October 31, 2016
Communication is one of the most crucial tools you have in your toolbox as a farm leader. It allows you to do what you need to do each day. It helps you accomplish tasks through your employees and through others – like your vendors, suppliers and the other partners you work with to make sure your farm business runs smoothly.
Good, two-way communication with partners and stakeholders is important as you make any plans for the future of your business, especially when it comes to your operation’s financials. It’s getting to that time of year, as harvest gets closer to wrapping up, when many are starting to think about 2016 taxes.
Here’s a question to ask yourself: What’s the communication between my tax accountant and I been like throughout the year? Have they been checking in with me for updates and changes happening in my operation? Or do I only hear from them once a year – at the end of the year, when they’re asking for the information they’ll need to prepare my taxes?
Feel the pulse
You want to work with a tax accountant who stays in tune with the financial pulse of your operation consistently – and the more dynamic your farm is, the more crucial this is. They also need to be staying on top of the changing tax code when it comes to ag – no small task – and letting you know how those changes may impact your farm’s tax strategy.
You want to be working with a tax accountant who does forward-looking tax planning with you, as well. That planning can help as you’re making decisions – big and small – for the future of your operation. This may be especially important if your operation is potentially in a loss situation for the year.
Then, when it’s tax time and you’re anxious to know how your tax year ended up, you’ll have a good idea where you stand. The results also depend on how much information you or your bookkeeper have given to the tax preparer in advance, and the level of organization in your farm books.
Rate your accountant
As I said before, good communication is a two-way street. You and your bookkeeper play a big role in making sure the right information gets to your accountant in a timely manner. But your accountant needs to be proactive, too – reminding and helping you get that information to him or her in the right timeframes.
Consider your current accountant or tax preparer. On a scale of 0 to 10, how would you rate them on how proactively they communicate with you? Are they able to get you the tax information you need in a timely manner? Do they engage in forward-looking tax planning with you? Do they welcome your questions – or does it seem to be a burden to them?
You need to make sure you’re working with a tax accountant who is a true partner to your operation. They’re a critical member of your farm’s team who can make a big difference to your success. Make sure all of your team members and partners are helping you anticipate and plan for the financial future of your operation, especially your tax accountant.
The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.
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