Don't get me wrong: accountants are great at, well, accounting.
Every business should have an accountant in reach to ensure they are organized in counting their cash and being ready for tax season. By all means, use your accountant for what they're best at.
That being said, don't let your accountant determine how you run your business.
When you let an accountant into your business, they're often going to structure as much as they can in a format that helps them do their job. This might include structuring your P&L (Profit and Loss Statement) to shape your payroll, income, and expense numbers in a way that helps them the most.
One example is putting service salaries in payroll—NO! They are a Cost of Goods Sold or services rendered; they need to be above the line. But in general accounting, it’s just easier and faster to put all payroll together. Well, that’s not the best for an MSP trying to figure out your service delivery cost. So, what is more important?
Of course, as CPAs, this makes sense. They want things to be organized as best they can to ensure they can quickly gather the needed information and deliver their results as fast as possible.
While this can help them do their jobs, these accounting structures can often make it more challenging to manage the best numbers for your business.
Don't let the accountant define this for you. Instead, make sure everything you have is structured in a manner that helps you and your business run as smoothly as you can, despite what might be helpful to the accountant.
Out of respect to the accountant, it's natural that you may want to defer to their preferences. However, this is the wrong move, as you must be responsible for the P&L and use it year-round. You also have to make sure you use it properly.
Can this make a CPA's job a little more challenging? Maybe, but frankly, it doesn't matter. No matter how you organize your accounts and information, CPAs are trained, skilled professionals who will still manage to get their job done. What's most important is that you have your business structured in a way that helps you run your business to the best of your abilities.
Need help organizing your finances in the best way possible? Check out our Financial Consulting.
