Loading...
quote | Keys to Successful Borrowing: The Importance of a Great Accountants

Having your financial statements periodically reviewed and updated by a great accountant is an investment that will pay off in a couple of ways. 

This is the third in a series of articles on using short-term loans to help small businesses succeed

For a moment, think of the finance community who’s there to support your small business as an ecosystem.  In that ecosystem, you have your bank, you might have a short-term lender, and if you’ve grown your business to a certain point, you might have some administrative staff – people issuing and collecting invoices, and doing your basic bookkeeping.  If your business is smaller, those tasks may even be done in whole or in part by your own self.

I’d suggest you make sure you have one other partner in your ecosystem, that being a good (or hopefully great) accountant.  Having a great accountant is much like having a great dentist.  You may not love going to see them, it’s never as bad going to see them as you think, and they’re invaluable to your personal or business health.  You can get away without visiting either one, but in the end, not going to see them always catches up to you.

Having your financial statements periodically reviewed and updated by a great accountant is an investment that will pay off in a couple of ways.

Keys to Successful Borrowing: The Importance of a Great Accountants

The first payoff of a great accountant

A great accountant force you to do things you might not want to do, but that you should do – complete inventory counts on time, measure what your real cost of sales is, and help you determine if you’re operating profitably. They’ll also help you keep up to date on all your statutory filings, so you don’t fall behind, or if you do, at least you’ll know with certainty as to by how much.  They may even be able to offer you advise on critical items such as how to compensate yourself effectively for tax purposes, and other items. It’s quite possible, and even probable, that they’ll pay for themselves many times over.

The second payoff of a great accountant

By doing all the items outlined above, you’ll be able to provide your bank with reliable information.  There’s an additional level of comfort added to reviewing financials that aren’t simply printed out of one of the usual accounting packages.  Lenders look for items to be in their right categories…to know exactly what they’re looking at.  Lenders try to determine if you’re profitable.  They do this to determine what amount, if any, they can lend to your business and still sleep at night.  Finally, they’re trying to determine if you did with the last loan they provided you what you said you’d do.  In other words, a great accountant can not only help you manage your business, but can help you build an additional layer of trust that’s critical in accessing additional capital from your primary lender, and other lenders, including those in the alternative category, equipment finance companies, and more.

So why do we say find a great accountant as opposed to simply a good one or a good bookkeeper? 

quote | Keys to Successful Borrowing: The Importance of a Great Accountants

The balance sheet doesn’t balance.  Columns on the statements don’t add up.  The list goes on, and on, and on.

It comes down to a couple of things. A bookkeeper may be ok to help you get up and running, basic organization, etc.  But as you move along in growing your business, people like us (lenders, alternative lenders, and equipment finance companies), just like the banks, need to see the information we think we can rely on.  We can’t possibly know the name of every good (or bad) bookkeeper.  But for the most part, we can rely on the professional designations of the accounting profession. Almost every day we receive an application for a loan with financial statements attached that, from our perspective, makes no sense. Things are miscategorized. We see inventory counts aren’t complete. Some numbers don’t change as they should from period to period. Different typesets are mysteriously used on the same document, indicating hidden spreadsheet rows or columns. The calculation of the cost of sales, depreciation, or other items doesn’t make sense.  The balance sheet doesn’t balance.  Columns on the statements don’t add up.  The list goes on, and on, and on.

We’re flexible in our reviews of financial statements – we have the discretion to call and talk to clients and make judgements in certain ways, and allow for some forgiveness.  However, not all institutions can, or will, make decisions that way. If you do get some flexibility in that regard, the expectation will be that you have better financial reporting in the future – thus you’ll need a great accountant.  You’ll need the better reporting to access greater amounts of capital, on terms that are the most favorable to you.  In that way alone, a great accountant will pay for themselves time and time again.

Read about the first blog post in the series: Keys to Successful Borrowing: The Importance of Borrowing the Right Amount

Read about the second blog post in the series: Keys to Successful Borrowing: The Importance of Financial Strategy

At Accord Small Business Finance, we’re always happy to speak to you about your needs. Check out our website for ways to talk to us – online chatemail, website form. We’re also happy to call or Skype.

2018-12-07T12:49:53+00:00

Start growing your business now with Accord Small Business Finance!

Apply Now!

Start growing your business now with Accord Small Business Finance!

Apply Now!

We’re happy to help!

Contact Us

Have a question about business financing? We’re happy to help

Learn More

We’re happy to help!

Contact Us

Have a question about business financing? We’re happy to help

Learn More
Apply for a small business loan Now!