Financial metrics can help you make strategic decisions that could mean the difference between great success and dismal failure. A Certified Public Accountant (CPA) is someone who is knowledgeable and proactive and can compile and analyze these numbers. Louise Bartley, CPA, at Coale, Pripstein & Associates, in Columbia, Md., discusses the role of the CPA in a small business.

Active, Not Passive

Your CPA should be “constantly looking for ways you can run your business better — whether that means training the bookkeeper to be more efficient, helping you determine the best way to handle the finances for a large purchase, advising you on the trends they see in your business, helping you improve financial management skills or, yes, advising you on how to reduce the taxes you will pay,” Bartley says.

CPAs who are engaged specifically for taxes should be proactive throughout the year checking quarterly for tax planning and showing you how decisions you make now will affect your tax payments. “Insist on regular reviews with a specific discussion about taxes,” Bartley recommends.

Value Added

As a business adviser, a CPA also may provide advice on how to reverse downward trends, implement internal controls, or review your entire accounting system.

“Sometimes we help the owner see that they’re being too generous with certain benefits — paying for far more than is the norm,” Bartley says. “We’re more than happy to play the heavy on issues like this if it will help the owner and the business be successful. Plus,” Bartley adds, “your CPA should be able to introduce you to bankers who may specialize in your type of business. They typically have relationships with various banks ... that would help you with particular needs.”

Finding a CPA

Bartley advises: “Take your time and ask other successful businesspeople for recommendations. Then ask around about anyone you’re considering. Often CPAs that may seem expensive now will pay for themselves 10 times over with the help they provide.”

Lastly, Bartley says, “Remember that you are ultimately in charge. Don’t rely on your CPA or anyone else to assume the responsibility of understanding your financial information. You need to learn to be the financial manager of the company yourself.”

—Victoria Downing is president of Remodelers Advantage, helping remodelers across North America build strong, profitable businesses. 301.490.5620.

Specific Areas of Review Include:

  • Collections. Are you staying on top of collections and if not, why not?
  • Bookkeeping. Is the bookkeeper using technology efficiently? Are there simple processes that could be introduced to cut down on repetitive tasks?
  • Payroll. Is it done internally or by an outside resource? Does the way you’re handling payroll make sense for your business?
  • Purchase discount. Are you paying your bills so that you capture every discount that’s available?