Running A Successful Contracting Business: are you asking the right questions of your financial advisor?

This article was previously published in Truck Logger BC Magazine Fall 2018 issue.

Historically, an accountant was thought of as a math whiz who sat at a desk all day and pumped out tax returns. Usually these folks were very comfortable talking about what went on last year with a client's business but far less comfortable talking about the future goals and objectives of their clients. However, times have changed over the past few decades and accountants have had to adapt to the way they do business and become forward looking advisors.

As a client it is your duty to ask the right questions of your accountant to ensure they are forward thinking and focusing on the right parts of your business. You need to ensure they can cover off your tax compliance and financial reporting, but truly successful businesses draw far more value from their accountant than a set of financial statements. Here are some areas to focus on with your accountant next time you meet.

Experience

Ask about their experience in the industry, do they know the difference between a buncher and a processor? Can they tell you the steps from stump to dump? The more in tune your advisor is with the industry the better they will be able to serve you and your needs.

How much time will you focus on my business and how often can we meet?

Good accountants will have lots of clients, but they should always have time for the forward-looking clients that want to meet regularly to go over where the business is headed and how to get there. Time to come out and see you to discuss your plans.

If you were in my shoes what would you do differently?

Accountants assist business owners in a variety of businesses and are a wealth of knowledge to tap into when looking for insights on how different styles and approaches could help you in your business. You can learn a lot from your accountant if they are willing to give no holds barred business advise. They may be also able to connect you to new suppliers or customers via connections they have.

Is there anything I can do to make you do a better job?

Accountants enjoy working with clients who are well organized and on time. By asking this question you are ensuring your records are presented in a method that helps your accountant and allows them to focus on the big picture rather than getting bogged down in a shoebox full of information.

How can this tax season be better than the last season?

Ask these three questions:

1. What tax changes effect my business this year?
2. Is there anything else I can do to minimize my taxes?
3. Is there anything I could have done better last year?

Are there any industry-specific tax changes I should know about this year?

An accountant who understands your industry should be able to answer this easily and a truly proactive accountant will have been in contact with you throughout the year with any changes that may impact you.

Is there a business structure that could work better?

As a business grows, how it should be structured may change over time. A trusted business advisor should proactively address this but it is always good to ask the question. Depending on the stage of your business life cycle, some structures minimize tax, some help with liability protection and others help when winding a business down or selling. Asking this question too late could cost you.

Am I taking money from my business in the most tax-efficient manner?

Your accountant should be able to help you to minimize the tax on funds you take out of your business. There are more ways than just dividend or salary these days depending on the amounts you draw from you company. Ask you accountant if you have needs for large amounts of funds from your company.

How am I going to get out?

As time goes on, this becomes one of the greatest concerns of business owners and often times accountants fail to address the issue head on. You should be discussing this with your accountant from day one. You never know when the day will come that it is time to hang up the hard hat and boots and find a beach somewhere. By planning ahead, you can ensure this is done with as few headaches—and as tax efficiently--as possible.

Your accountant can be your most trusted business advisor and an integral part of your team; not just someone you go to visit once a year to go over your tax returns and financial statements. By having a strong business relationship with your advisor, you will maximize the advice you get and the benefit to your business will be substantial. It's equally important to choose an accountant whose values align with yours and someone who will always deliver you the truth no matter how tough it is to hear. By choosing wisely and acting on good solid advice, you and your business can reap the rewards.

Chris Duncan, CPA, CA is a Partner and the Regional Leader of MNP's Forestry and Forest Products Services group. Serving clients across Vancouver Island, Chris draws on his unique background to deliver industry-specific advice to help business owners stay in compliance, make informed decisions and achieve their goals.