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Hector Garcia Says: “Five Questions You Should Not Ask Your Accountant”

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Did you know small businesses are more likely to succeed (perform better, last longer and bring in more money) when they’re backed by an accountant? It’s a fact. When you’re with your accountant, you probably have plenty of burning questions.

 
But how do you know if you’re asking questions that provide beneficial answers and help you get the most out of every consultation?

  


 

CPA, small business consultant and YouTube superstar Hector Garcia wants to point you in the right direction (if you haven’t already checked out Hector’s YouTube channel, we highly recommend watching a few dozen of his videos).

 

Known for his unparalleled insight into accounting and QuickBooks best practices, Hector recently shared five questions you should not ask your accountant.  His “do not ask” list is based on his belief that questions that are too broad or too focused on short-term problems garner information that’s unhelpful - or worse getting stuck in the old mentality that accountants have a very narrow role...

 

He also recognizes that these five questions are the among the most commonly asked and quite possibly the very reason that an entrepreneur visits the accountant in the first place; but, the spirit of the challenge to the questions is to push the profession to be focused on adding more value-added advisory services.

 

 

1. How do I pay less taxes?

2. How do I grow my business (and sales)?

3. How do I cut costs?

4. How do I improve my cash-flow?

5. How do I control the labour hours of my employees?

 

 

 

As a best practice, Hector recommends asking forward-thinking questions that focus on the long-term growth of your business. Don’t get caught up on “small-wins.” Instead, concentrate on the whole journey. Ask specific questions, rather than generic ones, so the answers are unique and meaningful to your business.

 

If you’re wondering what questions you should ask to improve the way you and your accountant evaluate your business strategy, Hector’s got you covered. Check out the second half of Hector’s video for 17 awesome questions you can use during your next consultation.


A very special thanks to Hector Garcia for his tremendous insight! Tap into Hector’s vast library of knowledge and reach out to him directly if you love what you see.

 

 

Now it’s your turn

What are some more “unproductive” questions you hear asked in your industry? 

5 Comments
Regular Contributor

Re: Hector Garcia Says: “Five Questions You Should Not Ask Your Accountant”

1. How do I pay less taxes?
The supreme court said in ruling that a taxpayer is allowed, encouraged to use the tax laws to pay as little taxes as is legal.  The fact is that unless you are dealing with a tax accountant, most accountants have no idea.  Tax accounting is more of a specialty area.  Why you would use an accountant (which means he uses a tax accountant and bills you for that) instead of hiring a tax accountant to start with is beyond me.

3. How do I cut costs?
THIS is definitely in the realm of the accountant you pay.  He should be analyzing your costs and warning you that certain ones are increasing at an unusual rate.  If all you hire an accountant for is to push numbers - stop wasting money and hire a bookkeeper.  There is a cost savings right off the bat.

4. How do I improve my cash-flow?
Cash flow analysis is taught in accounting classes last I checked - why would you not expect your accountant to help with that?

2 & 5 are managerial type things I agree they are not accountant specific questions.

I would love to see the statistics, and especially the questions feeding that data, that supports the concept that small businesses are more likely to succeed with an accountant than without.  Having taken statistics, the questions are the key, ask them the right way and you get the answers you wanted, and if that fails, keep in mind the old saying, "figures lie, and liars figure" applies to statistics.  You can make numbers say most anything.

Member

Re: Hector Garcia Says: “Five Questions You Should Not Ask Your Accountant”

Hi Rustler, The piece is meant to be provocative... as those 5 questions ARE the most commonly asked to accountants and probably the reason you hire an accountant in the first place... It is at least the most common reason people hire me.

 

This is the first of some pieces in which I use the concept of business advisory as the catalyst for driving value to our clients as computers/AI/quickbooks automate some of these things and can deliver numerical answers within seconds... and what will the role of the accountant have?

 

hope that makes sense, where I am coming from...  Thanks your comments by the way, I am agreeing with you actually!

Regular Contributor

Re: Hector Garcia Says: “Five Questions You Should Not Ask Your Accountant”

@hectorgarciacpa

 

Well if you are trying to talk about driving value to accounting clients and how software can help - I don't see where this article even introduces that concept.

Hector Garcia’s five questions you should not ask your accountant:
[emphasis added]


That is a pretty cut and dried statement to me, what connotation did I miss?

The Sleeter group did a whole series on your subject not too long ago, I did not agree with all of it, but it did cover your proposed subject very well, have you looked at it?  Sorry I do not have the link, wasn't important enough to save.

Established Member

Re: Hector Garcia Says: “Five Questions You Should Not Ask Your Accountant”

I would like to add, the important thing is to find an accountant who understands your business and industry.  As Rustler said, some of those questions are business management questions.   A good consultant who specializes in a particular industry should be able to offer better advice on how to cut costs and grow the business.  When I bought my company 10 years ago and inherited the former owner's accountant I quickly realized he didn't have a clue about how our business operated or the industry for that matter.  He barely did a passable job on our annual taxes.  The more I looked into those the more mistakes I found.  He swept an awful lot of things under the carpet, I'm sure because he was so rushed during tax season and had no extra time to ask about specific transactions in our books.  I've been doing my own books and corporate taxes for the past 8 years (easy with Turbo Tax) and cleaned up all the problems. 

 

Re success of small businesses with or without an accountant, I have heard and seen that poor bookkeeping is a leading cause of small business failure.  A good bookkeeper/tax preparer can do most of what an accountant does for a fraction of the cost.  Medium and large businesses can much better afford accountants.  Cheers!

Community Host

Re: Hector Garcia Says: “Five Questions You Should Not Ask Your Accountant”

@WineGuy

 

These are very good points. I am sure @hectorgarciacpa appreciates the feedback. Do you think one way to alleviate shady accounting is to work with an accountant/bookkeeper on a regular basis to ask questions throughout the year? Or is it more about finding a good fit?

 

Glad you took the reins and learned how to do a much better job. What's an acceptable level of accounting knowledge business owners should know so they can spot patterns like you did? 

 

We should write a companion piece about signs/red-flags of poor bookkeepers. Absolutely. Where do we start?