An accountant can serve many types of roles for CEOs, from hands-off keeper of the books to proactive, fully engaged adviser. It’s up to executives to decide how heavily they want to rely on their accountants. But in general, the more interaction they have, the fewer financial surprises they’ll run into.
“I’ve been on both sides of the aisle,” says Marty Doerr, member-in-charge of the Tax Services Group of Brown Smith Wallace LLC, who earlier worked for a decade and a half as head of the tax department at May Department Stores. “I would just say, from a CEO perspective, it’s really helpful if he includes his CPA, whether it’s in-house or his adviser, as part of the team. Sometimes the CEO thinks of the taxperson as the guy who’s supposed to give him the answer after he’s given him the facts. But they need to be involved in helping create the facts.”
Sales of real estate and major asset purchases are two of the critical transaction types for which business executives should seek expert financial advice beforehand rather than afterward.
“You can’t have that input unless you’re at the table when they’re doing the transaction,” Doerr says. “That’s what I mean by being on the team. It can save a lot of hassles and probably taxes and maybe penalties, if you can weigh in before those transactions have already happened. It’s a matter of having somebody there who has their tax antenna up all the time.”
The unpredictability involving the upcoming election and how it will affect next year’s tax rates makes CEO-accountant interaction even more crucial this year.
“It’s so uncertain right now what’s going to happen with [tax] rates,” Doerr says. “Of course it’s an axiom that you don’t let the tax issue wag the dog, but most people think rates are going to go up next year. And any time we’re into that kind of a situation, particularly in an election year, it makes tax planning that much more difficult. So I would encourage management to keep the dialogue open.”
Marty Doerr, member-in-charge of the Tax Services Group of Brown Smith Wallace LLC, is responsible for overall client service and technical oversight of the tax practice, as well as training staff on best practices and new tax developments.
HOW TO REACH: Brown Smith Wallace LLC, www.bswllc.com or (314) 983-1200