The Value of a Year End Meeting

By: Chase Campbell, CPA
Pearce, Bevill, Leesburg, Moore, P.C.

It’s my favorite season: football championships, holiday parties, and year-end meetings. After several years in public accounting, I am still surprised at how many business owners do not schedule a formal year-end planning session with their trusted advisors, including their CPA. Many people presume the best time to meet with their CPA is when their mailbox fills up with those dreaded tax documents starting in January of each New Year. This is unfortunate because you could be missing out on valuable tax saving opportunities through proper planning prior to December 31st.

The following are a few examples of tax related issues that should be addressed prior to December 31st:

• Fixed asset purchases: Assets must be placed in service prior to 12/31 in order to qualify for Sec. 179 and 50% bonus depreciation deductions. Should we purchase new or used assets? Will the purchase be in cash or with debt?

• Compensation: Is compensation fair and reasonable based on projected results and practice’s methodology? Have the business owners paid in the appropriate amount of tax? Ensure bonus checks will be issued prior to 12/31.

• Retirement plan funding: What is our projected current year minimum and maximum funding? How much funding remains? Will cash flow allow funding prior to the tax return due date?

In addition to mapping out your tax strategy, a year-end meeting with your CPA is a wonderful time to assess other business needs. Contrary to popular belief we understand business related issues other than just taxes! In my experience, clients generally want to discuss the following three non-tax related matters:

• Revenue Cycle Management: These discussions would include a review of the practice’s financial key performance indicators, as well as talking through issues affecting the revenue cycle, such as current and upcoming regulatory changes, technology and software needs, payer mix, collection issues, etc.

• Identifying New Revenue Streams: With healthcare practices, we need to analyze the profitability of procedures. Should they be outsourced, kept in house, or vice versa to improve the bottom line? Are there additional services or treatments that could be offered? This is also a time to discuss your practice’s marketing efforts and referral sources regarding these revenue streams.

• Human Resources Matters: Physician employment, compensation arrangements, clinical and administrative staffing levels, benefits, succession planning, and retirement plan structure.

In closing, I hope you can see that a year-end meeting can encompass more than just tax savings. This is the last opportunity each year to analyze where we’ve been, where we are going, and how we are going to get there.