Time to Review Your Advisors

Sergei Galeano, CPA
Sergei Galeano, CPA

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.  A support team that includes bankers, tax professionals/CPAs, business attorneys, insurance agents, IT support, etc. are vital to the long-term viability of small business.

You may have many of these you are working with, but are they working for you?  Are they serving your best interests?  It’s easy to get in the habit of bringing on various professionals but not evaluating if they are continuing to provide you with the services that you need.  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?  For small businesses, it is important to have a banker who is proactive in keeping up with your needs.  A proactive banker can make a big difference, because the bank may be able to help your business grow if they understand your needs and deploy their resources to assist you. In order to do this, they need to meet with you at least semi-annually, if not quarterly.  Your banker should be sharing new products and services they have to see how they may fit your needs, and also by 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 Professional:   Do you have a competent, knowledgeable tax professional working with you?  Does this professional understand your business and occasionally communicate with you to learn what is changing?  One without the other is not very helpful.  A good tax professional will want to be aware of the evolution of your business to ensure that changes in or nuances of the tax code are properly being interpreted to maximize your tax position.  Also, in many circumstances, you may want to consider a separate expert for different needs such as acquisition, R&D, or patent issues.

Attorney:  Your primary business lawyer needs to have an understanding of your business and must be comfortable with your industry if there are issues unique 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 someone 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 legal counsel 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 these 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 jobs?  There are often significant potential savings, and perhaps even more importantly, proper and adequate coverage.  You don’t want insurance coverage surprises when disasters occur.  Also, don’t underestimate the impact of your workers’ compensation coverage on your business.  If not properly managed, it can be very expensive.  It is important to have an insurance professional who thoroughly understands this space, if workers’ compensation is a significant aspect of your business.

Insurance Broker/Agent – Health Insurance:  Healthcare costs have become a significant operating cost for any business that what to attract and retain the best people.  There are a lot of options with self-insured, level-funded, fully insured and high deductible plans being among the alternatives.  You need a good advisor to evaluate what works best for you.

IT Support:  Given the rapidly changing technology environment that we all face, proper IT support is crucial for keeping your data safe, ensuring that your equipment keeps working, and that you have a recovery plan should things go awry.  The degree to which you need certain levels of support will be constantly evolving. Partnering with the right IT professionals can significantly reduce your operating risk, as they are adept at ensuring seamless, uninterrupted service for your enterprise.

CFO:  If you don’t have a CFO, you need one.  A good CFO is more than a highly-compensated accountant.  A strong CFO will thoroughly understand your business, anticipate your needs and provide wise counsel, all while ensuring that your finance and administrative functions are operating effectively.  This person will ensure that you have the operating resources available to expand your business and will assist you with understanding the variables that are aiding or inhibiting your profitability.  An effective CFO will provide good counsel, informative and actionable reporting and analysis, proper training and management of other staff (if applicable) and take the time to understand your business and its challenges.

There is a recurring theme.  A key requirement for any professional is that they have an understanding of your business and they communicate with you often enough to stay abreast of changes in your business.  It is also important to routinely evaluate the services being provided and whether or not your professional service providers are continuing to add value.  You may not know and completely understand what they do, but your instincts will tell you if they are fulfilling your needs.  One often-overlooked litmus test is whether or not you value their input.  If you feel like you routinely have productive conversations with them, they’re likely a good fit.  If, instead, you think “Oh no!” when you see their name on your phone, you might want to consider alternatives, because your instincts are telling you that they’re not a productive use of your time.

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

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