Extracting Value From Your Accountant

Many SMB owners aren't sure if they should be getting more value from their accountant. The short answer is yes. It's all about finding the right accountant that is flexible in their way of operating. Often the difficulty in extracting more value lies within an ambiguous unknown. You don’t know where to start or, worse yet, what questions to ask. It's time you changed the way you approach the year-end conversation with your accountant so you can begin retaining more value than just a set of financial statements.


Changing the frame of reference  

"Jerome, let's discuss your cash flow trend over the past two years. It's been declining significantly." Sounds familiar, right? This presentation by the accountant reflects hindsight bias. To quote Sigmund Freud, "If we start from the premises inferred from the analysis and try to follow these up to the final results, then we no longer get the impression of an inevitable sequence of events which could not have otherwise been determined."

This issue could have been identified earlier by the accountant. How can the business owner prevent it? It's about reframing the client's perspective on their relationship with their accountant. Typically, year-end meetings with accountants focus solely on reviewing the past year. Changing this mindset involves considering ways to engage in forward-looking discussions during the year-end conversation, rather than solely dwelling on the past.

Tap into your Accountant's Knowledge

Let's touch back on the hindsight bias quickly to make sure we've got the hang of it. The hindsight bias tends to make us feel like events that have happened are more predictable than they are. For the small business owner, the statement mentioned above is true, but not so much for the accountant. Why? If you remember, it's because they already know how to spot these issues from miles away even before they happen. The problem is by the time they’ve brought the issue forward with you it's too late.  

Accountants are really good at risk identification, but they are also good at assessing impact and likelihood.” - Sarah Keyes, CPA.

Let's avoid this problem for the 2023 and 2024-year end.  

Your accountant is a deep pool of knowledge that is ready to be taped into. If you're lucky enough, you've got a fantastic accountant who will be more than willing to teach you a few things to understand better and analyze issues they would notice when it's too late. You can try and set up a meeting with your accountant to ask them a few questions on this topic.

Try asking the following questions to get a conversation rolling.  

  1. What are some of the critical mistakes I made last year that could have been avoided?
  1. How can I avoid these mistakes in the most cost-effective way?  
  1. What can I do to analyze my financials better so I can spot these discrepancies on my own?  
  1. Is there anything you noticed about my business that could be improved?  

By asking these questions, you're already closer to unlocking more value from your accountant than a simple year-end conversation predicated on historical analysis. So now that you're more prepared to analyze your business better let's look at the next step.  

Be prepared for the year-end conversation.

Equipped with the right answers to the questions you asked above, you can now approach the year-end conversation with a new frame of mind. First, before you hop onto your year-end call, make sure your accountant has sent you the financial statements for your business and that you've already analyzed them. This way, you can quickly turn the conversation with your accountant forward, which is the objective we’re seeking to achieve. By completing the steps we've outlined, you'll be in a better position to change the frame of reference you approach the year-end conversation with. You'll also outline new operating parameters with your accountant, switching to one where advice and forecasting become part of the regular conversation.  

If you're looking for a flexible accountant who can offer this type of conversation for your SMB, talk with us. Within our service offering, we offer tax optimization which will ensure you never forget potential tax credits or key pieces of advice that can help your business.  

Alexandre Ouellet, Copywriter/Rédacteur

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