularly—preferably at least quarterly, if not monthly. Failing to do so can have serious consequences for your business, both financially and operationally speaking.
Meeting your accountant on a regular schedule doesn’t only help you avoid having to suffer these consequences. It can also give you insight into how you can get more out of your business. Whether you want to grow your business or try to avoid these consequences, we’re here to help. Let’s discuss this from your business’s perspective, you can book a free discovery here.
Looking for resources to help you as a first-time business owner? Then we highly recommend learning from Alex’s experience next.