Accounting is a Language

 In Articles
By Gregory S. Garritano, CPA, CFO

When something comes easy to you, there is a tendency to forget how difficult it maybe for other people. As a CPA, I still occasionally make the mistake of assuming that someone who is incredibly smart and successful must be talented when it comes to financial affairs. It should not be surprising given the five years of education, extremely difficult exam and many years of experience required to get a base level of knowledge in our field.

Our job first and foremost is to act as a translator on behalf of our clients. There is so much information available to even the smallest business in this age of technology. Information is only useful if you can understand, interpret and apply it properly to improve your situation. It is important to understand the whole business in order to give useful guidance. How the company markets itself, how it uses technology, it’s sophistication in producing its product or service, and the competence of the people running the business are all critical to a proper translation and presentation of business and financial advice.

Knowing how a bank or other creditor will interpret the business and personal financial picture versus how the taxing authorities will view them is just the beginning of our focus. Understanding the all-important cash flow picture of a company and identifying anomalies in the business transactions that could identify challenges or opportunities must be a constant focus. Knowing the most important metrics that management uses to evaluate itself and figuring ways to present that information concisely and timely can be critical to business success. Future expectations of growth, regulation, tax law, and the economy must be considered. This small sampling of considerations demonstrates the complexity of the ever-changing language of accounting.

The foundation of the CPA/Client relationship must be trusted. As with most relationships, that could take some time and effort to establish. The client in many instances is putting the well-being of his business and family in the hands of his advisors. It is important to get the right relationship. Each business is unique, and so are its needs. Working with a firm that has the reputation and resources to meet these needs now and in the future is a worthwhile investment. When you find the right fit, it allows you to focus on being the best at what you do in making the business succeed.