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    5 Steps Every Small Business Owner Should Take to Make Their Accountant’s Life Easier

    Posted by Sylvia Lagerquist, CPA

    5 Steps Every Small Business Owner Should Take to Make Their Accountant’s Life Easier

    Accounting is technical, complex, and time-consuming. It’s also essential to the day-to-day life of your small business. As a result, your business needs to have effective accounting if it is to survive. 

    The only question is who is going to do it — you, a member of your team, or a hired accounting or bookkeeping partner such as your CPA firm.

    In answering that question, more and more small businesses are choosing to invest in an outsourcing approach and hiring an accounting firm to manage not only their taxes, but often their bookkeeping and payroll as well.

    It would seem logical that making outsourced accounting work would require the client to be well prepared so that the accountant can get the job done efficiently and accurately on their behalf. But in many cases, small businesses are so disorganized operationally that they hire an accountant, in part, precisely because they’re not ready to manage any of their accounting effectively, and wouldn’t even know where to start.

    Since panic is a poor basis for making any business decision, it’s worth recognizing that there are some things nearly every small business owner can do to prepare for a successful partnership with their accountant.

    Whether you’re just starting the search for an accounting provider or are well established using this model, it’s important to consider these five steps that you can take right away to make your accountant’s life easier…and your accounting results more successful.

    Step 1: Separate the Business from the Owner

    Many small businesses begin operating as little more than a checking account and a bootstrap budget matched with the owner’s vision and ideas. A person who operates a business that is not registered as such is, by default, running a sole proprietorship. That means, in simple terms, that the business and the owner are one: one business, one tax return (yours), one simple decision.

    It also means you have no protection from creditors, no legal standing as a business outside yourself as the owner, and no tax benefits from operating as a corporation. That’s why one of your first steps should be to incorporate a legal business entity.

    Note: For articles on our blog about business entity selection, please visit:

    Step 2: Choose and Use Accounting Software

    It may seem obvious in this day and age that a business should run on technology, but nonetheless shoeboxes filled with receipts, drawers stuffed with invoices and bank statements covered in scribbled notes still abound. Some business owners never actually get around to purchasing accounting software, while others run to Staples, pick up a copy of one accounting application or another, but never actually start using it.

    No matter how small your business, it needs to be run on software that you purchase or subscribe to online, implement and actually use every day. If you have this in hand, great job! If not, the first step is to talk with your CPA today so they can not only recommend the best software options, but also guide you through the implementation as well.

    Note: Learn more on how to select accounting software in this article:

    Step 3: Track Your Expenses

    Expenses are as critical to your business as the customer checks you deposit as payments for your products or services. The key here is to keep your receipts, record your activities, enter the information in your accounting software, and scan records so you can keep them filed electronically.

    Your accountant can help you with each of these steps, and third-party online services such as Shoeboxed ( or Expensify ( can assist you in overcoming the hassle of scanning, tracking and recording expense activities.

    In addition, if you reliably use a corporate credit card or ATM/debit card for business purchases, this may provide you with the level of clarity and reporting accuracy desired as well, while reducing the burden of tracking and scanning every receipt.

    Keep in mind these particularly common expenses that most small business owners should diligently track:

    • Business meals and entertainment
    • Business travel out of town
    • Vehicle related mileage and expenses
    • Gifts given as part of the business relationship
    • Home office investments and expenses

    These expenses are particularly important to track accurately in order to meet the strict standards set by the IRS and to ensure that you are maintaining contemporary records.

    Note: Learn more about managing small business expenses in this article:

    Step 4: Have Tax Documents Ready Ahead of Tax Season

    Accountants are experts at dealing with tax season, and they know all of the in’s and out’s of preparing their clients for success with each year’s filings, for both your business and for you personally.

    However, there’s one thing they can’t do: prepare your taxes without information. That’s why your accountant will be tickled pink (and optimally positioned to help you file early and accurately) if you are organized even before the tax organizer arrives in the mail (or email). In particular, keep these reports and documents handy:

    • Accountant’s copy of the data file from your accounting software or online service
    • Financial statements (balance sheet, income statement and cash flow statement)
    • Capital asset activity report (purchase, sale or disposal of any capital assets)
    • Car and travel expense reports and mileage log
    • Summary of home office expenses
    • Form 1098 for mortgage interest and property taxes
    • Form 1099 for interest, dividends and stock sales
    • Form K-1 from pass-through entities

    If your accountant is also managing your bookkeeping and other regular accounting functions on your behalf, they may be taking care of this for you. Nonetheless, you and your accountant should plan to meet and review these documents well ahead of filing deadlines.

    Step 5: Take Deadlines Seriously

    When your accountant communicates to you about filing deadlines, just taking those deadlines seriously and committing to being ready at or before the dates provided, will go a long way toward setting you up for success. Don’t treat your accounting and taxes like a trip to the dentist — dreaded, delayed and assiduously avoided.

    Remember, your accountant can’t help you (or be ready and equipped for any challenges or surprises) if you don’t give them the time they need to do their job successfully. A deadline from your accountant is as important as the date you cut vendor checks or the day you run the payroll. Treat it as such.

    Consider how taking just these five steps can really have a dramatic impact on your accountant’s ability to help your small business, by giving them the time, information and support they need to look out for your best interests today.

    In addition, your CPA may be particularly adept at assisting you in setting up and configuring your overall accounting system – the processes, procedures and internal controls necessary to ensure success.

    Note: To learn more, visit our detailed overview of services from Haines & Lagerquist CPAs here:

    Selected Sources:


    Image Credit: eerin (Flickr @ Creative Commons)

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