Your accountant wants to be part of your management team
Proactive business planning requires more than one annual visit to the accountant.
According to farm financial experts, farmers developing successful business strategies and transition plans should meet with their accountant at least once outside tax season. This can prevent short-term issues and pursue longer-term goals.
For Shawn Deyell, a chartered professional accountant and partner with RLB based in Guelph, Ont., once-a-year meetings inevitably focus on addressing immediate tax issues. This means short-term needs displace all other topics.
“That same meeting is not the best place for planning,” Deyell says. “Instead of being a financial janitor and tidying up after the fact, how do we make a plan going forward?”
Deyell says even one additional meeting each year can have a significant impact. This second meeting – ideally held half or three-quarters of the way through the year – gives farmers time to understand and adjust for issues during tax time. It’s also an opportunity to analyze short, medium and long-term business goals with less distraction.
Deyell adds further meetings might be necessary for those involved in transition planning or working through other major changes. According to Stuart Person, a farmer based in the Edmonton, Alta. area and Senior Vice President, Agriculture at MNP, a national tax and business advisory firm, frequent meetings are even more important for those taking more managerial roles on larger farms.
Regardless of farm size, more engagement helps establish good working relationships and allow for some tasks to be delegated.
“The more engaged you are as a farmer, the better result you’ll get out of working with an advisor,” Person says.
“Be humble. You’re not going to know everything in the business world… don’t try to do everything yourself. You can look at your accountant as a leverage tool by utilizing advice.”
Keeping a budget - even a general one – is useful when addressing goals during meetings, says Deyell.
“It should give a good idea on how things are going, as opposed to dealing with things as they come up or after the fact,” says Deyell.
Taking advantage of training opportunities is also an option. This, he says, can take the form of online courses for better financial management, as well as simply asking more questions to one’s respective financial advisor.
Meeting to discuss any significant business decision, adds Person, is always more productive if the farmer enters with some background information. He cites having preliminary discussions with family for transition discussions and knowing what the lending terms are for an equipment sale as examples.
“Any good advisor should be part of a team… the more communication that can happen earlier on, the better,” Deyell says.
Person expresses a similar sentiment.
“I look at business advisors as building partnerships with farmers. We want to be their go-to,” he says.
Visits to farm business accountants – at least one other time outside of tax season – create a team approach to farm operations, advisors say, and opens the door to analyzing business goals.
Article by: Matt McIntosh