3 Expert Tips for Getting the Most out of Your Relationship with Your Cannabis Accountant
There are many different relationships a person has in this life and for the most part, they all serve a purpose. In the cannabis industry, one of the most important relationships a business owner can have is with their accountant. Not only does the business owner want to have a good relationship with their accountant but they want to have the best working relationship possible. At Redbud Advisors we have developed three expert tips for a successful client and accountant relationship.
Having a positive relationship with your accountant is important and should be built on trust, communication, and respect. From personal experience and feedback, the Redbud Advisors team has 3 very handy tips to create the best possible relationship for both clients and accountants.
Initial Agreement and Transparency
As a client, it is important to be transparent about your accounting needs for your business.
Being transparent with your accountant at the beginning of your relationship by telling them what services you want them to provide is key to setting your working relationship up for success. Open lines of communication help any relationship blossom and your relationship with your accountant is no different, talk openly and often. It will do wonders for starting off on the right foot.
As a client, you never want to expect your accountant to do work for your business that is not included in your initial agreement. If you request an extra service, be ready to pay for it.
Don’t gatekeep information about your business, at least not with your accountant. Tell your accountant about every aspect of your business. This allows us to use proactive thinking. Most accountants have worked in different focuses of accounting and may have some different perspectives that you hadn’t previously thought about. Your accountant has a much better chance of saving you money if they have all the information. If you are looking for your accountant to advise on the best options for your cannabis business, this information can be skewed if you aren’t providing the whole picture. In the long run, you are only hurting your business by not giving all the information to your accountant.
From an accountant's side, they should be transparent about the services they provide and the pricing to ensure no surprises for their clients later. This includes not over-promising and under-delivering.
It is a good practice to get in the habit of reevaluating your working relationship with your accountant annually, or sooner if needed. This will ensure your accounting needs are being met as your business evolves. We recommend the same for accountants.
Healthy Working Relationships and Boundaries
Having a respectful relationship with your accountant is just as important as your communication. Accountants are professionals and should be treated as such. You may not always like the information your accountant has to deliver but remember they are on your team. Accountants work hard to ensure that you are staying compliant with all federal, state, and local laws. It is their job to help you pay the lowest legal amount of taxes.
Setting healthy boundaries is another form of respect for both you and your accountant. During your initial meetings your accountant, more than likely, will inform you of their working schedule. They will also work with their clients to set up meetings to have a general catch-up or talk over financial records. It is important to respect these boundaries, just as it is important for your accountant to respect your working schedule and meeting needs.
It should go without saying but asking your accountant to do something illegal would violate boundaries. Never ask them to do this. Never purposely give them incorrect information to achieve this outcome. Tax avoidance and tax evasion are not the same things. In the end, you will lose a good accountant and more than likely find yourself in a tax audit with the IRS. Even worse, you could find yourself behind bars.
Like any relationship you find yourself in, you get out of it what you put into it.
Organization and Deadlines
There is so much to say on this topic, stay with us.
Being an organized client ensures you are able to follow up on your end of the agreement. This sets your expectation for your accountant too. Typically in your initial meeting with your accountant, a schedule is outlined to ensure deadlines are met with your accountant. This also ensures any IRS deadlines are met as well.
Your accountant will make you aware of what documents and information you are responsible for providing and you will be given a specific timeline. Adhering to this helps give your accountant the time and tools they need to complete financial statements or filings.
Your accountant's work is only as accurate as the information provided to them- they aren’t always at fault for mistakes or missed deadlines. Do you know that old saying about the horse? It can be the same for clients, you can lead them to water but you can’t make them drink.
Being organized is important but so is being prepared. All that information you are giving your accountant gets turned into financial statements. These statements are returned to you for your review and records.
It is important when you receive these statements to go through them and check for accuracy. Remember, most accountants are not engulfed in your business day-to-day making it possible for an oversight. This can happen more often when working with new accountants until an ebb and flow are in place. Don’t be afraid to challenge your accountant - we are human and make mistakes. The tax code is 5x longer than the Bible - no accountant knows it all!
Meetings with your accountant are for a purpose. Most of the time it is to answer questions from both parties. This is helpful when clients are prepared. When you meet with your accountant you want to be prepared with your specific questions. This will help save time and clear up any errors or confusion. Asking your questions and working with your accountant to update your process as needed will ensure future financial statements have fewer errors or are free of errors.
We said we had three tips but in reality, there are many tips packed in. All of these tips will create a great working relationship with your accountant but these tips are probably true for most business relationships. The biggest takeaway is to be transparent with your accountant, be respectful, and be organized (or at least meet your deadlines).
Entering into a relationship with an accountant can be scary in general. Having a business in the cannabis industry really intensifies that fear. It is important to vet your accountant just like you would vet your vendors and employees. Finding an accountant that is a good fit for you and your business is better than looking for flash names or slogans. But be sure to look for accountants who specialize in cannabis taxes- after all this is still a very intricate industry and highly regulated.
If you are in the market for a cannabis accountant who is laid back and an expert. Reach out to the Redbud Advisors team. We have a whole team of cannabis tax experts who love to educate and are easy to get along with.