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Questions You Need To Ask Your Accountant

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7 important questions to ask your accountant

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Page 1: Questions You Need To Ask Your Accountant

Questions You Need To Ask Your Accountant

(1) What’s the best way to contact you and how

often should we be in touch?

This might seem like too simple a question, butclear, effective and frequent communication is thekey to a healthy, beneficial relationship with youraccountant. Establish early on how often you’llconnect, either in person, on the phone or online(via a video chat app like Skype, Google Hangoutsor Facetime). Decide together if you’ll meetweekly, monthly or bimonthly.

Page 2: Questions You Need To Ask Your Accountant

Questions You Need To Ask Your Accountant

(2) How can you help me prepare for (and survive) tax season?

Untangling the time-sucking tedium of tax prep is often the numberone reason small businesses hire an accountant in the first place.You’ll want to ask yours which tax credits and deductions you shouldclaim. Also ask him or her if there are any new tax laws you shouldtake advantage of to maximize write-offs.

“Tax opportunities, such as the R&D credit, accelerated depreciationor panoply of state and local tax opportunities, including taxforgiveness and outright grants or refundable credits, can even beapplied for as part of the tax return process,” Katz says.

He suggests that you get answers to all of your tax questions longbefore the April 15 filing deadline. To avoid the year-end rush, getyour accountant involved in helping you gather all of the necessaryaccounting documents and data all throughout year.

Page 3: Questions You Need To Ask Your Accountant

Questions You Need To Ask Your Accountant

(3) How can you help me clamp down on my cash flow?

Properly projecting your business’s cash flow is asessential as creating an effective mission statement andliving up to it. Tedious, detailed flow projections aren’teasy to wrangle, but that’s what you have an accountantfor.

Your accountant should be able to help you develop anorganized, effective cash flow model that allows you toadjust your operations in ways that help you surviveshortfalls, as well as improve receivables and managepayables.

Page 4: Questions You Need To Ask Your Accountant

Questions You Need To Ask Your Accountant

(4) What is my break-even point?

Your account should be able to analyze a numberof metrics to calculate whether your business ismaking a profit or a loss. Knowing your break-

evenpoint is crucial to determining your business’spricing structure and profitability. Once youraccountant helps you identify yours, you shouldhave a strong estimate of how many products orhours of service you have to sell to cover yourcosts.

Page 5: Questions You Need To Ask Your Accountant

Questions You Need To Ask Your Accountant

(5) Can you assess the overall value of my business?

Your accountant should be up to the task of estimating yourcompany’s fair market value in excess of your tangible assets. He orshe should start by examining your financial plan and then execute

adiscounted cash flow (DCF) analysis, a common but effective valuation method.

Another way your accountant can help nail down your business’svalue is by deeply understanding what you do and the industry inwhich you operate, Katz says. “In so doing, an accountant can helpthe entrepreneur understand which aspects of the comparablecompanies drive their value, and can work with the entrepreneur tosteer the company toward maximizing those aspects of theirbusiness.”

Page 6: Questions You Need To Ask Your Accountant

Questions You Need To Ask Your Accountant

(6) Can you help me review and negotiatebusiness contracts before I sign them?

This is a common question for accountants, onethat’s probably better to ask your attorney.

“An accountant should not practice law withouta license,” Katz says. “They can workcollaboratively with your attorney to add colorand tax and commercial issues about which theattorney may not be experienced.”

Page 7: Questions You Need To Ask Your Accountant

Questions You Need To Ask Your Accountant

(7) What are some special considerations for my

particular industry?

Businesses in different industries come with theirown unique accounting issues. Your accountantshould be knowledgeable about the various onesthat specifically apply to yours.

For instance, if you own a startup that buildswearable tech, your CPA should be well-versed atidentifying tax opportunities specific to theemerging technology industry, like potential