Hiring an accountant is a significant step towards ensuring that your business’s financial health is well-managed. However, to get the most out of this relationship, it’s essential to provide your accountant with the right information and documents. This not only helps them do their job effectively but also ensures that your business remains compliant with financial regulations and can take advantage of any potential tax benefits.

So, what exactly does your accountant need from you? Let’s break it down.

---

1. Accurate and Up-to-Date Financial Records

The foundation of good accounting is accurate and up-to-date financial records. This includes:

• Bank Statements: Providing monthly bank statements allows your accountant to reconcile accounts and ensure that your records are complete and accurate.
• Receipts and Invoices: All receipts and invoices related to your business should be organized and accessible. This includes both income (sales invoices) and expenses (receipts for purchases, services, etc.). These documents are crucial for accurate bookkeeping and tax preparation.
• Payroll Records: If you have employees, your accountant will need detailed payroll records, including salaries, wages, bonuses, and payroll taxes. This information is essential for preparing payroll tax returns and ensuring compliance with employment laws.
• Loan and Credit Card Statements: Any business-related loans or credit card transactions need to be recorded. Providing these statements helps your accountant manage debt, track interest expenses, and ensure all transactions are accounted for.

2. Detailed Information on Business Transactions

Your accountant needs to understand the context of your financial transactions. This means providing:

• Descriptions of Transactions: For unusual or large transactions, include a brief description. For example, if you’ve made a significant equipment purchase, note the reason for the purchase and its intended use. This helps your accountant categorize expenses correctly and take advantage of potential tax deductions.
• Contracts and Agreements: Any contracts related to your business, such as lease agreements, supplier contracts, or loan agreements, should be shared with your accountant. These documents can impact your financial statements and tax obligations.
• Sales Records: Detailed sales records, including information on what was sold, to whom, and for how much, are essential. This helps in tracking revenue accurately and managing accounts receivable.

3. Tax Information

Tax season can be stressful, but providing your accountant with the right information in advance can make it much smoother. Key tax-related documents include:

• Previous Tax Returns: Your accountant will need copies of your previous tax returns to understand your business’s tax history and ensure consistency in reporting.
• Tax Identification Numbers: Provide your business’s Employer Identification Number (EIN) or other relevant tax identification numbers. This ensures that your tax filings are accurate and linked to the correct accounts.
• Estimated Tax Payments: If you’ve made estimated tax payments throughout the year, provide receipts or records of these payments. This helps your accountant calculate your remaining tax liability.

4. Business Plans and Budgets

Your accountant isn’t just there to record history—they can also help you plan for the future. Sharing your business plans, budgets, and financial projections can allow your accountant to offer valuable advice and help you make informed decisions. For example:

• Growth Plans: If you’re planning to expand your business, your accountant can help you understand the financial implications, from cash flow management to potential tax benefits or liabilities.
• Budget: A detailed budget allows your accountant to help you monitor your spending, compare actual results to projections, and make adjustments as needed.

5. Open Communication and Regular Updates

Finally, open and regular communication is key. Your accountant needs to be aware of any significant changes in your business, such as:

• New Products or Services: Launching a new product line or service can have financial implications that your accountant needs to account for.
• Changes in Ownership or Structure: Any changes in ownership, business structure (e.g., from sole proprietorship to Inc/Pty), or significant partnerships should be communicated immediately.
• Financial Concerns: If you’re facing cash flow issues, unexpected expenses, or any other financial concerns, let your accountant know. They can offer advice or solutions to help you navigate these challenges.