Choosing an accountant? Lessons from Rihanna's $35 million mistake
/If you haven't already seen the rather explicit video released by Rihanna, you probably should.
Or not. It is terrifying. Especially for us as entrepreneurs.
In the rated M for mature, 7-minute music video, Rihanna seeks revenge on her accountant and his wife that squandered tens of millions of dollars of hers, leaving her bankrupt and hostage to damaged credit.
A little backstory: In 2014, Rihanna settled a lawsuit against Berdon LLP for mismanaging her funds and giving poor financial advice. Allegedly the couple used her funds to throw lavish parties, hire prostitutes and go on extravagant vacations. It's reported that Rihanna won $10 million from the lawsuit.
Hopefully, you've never had a situation where your accountant stole from you. While there are certainly some financial professionals with ill-intent, the vast majority of the industry is passionate about helping others attain the financial life of their dreams.
Unfortunately, those with good intentions may not have the best communication skills or may not be utilzing the right technology.
As a former accountant, almost half of my clients came to me because they felt that their previous financial professional either wasn't helpful or downright terrible.
When you hire a financial professional, you're probably looking for someone to take the money tasks off of your plate. However, you want to make sure the lines of communication are transparent and can not be misconstrued.
“When it comes to your money, as a business owner you need to play a proactive role with your accountant.”
So, what does that mean? How can you make sure the lines of communication are open? And that you are proactively managing your money along with your financial professional?
Below is a checklist for you to use to help you make sure everything is A-ok with your hard-earned money.
Make sure your financial professional has experience with your industry, otherwise it will be difficult for them to advise you on common missteps or growth opportunities.
Ask for 3-5 references from current clients before you hire them.
When you search for a financial professional, interview them. They should have done their homework on your company. Ask them questions that you would ask an individual if you were hiring them as a manager or in a customer facing role. This will demonstrate that have an interest in your company's success.
Make sure they provide business consulting services. It's not enough to just help you file taxes, they are also there to help you grow your business.
Do they use up to date technology? Ask them which bookkeeping program they use. It should be cloud (online) based so that the information is updated instantaneously and allows you to access the same information they see at all times. If you're looking for an excellent program, I'm a huge fan of Xero.
Require that they provide monthly statements to you. Depending on your business, you may want them to communicate with you on a weekly basis. Each month they should provide financial statements to you with a brief analysis of their findings and offer a thirty minute consultation call so you can ask questions.
You should be double checking their work. I recommend having a weekly 30-minute money date to spot check your books and make sure that everything is as it should be---it's your money, honey!
And now I want to hear from you! Have you had a good or bad experience with an accountant? What did you like about them or what did you learn from the experience? Leave us a comment below.
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