Jun 07, 2017

For Small Businesses, Know the Importance of Your CPA Relationship

Mark L. Sullivan, CPABy Mark L. Sullivan, CPA

MoneyLife100Establishing a trusting relationship with your business partners is essential. For small-business owners, this trust can be helpful to the bottom line. It is important that the advisers you work with understand your business and your current and future plans. What are your goals? Is it a family business or are there partners? Is this a first-generation company with plans to sell, or is the goal to preserve it for future generations?

When it comes to banking, it is often understood among small businesses that it is necessary to have a strong relationship and an accessible contact for several reasons. Your banker can help you reduce bank fees and interest rates, and provide mercantile solutions specific to your organization. The smallest adjustments to your account balances or placement of those accounts can reduce fees or increase interest rate returns on your money.

Similarly, having a go-to attorney is accepted practice for many. As a small business, you will not have a legal department. Consultations are often needed regarding employment agreements, contracts, or business arrangements. A personal relationship with an attorney can provide open and honest assessments of your situation.

Meeting with a Business AdviserSo why not have a strong and established relationship with a CPA? Most business owners understand that they need an accountant for their business, but many do not realize the full benefits of an active relationship with their CPA. CPAs can provide a network of useful adviser relationships. They work with bankers, investors, insurance companies, attorneys, and other CPA specialists. This relationship, in fact, may be the most crucial because a good CPA will understand your business and its needs. Their assessment of industry trends, market movement, entity structure, succession planning, business valuations, and tax situations create a necessity. If you are looking into a line of credit or business loan, the financial reporting required by banks will require an independent financial statement from an accounting firm. CPA firms can also provide tax preparation and, in the unfortunate occurrence of an IRS audit, are able to represent your company. A strong personal relationship with a CPA will provide proper guidance in structuring your company for your goals, whether it is a sale or succession planning to future generations.

In a small-business environment, many pieces are needed to succeed. The extra time spent developing relationships with your trusted advisers, particularly CPAs, can lead to successful planning for yourself, your family, and your company.

Mark Sullivan, CPA, is the controller at K&I Sheet Metal Inc. in Pittsburgh, Pa. He is an active member of the PICPA and serves on the CPA Image Enhancement Committee.

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  • David Norriss | Jan 14, 2020
    I think it's cool how you specified that a CPA will understand the needs of a small business and give them a network of helpful advisor relationships. I imagine that starting a small business is difficult and hard to manage on your own. Having not only the help from a CPA but also all the other connected people that come with them is a huge reason to hire one.

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    Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.