Have you ever taken a moment to think through all of the possible risks your business faces each day?
What if your data center was flooded? Are you insured? How would it affect your business? Could you afford to replace the equipment and data?
What if your company headquarters burned down or some other disaster struck that destroyed all of your records? Could you continue to do business? What would you do the next day?
These are the types of questions that CEOs need to be thinking about. The problem is there are so many what-if scenarios that it can be hard to envision them all, especially when it comes to things like cash flow or taxes. How would that data loss affect your cash flow? If the headquarters building burned down, how would you make payroll?
There also may be opportunities out there that you aren’t even aware of, whether it’s a tax break or some sort of government-sponsored incentive that could save you money. The best way to work through all of these scenarios is to build a solid relationship with your accounting firm.
These days, your accounting firm is far more than some people who can help you file your taxes. Most firms now have a full range of business services and are looking to develop long-term relationships that can help you grow. You have to look beyond the hourly charge and deepen the relationship. When your firm gets to know your business better, it can help you prepare for things like a stoppage in business. It can also help you determine whether that data-loss scenario is worth the additional cost of specialty insurance or if, in the big scheme of things, it would be a relatively minor disruption to your business.
Unfortunately, too many CEOs take a reactive approach, only seeking out expertise when they need it, rather than being proactive to prevent many situations before they ever occur. It’s understandable because the day-to-day issues always seem to take priority over doing something like taking time to build a better network of experts. But if you can find the time, the payoff can be big. It won’t take but perhaps one tax credit you would have missed or one disaster that you prevent before that hourly charge suddenly looks like a bargain.
On the other hand, there’s also the risk of going too far and over-relying on your experts. While it’s important to build a relationship and listen to their counsel, it’s ultimately up to you, the CEO, to take responsibility. Only you completely understand the business. And while it’s important to listen to advice, the decision about whether to follow it or not rests with you.
Educate yourself on as many of the issues as possible so you better understand where your accounting advisers are coming from. It will also allow you to ask better questions so you can fully understand the issue and make a more informed decision. Build the relationship so that your accountant is confident he or she comprehends the issues you face and that he or she is looking at all the possibilities before recommending a course of action.
At the end of the day, it’s you who has to make the decision. But by taking the time to build a stronger relationship with your accounting firm, some of those decisions will be a lot easier.