Why Your Dream CPA Should Have a Clear Understanding of your Financial Situation (& Your Values)
A few years ago I had hit a point in my business where I was working 100+ hours a week and as a result, I was feeling burnt out, drained and frustrated. More often than not, when we are feeling exhausted in our professional lives it tends to seep into other areas of our universe and this was exactly what was happening to me. I needed a change and I needed it quickly.
After much reflection and conversations with friends and mentors, I realized I needed to take time to focus on the things that I truly valued and ask myself the big question: Why am I working? And, why am I working this much? Why am I doing this job?
Obviously, we all work to earn a living and provide the basic necessities for ourselves and our families. But once we meet that necessary dollar amount to meet our physiological and safety needs on Maslow’s Hierarchy of Needs, what are the other needs and values that motivate us to earn the money to support us beyond our basic needs?
For me, I realized that working myself to the point of exhaustion solely to have extra money in the bank was just not worth it. What was the point in having that money when I didn’t even have time to enjoy it? I took some time to reflect on my values and the goals I had for MY life rather than what society said I needed to be doing.
While these all sound like very personal questions and thoughts to consider, the reality is that you really should share them with your CPA or financial coach, too.
Yes, I’m serious.
Keeping your CPA in the loop about your goals, dreams, values and fears surrounding money is going to help them to support you to build the best business or personal financial plan for YOU. When working with an accountant, their role is to provide tax advice, help you get your books in order, and guide you to make the best possible decisions based on your financial situation. But sometimes, your checking account may be looking rock solid while your life circumstances are leaving you overwhelmed and anticipating costly decisions. So, your CPA needs to be able to understand the whole picture to best advise you on your next steps.
For example, most CPAs would say you should make sure to max out your 401k contributions before the tax deadline because it will save you on taxes. While yes, it is absolutely going to save you on taxes, it is not a blanket statement I would make for every client I work with.
While maxing out your 401k is going to save you on taxes, it’s not going to do a lot for you here and now in the present if you’re, say for example, pregnant with quadruplets and hoping to relocate and buy a home.
If you deposit those funds that you think you may need in the near future into your 401k — it doesn’t mean you can simply get it back whenever you need it. If you find yourself in a pickle and need that cash, there would be an early withdrawal penalty on top of the tax to get that money back into your checking account.
As business owners, we often want to make decisions with our hearts rather than our heads and that’s not necessarily a bad thing. Having a CPA who knows your books can help you in this department, too.
For example, maybe you have been through what feels like 15 different administrative assistants and you have FINALLY found your dream employee. They have been working part-time but your business is growing, you need more help but aren’t sure how to navigate the expenses of bringing on a full-time employee. You also really value her work and want to provide benefits beyond the minimum such as a paid family leave or generous vacation time.
By sharing these goals with your CPA, they can help you plan for and implement them in a way that supports the financial health of your business operations as well as the retention of your employees. I’m not saying you would be able to continue with every other business expense, but by connecting to your values, you could prioritize the expenses that are most important to you and build a financially secure business that you are proud of.
If you’re ready to work with an accountant who wants to get to know you beyond your numbers, book a call with me to find out how I can support you in your financial journey.