Is your accountant on board with your five year plan?
Do you have a five year plan? is it just a vague thing, or do you actually have it written out somewhere? And if you have written it out, have you gotten buy-in from one of the most important people in your financial life—your accountant?
Well, have you? I’m not talking have you showed it to him. Have you sat down and talked with your accountant about where you envision your company in 5 years? or, better yet, has your accountant sat down and talked with you about this? Once you guys are on the same boat, and the boat is sailing, where you are steering that is a really important conversation to have with your accountant, your financial advisor.
Yes, accountants can do a stellar job of just keeping the business trucking along at its same pace, even with some year over year improvements, just fine, hunky dory. But without a bigger-picture goal in mind, we get lost in those little details. Keeping that in focus, and checking back in that the big picture is on track is important to the business.
Let’s say you are in manufacturing. You put together a five year plan to be ready to build a new factory. You want shiny new factory robots to make shiny new widgets and whatsits and it will be more efficient than your old plant, make twice the widgets and whatsits with the same number of employees. If you get buy-in from your accountant, if they are part of the team drawing up the plans for that, they can tell you, well, you will probably need about this much money to make it all happen. Let’s say you need a million dollars to show the bank you’re serious and you can borrow some to finish out your financing. To make it easier, the accountant says you need to save $200,ooo a year, a fifth of the cost. You need to set that aside rather than to hand it out as bonuses or stock options. You can put it in bonds or you can loan it out to other companies but you put the money aside and don’t spend it on operations. Easy peasey, because you talked with your accountant, and they told you they were on board and you all made a plan.
