If taxes and death really are the only two certainties in life, then it sure makes sense to do as much as possible to limit any of their detrimental effects that you can.

So here we are going to look at ways you can help your accountant or CPA to be better prepared when tax return time comes around.

Completing your book keeping duties is rarely top of the list of the most enjoyable tasks performed during the course of running your business. But, come tax return time, a fully informed accountant or CPA is going to be your best friend.

Staying in touch with and thus keeping your accountant or CPA abreast of what is happening in your business has many advantages.

Whilst I can understand any business owner wanting to keep their accountant or CPA’s bills down to a minimum, it’s a force economy to not keep them up to date with any significant developments.

It makes sense that the more your accountant or CPA knows about your business the better position they are in to help and advise.

So what are the significant developments that you should keep your accountant or CPA informed of?

1. Any expected or actual changes in income.

Now this can be income increases or income decreases. If you launch or expect to launch a new product or range, that is noteworthy for your accountant or CPA. Closing down a branch or intention to work reduced hours is also worth sharing.

If your accountant or CPA knows about these planned changes before the event rather than after they can help plan the best way of carrying them out from any financial liabilities point of view.

Impact on cash flow, borrowing requirements, tax liability and many more areas are all best planned for rather than covered by in crisis management style, at the mast moment.

2. Any planned trading activity outside your own country.

In addition to the tax question again there is also the strong possibility that any new export activity may attract eligibility for government grants or fiscal concessions.

3. Any major anticipated changes in ownership of your business, including expected or unexpected changes in your private life.

I’m thinking here of any possible ownership changes that may be brought about by any impending divorce, marriage or new partnership.

These could have a severe impact on your tax position, profit sharing and what may at first seem many other unrelated business areas.

4. Any major changes in the way or manner that you intend to do business.

If you are planning to take on a new line or expand into a new area, it is vital to ensure that any investment expenditure is written off in the most efficient and beneficial manner.

5. Any communication at all from your tax authorities

This should be shared with your accountant or CPA as soon as possible. Many businesses dismiss the initial letters and think it is better to wait before letting their accountant or CPA know. WRONG!

The sooner the better is always best. Your accountant or CPA is much more familiar with the workings of your local tax people and will probably know what to expect in terms of their future interest in your business from just a glance at the wording of any letters received.

6. Your exit plan from the business

Whatever the reason, your exit plan is something that should be well thought through and discussed in advance. So if retirement plans or disposal of the business suddenly becomes an issue for health or financial reasons, again let your accountant or CPA know as early as possible.

There are serious taxation questions in play here that could have a massive impact on how much you retain from any sale of the business.

7. Whenever you review your future business plans it is a good idea to talk them through with your accountant or CPA.

Any planned purchase or disposal of assets needs to be planned with the assistance of your accountant or CPA in order to gain the maximum tax advantages.

So as is often the case, fore warned is fore armed. Your accountant or CPA’s prime duty is to protect your best interests. It therefore only makes sense that any planned changes are shared with your accountant or CPA at an early stage so that they may make you aware of any liabilities or opportunities that you may not have considered.

This article was written by Brian K Fitzgibbon CPA.

Brian is an experienced accountant and small business consultant. He runs his own business, lectures extensively on small business topics and has checked out and valued many hundreds of small businesses for buyers.

Brian is also the author of the highly acclaimed and invaluable
"How To Value A Business And Buy It Without Fear"
A do-it-yourself guide for first-time and experienced buyers alike.

To download a FREE Chapter from Brian's book please follow this link: "HowToValueBusiness.com"

June 4th, 2009 | Tags: accountant, buy a business, buying a business tips, cpa, help | Category: articles | Subscribe to comments | Leave a comment | Trackback URL  |