Every rental company should have a CPA and attorney that is familiar with their business and that they can rely on.  They should be part of the trusted inner circle of your business.  These important advisors should be competent, timely and remain up-to-date with their practices and continuing education.  Too often we see companies using their “cronies,” family friends or old school buddies that were chosen because of past relationships and not their competency or abilities.

Your CPA should be on the front lines with you.  We know of CPAs who regularly visit their clients’ rental stores and often take the time to subscribe to industry publications. A CPA can spot negative trends in your business such as excess payroll, inventory, debt and past-due receivables. Today’s tax laws are ever changing with things like bonus depreciation and lower tax rates on dividends; you may be unaware of new rules that could affect your business. We recommend that you have a tax-planning meeting with your CPA quarterly, or at least twice a year.

Your attorney should also know your business, know your ownership structure and know your company’s (and your family’s) long term goals.  They should know the history of your business, your key employees, your litigation history and the fundamentals of your insurance coverages.

Just like with rental operations, there are good, bad and mediocre attorneys and CPAs.  Your attorney or CPA is not the person or firm to sell your business, but someone who knows your business and can be an invaluable asset during the due diligence process of a sale.  Sometimes, however, we see outside advisors such as these that have grown complacent with their business relationships over time.  We have seen outside advisors that have caused undue delays and given misdirected or uninformed advice because they are afraid they may lose a long-time client.

We recently worked with a client who has waited more than three months for stock information from their attorney so that a portion of ownership could be passed down to family members.  We have other “horror” stories of outside CPAs and attorneys causing undue delays or problems with business sales, stock transfers and even re-financing.  Just as with any other vendor, you should have the expectation of timeliness, competency, relevancy and ability of your attorney or CPA.  Choose them wisely and don’t be afraid to make a change if necessary.