Engaging small business accounting services allows you to keep your bookkeeping up to date without it taking over all your time. You are an entrepreneur after all, you have a lot on your plate.
When it comes to an accounting service, you’re not only hiring someone to balance your books but an expert who will provide proactive business coaching that helps you grow your business. You have access to a money nerd who loves to crunch numbers but also look for ways to keep your business efficient.
A business CPA should be a resource able to answer your accounting questions. But as an entrepreneur, you should be empowered to ask these questions yourself to best be able to work with your accountant to find the financial answers your business needs. And by working together and asking these questions on a monthly basis, you’ll be able to make real-time decisions on the financial needs of your business.
Here are 8 monthly accounting questions you should ask yourself and your CPA/ business mentor to keep your business financials healthy and growing.
1. How’s my company’s health looking?
You and your CPA/ business mentor should be looking for signs of trouble AND opportunity. Review your financial statements with your accountant monthly for overall company health. Look for numbers that you should be concerned about, but also look for insights into the money available to invest in growth. They’ll see where you might be better off to reduce inventory because products are sitting too long on the shelf, or when the timing is right to take on another team member. They’re able to provide small business coaching and have your best interests at heart.
2. Can I quit my day job yet?
This only applies if you’re in the early days of starting your business. While some entrepreneurs pursue a business idea as a side gig, more are interested in the chance to quit their day job and go full-time for their own business. Your accountant can offer advice on when the time looks right to make the change. A second set of eyes will help take the emotion out of the decision and allow you to move ahead by trusting the numbers. They’ll work with you to create financial projections to help forecast how revenues will look so you can reduce the risk of losing a steady income.
3. How’s my debt repayment going?
Most entrepreneurs are working with some form of debt to cover operating costs when they startup. If you know you’re carrying debt, speak to your CPA/ business mentor to see how your debt repayment is coming and if there’s an opportunity to reduce debt, or seek further investment to expand your business.
4. How should I finance my business?
If you’re looking to expand, or have taken on too much debt, your CPA/business mentor can offer insight into where you can find more money. Whether it’s taking on more debt, digging into your equity, or even dipping into your personal savings, they can assess the best way to finance your business needs. They’ll review the pros and cons and steer you in the right direction while helping you avoid major mistakes.
5. Are there any economic changes I should know about?
CPAs/business mentors keep their eyes on the economy, in general, to look for changes that might affect their clients. New tax rules, changes to interest rates, or something more specific to your business such as a rise or drop in commodities you depend on to produce your products are all things they might have an inside scoop on. If you track these things on your own, you can get more specific with your questions to find out how economic changes impact your business.
6. How can I manage my cash flow better?
If your business seems to change month to month as most will, insight into cash flow management is a must. Your goal is to keep a positive cash flow as it keeps your company healthy and promotes growth. Your small business CPA can help analyze problems to find areas where you can improve. They can also spot trends that you can use to your advantage.
7. Are there changes I can make to help my business?
You’re so involved in the day-to-day operations, it can be hard to come up for air. Your CPA/ business mentor can provide business coaching, as they’ll have intimate knowledge of your business. They can analyze financial data to help you find ways to improve each month. The accountability, along with teaching you the right financial habits, an accounting coach can provide just what you need to keep you on track to meet your financial goals.
8. How do things compare to last year?
You’re going to see monthly fluctuations in your balance sheets and income statements. These fluctuations should not only be tracked month to month but year over year. Your accountant can make comparisons to track your performance over time. You can get a view of not just the current period, but spot increases or decreases compared to prior years. This helps you spot trends such as seasonal fluctuations that can help you manage inventory wisely and avoid costly errors.
These questions help you build a stronger, more productive relationship with your financials and your accountant. You’ll have a bigger picture of your financial health so you can plan your growth more effectively, in real-time not just at tax time.
Is accounting coaching right for your business? Learn more about our Business Compass Program and how we at Tolbert CPA can help you build the habits and knowledge to interact with your financials all year long to create a stronger business. Schedule a Free 30-minute Introductory Call today to learn more.
Visit our Entrepreneur’s Guide to Accounting to read more valuable articles like this one.