Advice from my accountant on keeping solid books

By hook, crook and just a couple wine-infused late-night bookkeeping sessions, we managed to get all our tax info to our accountant by her mid-March deadline, so it’s been a huge relief to have that out of our hands as April 15 approaches. Having a fabulous accountant who we’ve worked with for years is a huge blessing — not to mention a valuable asset for anyone who’s self-employed.

We had a few false starts about 10 years ago: One accountant we tried, based on a recommendation from someone we knew, was just kind of creepy on a personal level. Both Turtle and I felt the heebies so we moved on after one tax season. The next one we tried seemed competent and pleasant enough, but the second year we used her she went unresponsive in March/April and sometime after April 15 finally contacted us via her secretary, with the message that she had a family emergency and had to file extensions for all her clients. Looking back, if the communications were better I could see being more forgiving (emergencies do happen), but when your accountant disappears and doesn’t return calls in the weeks before April 15 it’s just not cool.

Anyhoo, we love our fab accountant Jennifer Cantrell CPA. I recently remembered a great story she told me about the importance of your business’ books being in good shape. Of course you need to have your finances in order to avoid tax trouble, and to be able to manage your business effectively. But I hadn’t thought of this one:

“Many years ago, I had a client who purchased a small business. The seller admitted that his records were not very accurate and that he could not really prove up his sales figures or his expenses. We were able to negotiate a really low purchase price for my client, because the seller just couldn’t prove his information was accurate. My client paid $30,000 for the business, kept accurate records, ran it for seven years, and sold it for $1,000,000! There is no better example as to why keeping accurate records is important.”
— Jennifer Cantrell, CPA

You may not have any plans to sell your business, but if you do — or if you might consider it after several years — having solid books to document its value is essential. As is having a great accountant on your team. If you’re soft in either of these counts, do yourself a favor and (ahem) toughen up.