Click to Print

Why You Need an Accountant

Our startup expert explains how to work with one of the new professionals in your business life.
June 3, 2002
URL: http://www.entrepreneur.com/article/52324

Q: Should I hire an accountant? Also, how can I make the most of this business relationship?

A: One aspect of running a small business that few people give a lot of thought to is the way they deal with professional vendors such as bankers, lawyers, accountants and so on. Most entrepreneurs just dive right into their businesses without giving a second thought to how these professionals should be treated, what they can do for you and what they in turn look for in clients. With a little thought and effort, you can ensure that you get the most from these relationships.

The main thing to remember is that you need a personal relationship with each of these people. They have the ability-sometimes direct, sometimes indirect-to drastically influence the success of your business. Your goal should be to develop a long-term, personal relationship with each of them. If you do that, when you hit a bump in the road, they'll be there to help you get over it.

As you become more experienced, you'll find that your accountant and attorney will overlap a bit in their services and expertise. I've found that mine often work together to achieve what I'm trying to do. That being said, here are a few examples of services your accountant should provide:

You will also need an accountant if you have questions about what kinds of business expenses are deductible. Most of these rules and regulations are moving targets-they change frequently and often vary from state to state. A good accountant will always be on top of the changing laws and regulations and, more importantly, will know what applies to you.

It's also important to ask your accountant's advice before you take action. It's almost always easier (and cheaper) to structure things properly upfront, as opposed to trying to fix something later.

I've noted in previous columns concerning your banker and attorney how important it is to develop close relationships with them, make sure they completely understand your business and your goals for it, and trust them to help you attain those goals. This advice applies to your accountant as well-if you take that advice, he or she will be a valuable long-term partner.

Keith Lowe is an experienced entrepreneur who is a founder and investor in companies in several industries. Lowe also mentors new entrepreneurs; serves as past chairman of the board for Biztech, a nonprofit high-tech business incubator; and is a co-founder and officer for the Alabama Information Technology Association.


The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.