COMMENTARY: Accountants & lawyers, simplified
Are you getting everything you expect from your lawyer and accountant? Do you really know what you should expect from them?
You say, “Sure—I expect my lawyer to keep me out of legal trouble and my accountant to keep my books and taxes straight.” And you’d be right, up to a point. But if this is the extent of your expectations, you’ve set the bar too low.
With our industry in the shape it’s in, these two should be suggesting ways that they can serve your needs at the lowest rates possible. You don’t need a high-priced partner to handle every request that you make. Discuss what issues only the partner can handle and what issues a less expensive associate can take on.
Also discuss no-billable time. You should not feel that the meter is always running, especially on short phone calls. Most lawyers bill in 10-min. increments. You could eat up the first 10 min. simply with normal phone courtesies. Come to an understanding that you don’t expect to be billed for every second you spend on the phone. You do lots of things for your customers for which you don’t get paid. You’re his customer. He should treat you the same way.
While we’re on the subject of fees and billings, you should insist on prompt and understandable bills from both parties. This helps you plan cash flow. Furthermore, your memory is fresh on what they have done, and you will have fewer, if any, questions.
In addition to suggesting how you can save money in connection with their fees, your lawyer and your accountant should be suggesting ways for you to make more money, save more money and keep more money. They have a lot of other clients and work with a variety of businesses. Most good business practices are transferable to other industries. Make sure your outside professionals know that you expect them to be proactive in sharing ideas used effectively by their other clients.
Another important service your lawyer and your accountant can perform for you is a referral to someone who can help you with problems that are outside their discipline. In the course of their work with other clients, they may have come across someone who is particularly good at developing a marketing plan, creating a compensation package or has another skill. If they see that you need this sort of help, they should be proactively recommending these individuals.
Your relationship with both your lawyer and your accountant must be based on mutual respect and trust. Communication is the key to fostering this kind of relationship; only bats and mushrooms like to be kept in the dark. You should talk with them about your plans so they might be able to spot a potential problem. Their job is not only to get you out of trouble, but also to keep you out of trouble.
Your lawyer and your accountant should be deal makers, not deal breakers. If they must disagree with you on something, they should be expected to offer other ways to accomplish what you want. Instead of simply saying, “No, you can’t do that,” they should say, “No, but…“ or “Yes, if ….” You may find that their alternative meets most of your needs.
Lastly, let’s address the subject of if and when you should change your lawyer or accountant.
Obviously, you should change either or both when you believe they are not meeting your expectations—if they fail to meet deadlines, don’t always do what they say they will do, are not totally responsive to your questions or complaints or forget that they were retained to protect you and your interests.
Short of these transgressions, should you change for the sake of changing? The answer is different for your lawyer and your accountant, especially if your accountant performs audits for you.
You probably ought not to change your lawyer if he consistently meets your expectations. Your lawyer’s role in your business is much more personal than your accountant’s.
It’s probably a good idea to consider at least evaluating changing accountants every five years or so. Auditors tend to reuse models from the previous year. After a few years, the audit can become perfunctory. Change might be good. If you don’t want to change firms, consider asking for a different partner and staff. If you change your accountant, be sure to discuss your reasons with your bank and major creditors. An abrupt change might be viewed as a sign of trouble.
The professionals you retain are a reflection of your business. Retain the best.
Tillman appointed to lighting company board
Cree Inc., the Durham, N.C.-based manufacturer of LED lighting products, has elected Robert Tillman to its board of directors. Tillman, 67, is the former president and CEO of Lowe’s. After his retirement from Lowe’s in 2005, he became a member of the board of directors of the Bank of America Corp. until 2009.
Tillman will serve on the compensation committee of Cree’s board of directors, the announcement said.
Cree is a publicly traded company with annual revenues of $867 million. Its products include LED fixtures and bulbs for both the retail and commercial markets and semiconductor solutions for wireless and power applications.
Quarterly sales slip 3.2% at Huttig
Huttig Building Products, the St. Louis-based distributor, reported net sales of $127.2 million for its last fiscal quarter, which ended Sept. 30, a 3.2% decline from sales of $131.4 million in the same period of 2009.
Sales declined in building products but increased in all other product categories in 2010 from 2009, the company reported in an SEC filing. Millwork sales increased approximately 6% in 2010 to $58.4 million. Building product sales decreased approximately 15% in 2010 to $54.9 million. Wood products sales increased approximately 15% to $13.9 million in 2010.
The company posted a net loss of $4.5 million for the three-month period, compared with $1.1 million for the same period a year ago.
On Sept. 30, Huttig amended and restated its existing credit agreement with a four-year, $120 million, asset-based senior secured revolving credit facility, according to the filing.
Huttig is a two-step distributor of lumber, panels, decking, windows, doors, fasteners and other building materials. The company serves 41 states through 27 distribution centers.