Why You Need a Financial Professional, and How to Choose One
4 min read
May 19, 2015 • Block Advisors
If you take on a home improvement project and you make a serious mistake, you’ll either have to read the instructions again, make more trips to the hardware store, or call in the contractor who you should have hired in the first place.
If you’re handling your company’s financial accounting and you make a serious mistake, it may be necessary to jump to the third option right away. But it’s not always easy to correct bookkeeping errors, and finding a reputable professional who can jump in immediately and troubleshoot will be difficult. You may have to wait.
In the meantime, your bills aren’t being paid and no invoices or orders are going out. Your customers and suppliers are calling and your cash flow is tanking.
An Ounce of Prevention Is Worth a Pound of Cure
It may be an overused adage, but it’s so true. And it illustrates the first, most compelling reason why your small business should retain the services of a financial professional. If you tangle up your records, you’re going to need them fixed, and fast.
Even if you’re using an accounting application that has safeguards built in to help prevent mistakes, you can still do a lot of damage to your company file. Accounting software and websites make it much easier to create records and transactions and reports, shielding you from the arcane rules of double-entry bookkeeping. But if you don’t understand the basic tenets, it’s easy to bury a mistake so deep that it’s impossible for you to find.
Skilled accountants can evaluate your bookkeeping procedures and find any flaws that are lurking. They’ll learn about your business structure and needs, and suggest ways to proceed that may simplify your financial tasks – and will surely improve the accuracy of your books. Then if you do something that compromises that accuracy, they’ll know enough about you that they’ll be able to fix it much quicker than a stranger would.
Technology, Taxes, and Trouble
Today’s best accounting professionals keep up with technological change. They know what works and what doesn’t, what makes sense and what may be a waste of time and money. They can suggest tools that would benefit you, and they can teach you how to use them.
Using today’s best small business accounting applications, a savvy financial advisor can create and analyze complex reports.
Maybe you’ve always thought of accountant as professional tax preparers that you visit once a year. Some are so much more than that. They can:
- Consult with you throughout the year, helping you understand the impact that your business decisions will have on your income tax obligations.
- Monitor your bookkeeping, looking for both mechanical errors and numbers that don’t seem right.
- Run standard financial reports monthly or quarterly that you might have trouble creating and analyzing.
Not Just “Good Enough”
Accountants get a great deal of help handling the mechanics of accounting from today’s technology tools. No more calculators and paper ledgers and overflowing file folders.
So what do they do with that extra time? Some try to cram their schedules with as many clients as possible. Others realize that they now have the luxury of being more than someone who knows how to punch numbers into a tax return and oversee bookkeeping procedures.
The latter group describes today’s state-of-the-art accountants. They’ve become financial advisors. They know their clients’ businesses so well that they can provide informed, insightful input when decisions must be made. They’re still very much involved in the tasks that they’ve always performed, but they also advise companies on technology and finance. Some assist in the creation of smart business plans. Provide feedback on goals. Help procure funding.
It’s not that difficult to find these enterprising professionals. Get recommendations. Browse their websites and blogs and social media sites. Look at their lists of services, at the business problems they’re offering to solve (extra points if they share some of their knowledge free online in FAQs, articles, ebooks, etc.). Run the names that are on your short list through a search engine.
Many financial professionals offer a free consultation. Take advantage of this if you can. You can get a sense of the person or people behind the company logo. Remember that the firm you select may have a great deal of impact on your company’s growth and success.
Every accounting professional knows numbers. You want one who’s interested in the same thing you are: making the best decisions for your company’s future.
If your accountant isn’t providing information that helps you make business decisions, it may be time to move on.