Time to Review Your Advisors

Sergei Galeano, CPA
Sergei Galeano, CPA

I would advise that all business owners and leaders should have a trusted group of service providers/advisors.  This is especially important for the small to mid-size business owners who generally don’t have such professionals on staff.  This is your non-employee support team.  I am talking about your banker, tax professional/CPA, business lawyer, insurance agent(s), IT support, and of course your CFO.

You may have many of these you are working with, but are they working for you?  We get in the habit of bringing them on, but then not really evaluating how good a job they are doing.  Every two or three years, if not more often, it is important to review how well these providers are serving you.

Banker:  Have you seen your banker in a while?  I find with small to mid-size businesses, in particular, banker contact is often sparse.  It is important to have a banker who is proactive in keeping up with your business.  This may mean just a couple of visits a year.  All the better if it is a standardized timeframe, roughly the same time of year, each year.  You want a banker that wants to come in and see how your business is doing and asking about changes in your business.  She should be sharing new products and services they have to see how they may fit your needs, and reviewing current services to see if you are paying for something you don’t need.  You should also be reviewing the possible need for lending facilities, ideally well before you actually need them, or adjusting the facilities you already have if circumstances have changed.

Tax Accountant or Lawyer:  How is your cash position?  Well, this person could have a significant impact on how you answer that question.  1. Do you have a competent, knowledgeable tax professional working with you?  2.  Does this professional understand your business and communicate with you occasionally to learn what is changing?  One without the other is not very helpful.  There are so many nuances to the tax code that keeping up with how the business is operating is the only way this professional can serve you best.  And don’t be afraid to consider a separate expert for different needs such as an acquisition, R&D, or patent issues.

Lawyer:  Again, you want to be sure your primary business lawyer has an understanding of your business and is comfortable with your industry if there are issues peculiar to it.  There are so many aspects of law, general business, tax, human resources, patent, M&A, litigation, etc. that you also want to be sure you are dealing with a lawyer who can competently handle your issues and knows when to recommend someone else.  If your lawyer says he can handle everything, then you probably have the wrong lawyer.  We’ve seen many instances when a business owner gets deep into a transaction or dispute only to realize their lawyer is not equipped to handle the issue.  Ideally, your lawyer is proactive in keeping you abreast of new or changing laws that may impact your business.

Insurance Broker/Agent – Property & Casualty, Workman’s Comp:  Has your broker come in to talk to you about what changes have occurred in your business?  Ideally, this occurs at least annually, well before renewal.  How often have you just received your renewal notice and rates without any contact from your broker?  On more than one occasion I have had an unrelated broker review my company’s policies and found things we should be doing differently.  When I present those thoughts to my current broker, I am told that they can do that.  I am sure they can, but why am I telling them how to do their job?  We are talking about significant potential savings, and perhaps even more importantly, proper and adequate coverage.  You don’t want surprises when a disaster occurs.

Also, one area that is often overlooked in this segment is your workman’s comp coverage.  Often taken for granted, but be sure you are speaking with a broker who understands it, especially if you are dealing with a PEO or sub-contractors.

Insurance Broker/Agent – Health Insurance:  I think every business owner understands the impact of your health insurance costs.  Some brokers will just find you the lowest rate out there or the plan that makes them the most money.  Again, this advisor needs to understand your business, changes within it, and what is important to you.  There are a lot of options out there with self-insured, level-funded, fully insured, high deductible, etc., etc.  You need a good advisor to evaluate what works best for you.

IT Support:  This is an area often overlooked by many companies, let alone smaller ones.  You should have some level of support, regardless of your size, to keep your data safe, keep the equipment working, and have a recovery plan should things go awry.  Often the level, or person(s) that you have helping you, will change as you grow.

CFO:  If you are using an outside CFO, or should be, you should view this person just like you would a full-time employee.  Are they providing you good counsel, informative and actionable reporting and analysis, proper training and management of other staff (if applicable), and taking the time to understand your business and its challenges?

So you see a recurring theme here.  A key requirement for any of these, or other advisors you may require, is that they have an understanding of your business and they communicate often enough with you to keep up to date with changes in your business and industry.  Don’t hesitate to reach out and let them know if you are not satisfied.  Often they may still be the right fit if communication improves.  You should also not hesitate to “take that meeting” with competing advisors that may come highly recommended.  Knowing what else is out there can be invaluable when you find yourself needing a change.

If you would like to learn how Nperspective can help your business in 2021, click HERE to schedule a call.

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