End of the Year Planning: Is Your CPA Asking the Right Questions?

The fourth quarter is typically a slower time for most business owners. That makes it a great time to focus on what Stephen Covey called “important, but not urgent” tasks. Andrea Bone, CPA, founder and CEO of Accounting and Business Partners, says she schedules end of the year meetings with her clients to take a look back at the business – and a look forward.

“The reason we call ourselves Accounting and Business Partners is that we act as a partner to the business and to the business owner” she says. “Most professionals don’t ask questions that are outside their expertise or outside the tax preparation process

That’s what makes us different. We take on the role of controller, a position most small companies can’t afford to hire. We look at the business holistically and ask questions to help the owner plan for tax season – and for the health of the business overall.”

Bone says the fourth quarter is an important planning period for taxes, but it’s also the time to plan for the coming year. “Once January 2nd comes around, it’s too late,” she says. “It’s full steam ahead, and owners get too busy to sit down and plan.”

Bone starts with a series of questions about the owner’s business strategy for the new year. Has the exit strategy or timeline changed? Do they need to make a major equipment purchase? Are they contemplating an acquisition? Will they be hiring new staff?

Bone always starts with the owner’s financial situation; “Put on your own oxygen mask first,” she says. “We ask questions about financial wellbeing and preparation. Do you have an updated will? Has the value of your assets changed over the past year? Are you insured at the right level of coverage? Do you have health insurance? We think of all the things the owner is too busy running the company to think about.”

Next, she’ll  discuss retirement plans. With her client, she’ll look at the retirement timeline, financial needs, current and future value of their assets, and their personal budget. Do they have enough to provide what they need to live on after they leave the business? Do they need to make adjustments in earning, spending, or investing to meet their goals?

The answers to these questions will help form the owner’s investment strategy. “We’ll create a couple of plans based on the owner’s goals,” Bone says. “IRAs, Self-employed pension plans, or perhaps a 401K plan with profit-sharing options. We’ll take a look at where the financials will end up this year, and project what they’ll look like in the coming year. That helps us create the tax strategy.”

“Some of our clients have very clear goals,” she says. “We have a husband and wife team who just quit their W-2 jobs to start an IT recruiting business. They want to do this work for ten years; then they’ll move to Colorado, start an animal sanctuary, and live off the grid. The husband might do some consulting or speaking, but they’ll definitely be done with 9 to 5 desk jobs.  When you have clarity, we can build a plan to make sure you have what you need to make your dream a reality.”

Once the plan is in place for the owners, Bone turns to the financial health of the business. Do they need to increase compensation or benefits for key staff to be able to retain them? Do they need to review (or create) their benefits plan, policies, or employee handbook? If they’ll be hiring more staff, do they need to make adjustments to their worker’s comp plan?

If they’re going to purchase equipment, Bone helps them understand their options for loans. If the business is going to need an infusion of capital for any purpose, getting the applications done early means they’ll be ready to go when they need to act.

“We have the expertise to look at costs and benefits and advise our clients on pitfalls they may not see coming,” says Bone. “It’s hard to know what you don’t know. One of my clients says being a business owner is like taking a test every day – one where the test questions are written in invisible ink.”

The last months of the year are an ideal time to plan for next year. Make sure you have a partner who can help you ask the right questions and help you find the right answers.

About Andrea Bone:

Andrea Bone is the Founder & CEO of Accounting & Business Partners. As a hands-on controller in multiple businesses of various sizes from 1995 to 2020, She has been responsible for everything for the “back office” operations. Her firm manages accounting, payroll, human resources, taxes, banking, insurance, and legal work. Her favorite part is working with business owner clients and seeing them achieve their goals.

Andrea holds a Bachelor of Science in Accounting degree from the University of Texas at Dallas, and a Masters degree in Business from Texas A&M University Corpus Christi. She is a Certified Public Accountant and has over 25 years of experience running businesses as a financial controller and CFO.