Four Best Practices for Working with Your CPA & Banker

By: Sherri A. Roseen, CPA, CGMA, Froehling Anderson, Ltd

We hear the phrase “best practices” throughout the business world in many different situations.  Working with your CPA and banker is no different.  Here are four best practices to help strengthen your relationship and your business:

  1. Keep Your Advisors Updated
    1. Keep your advisors in the loop on your major decisions.  It is very difficult to unwind a transaction after you have “signed on the dotted line.”  Good advisors should be able to discuss the options with you, weigh any tax consequences and recommend alternatives if any unforeseen consequences should come to light.
    2. Be honest.  Celebrate your successes, but be honest about any issues.  Your CPA and banker can be active partners with your business to help you get through a growth phase, a tough phase, and any significant transactions.
  2. Have a Plan
    1. Having a plan is important.  You would not set out on a road trip without a good map. Utilize your CPA to develop a budget and have a plan in place of where you want your company to go.  The banker wants to know where your business is today, where you plan to go in the future and they know there will be bumps along the way.  Although the bank does not like surprises, they can help you through issues if they know about them and you have a plan to recover.
  3. Have Good Financial Reporting
    1. Don’t short-cut your interim financials.  Make sure you and your CPA are making the appropriate month end journal entries to your financials.  Be aware that large year end adjustments can hurt your credibility with the bank.
    2. Know how year end tax planning impacts your financials and loan covenants, if applicable.  If you do have loan covenants with the bank, it is important to meet those covenants. If that becomes impossible, be in contact with your banker sooner rather than later.  Not meeting your covenants can have financial consequences.
  4. Understand Your Financials
    1. Have your CPA teach you to read/understand your financials.
    2. Have your banker walk through how they read the financials.

As advisors, we recognize running a business can be a lonely and stressful role.  Regularly meeting with your CPA and banker can provide you with a sounding board to help you make your business successful.  We want to see you succeed!

Sherri A. Roseen, CPA, CGMA
Froehling Anderson, Ltd

Leave a Reply

Your email address will not be published. Required fields are marked *