Important Questions You Should Ask Your Accountant

When it comes to your finances, whether they are personal or business related, you can quickly get in over your head without careful planning. Your accountant isn’t just a “numbers” person. You can think of them as a strategic partner. To get the most value, it starts with asking insightful questions. This post will guide you through the kind of conversations that can truly elevate your financial strategy. Our team at Flexkeeper can help steer you in the right direction.

Which Records Should I Keep And For How Long?

Good recordkeeping is the backbone of any sound financial strategy. To adjust or improve yearly goals, you have to first take a look at where you’re at. Your accountant can clarify exactly what documents you need to keep. Some examples could include everything from tax returns and bank statements to contracts and payroll records. Some of these could be saved for as little as three years or as long as seven. Don’t just guess. Ask an expert what documents you need to keep when tax season rolls around. This will give you a more proactive approach to knowing your bottom line. Consistently asking this question keeps your documentation tight, tax-ready, and audit-proof.

You should also think about how to manage them safely and efficiently. Should you go paperless, digitize, or do both? What naming system keeps things searchable? Are cloud backups or secure portals enough? These are all good questions to ask an expert.

How Can I Improve and Forecast My Cash Flow?

Business owners can often view cash flow as a “set it and forget it” thing, which could be a big mistake. It should be about getting ahead of the curve rather than feeling like you’re constantly behind. Your accountant should go beyond recording transactions and help you spot potential shortfalls before they’re problems. There are some good questions they can answer for you, such as:

What’s the health of your receivables vs. payables?
Are there frequent delays or seasonal dips?

A trusted accountant can help you build a proactive cash flow forecast that prepares you for slow months, planned investments, or even unexpected costs that you haven’t thought about previously. For example, imagine knowing in July you’ll need runway into October. That’s the difference between scrambling and strategizing. In summary, you’ll have a more accurate vision of how you can support your business with more detailed cash flow analysis.

Is My Business Structure Still Serving Me?

Choosing the right business structure can make a big difference in the long-term success of your company. Choosing between sole proprietorship, LLC, S-Corp, or beyond isn’t a one-time decision. It’s a strategic choice that can evolve as your business does. Let’s unpack why this question matters now more than ever.

The first thing you should consider is what your current business structure offers and what it might be costing you. A sole proprietorship may seem appealing because it’s easy and inexpensive to maintain. There’s no formal setup or annual filing, and you can report profits and losses directly on your personal tax return. However, this simplicity can come with unlimited personal liability. If your business runs into financial trouble or legal claims, your personal assets could be at risk. Sole proprietorships often encounter hurdles when seeking funding or gaining credibility with clients or lenders.

Transitioning to a Limited Liability Company (LLC) offers a protective shield for your personal assets. An LLC is a distinct legal entity, meaning it can own property, enter contracts, and incur debts independently of its owners. This separation provides liability protection. Did you know an LLC can also elect to be taxed as an S-Corp? This election allows the business to split income into salary and distributions, potentially reducing self-employment taxes. Choosing between an LLC and an S-Corp depends on various factors, including income levels and business goals. It’s good practice to consult with a tax professional to determine the most beneficial structure for your specific situation. Sometimes, you might not even be aware of the benefits or credits your business can qualify for. We’ll expand further on this more below.

Are There Tax Deductions Or Credits I’m Missing?

Tax benefits can quickly get forgotten about unless you have a professional who knows how to pinpoint what you qualify for. Here’s a breakdown of common opportunities:

Tax deductions:

Operating Expenses: Expenses that are ordinary and necessary for your business. Some examples could include, but are not limited to, rent, utilities, office supplies, employee wages, insurance premiums, advertising costs, or travel expenses.
Vehicle Expenses: If you use your vehicle for business purposes, you can deduct either the actual expenses.
Depreciation: The cost of business assets like equipment can depreciate over time. This allows you to deduct a portion of the asset’s cost each year.

Tax Credits:

Energy Efficiency Credits: Businesses that invest in energy-efficient equipment or renewable energy systems may qualify for various federal and state credits.
Small Employer Health Insurance Premiums Credit: If you provide health insurance to your employees, you may be eligible for a tax credit of up to 50% of the premiums paid.

If You Were In My Shoes, What Would You Do?

A trusted accountant can give advice and help steer you in the right direction for years to come. Asking them this question can serve as the big picture of what you want your business to accomplish. They can give insights on pricing tweaks or identify operational inefficiencies you might not even be aware of. Think of them as a strategic partner in growth opportunities.

Summarizing What An Accountant Can Do For You

A qualified accountant can be one of the most underrated aspects of making the most out of your personal or business needs.

Strategic Financial Planning: Accountants assist in setting long-term goals and developing strategies to achieve them, ensuring your personal and business finances stay on track.
Financial Health Monitoring: They provide regular financial reports and analyses, helping you understand your financial position and make informed decisions for both personal and business matters.
Risk Management: Accountants can advise on unforeseen financial pitfalls. These could be challenges they help intervene with before it becomes a much bigger problem.

Ready for Tailored, Results-Driven Accounting Support?

Choosing the right questions for your accountant is a great first step to financial empowerment, but choosing a good partner is a close second. Flexkeeper specializes in building proactive, client-first accounting relationships. Whether you’re looking to streamline your business operations or plan for retirement, a tax expert provides valuable insights tailored to your unique situation. Don’t let your financial success be left to chance. Schedule a consultation today to learn more about how our accounting services can benefit you.