Get a Good Accountant

As a person that finances equipment, each year when January rolls around it becomes stressful for me and for clients. It’s because banks and leasing companies start demanding financial statements of the previous year, and literally the year end was just days ago. It takes weeks for accounting firms to produce statements, and it becomes a nightmare as the equipment sits on a dealership lot ready to go, and no one has the capability to pay for it.

I tell companies all the time to do one simple thing; that is to get interim financial statements done quarterly. If you plan to borrow money, this is essential. If your accountant is doing quarterly statements as you go, producing the last quarter of the year will go so much faster. Instead of weeks, you will have your statements in a few days for the entire year. Cost wise, the accountant will be doing the statements for the year regardless, so either way it gets done with the time spent, but just staggered.

Getting financing when about half to three quarters of the financial year has passed is usually the banks demanding something current. If you had done the quarterly statements, you simply forward them. If you have not, now a few weeks or more will pass while the accountant does them, and your equipment sits on a dealership lot not making you any money. The loss of money with unused equipment is far greater cost than paying the accountant quarterly.

When purchasing used equipment from an auction or a person or company, the financing becomes very stressful. An auction usually wants funds in a week. When your accounting is not up to date, you are in danger of losing the equipment to the auction house. I also see people selling their equipment and when told the potential buyers have weeks before they can pay, the seller leaves. I don’t blame the seller at all. Why should they wait weeks for payment, when they can sell to a cash buyer right away or sell to someone who has their accounting up to date and can pay much sooner?

I know a person who has not filed taxes in the ten years I have known him. I told him each year to get his accounting in order. He didn’t listen. I explained it would be much easier to pay his taxes each year, then a huge sum later. He is now facing a sixfigure tax bill. He needs the money to pay the tax agency and cannot qualify for a loan because he has no income statements to show a bank. At one point he bought a home as an investment. Because he had no current taxes done and didn’t qualify for any mortgage, his friend had to come into the deal as a partner and get the house under his own name with a high interest rate. If my friend does not put his name on the home, his partner friend can literally sell the home and take all profits earned. I think the situation is just uncalled for and risky to his family and worse, to his children. This is all because he refuses to file his taxes each year.

As I write this article in early February, I have multiple clients who have not done their taxes and cannot pick up their equipment. One has had a new trailer sitting at the dealership since before Christmas, and he is unable to pick it up to use it because his taxes are not done. Another client has seven trailers sitting, with 2 more coming. He is getting his taxes completed the 3rd week of February he hopes, so seven weeks after they

PASH BRAR

were requested from the accountant. I have another client with two trailers sitting. They called each week for the last few months asking when their trailers were coming out of the factory saying they needed them as soon as possible, and each time they called were told to get their paperwork ready for when the trailers do arrive. Now the trailers have arrived, and they did not do the paperwork and the trailers are sitting unused awaiting payment. What gets me is that each client was told well over a month before the trailers were even built, that they were coming soon so get your paperwork in order. Yet not one of them did anything. This is only a small sample; there are many other procrastinators that are in the same situation.

All I can say is equipment that is sitting at a dealership looking pretty and shiny is not doing anything to help anyone in trucking. Unused equipment is not making anyone any money, including the dealership who is angry they haven’t been paid. So, from this please learn to do your financial statements for your company quarterly. You will make a lot more money that way because you have use of the equipment a month or two sooner when financing it. If you are an owner operator or company driver or anyone with a job, you should also be filing your taxes as early as possible each year especially if you plan to lease equipment, buy a car or purchase property. Even if you aren’t going to apply for a loan, getting a tax refund should be an incentive as well. So please find a good accountant. One that calls you themselves requesting your paperwork so they can file your taxes for you on time. A good accountant is indispensable!