WHY CAN’T WE ALL JUST WORK TOGETHER? - A Client-Centered Approach to Working with Business Advisors

Small business owners are often so busy working in their business that they neglect to work on their business.  More than ever, in these complex and competitive times, businesses are forced to confront how best to provide their customers with products and services in an efficient, cost-conscious manner while simultaneously maximizing the limited time and resources they dedicate to stay abreast of laws and regulations that may have an effect on their business.

It is critical for a small business owner to arrive at a business plan that acknowledges the need to grow but also protect the business.  The old maxim “an ounce of prevention is worth a pound of cure” can mean so much in today’s business environment and raises a few key considerations for every small business professional:

1. How does a small business successfully work with and incorporate business professionals into its business plan; and

2. How does a business stay abreast of changes and developments in laws and regulations that may have an impact on its business?

Working Efficiently with Professional Advisors

Depending on the industry, small businesses may rely on a number of professional advisors on a daily basis, or their advisors may be less involved or non-existent.  All too often we hear that a small business owner does not or cannot afford to hire proper talented business advisors.  They jump in feet first, which often means they did not have time to plan for long-term success. Even if a business owner gets information that would normally be provided by a professional advisor, that owner may not understand the true application and full legal or tax effect of that information on their business.  Once the business is undergoing an audit or being sued, it is too late to plan and advise on a proactive rather than reactive basis.  Unquestionably, every small business should have at its core two professionals actively participating in working on their business: an accountant and an attorney. 

As important as finding the right certified public accountant and business attorney, it is probably more important to find the appropriate combination of accountant and attorney who are willing to work with one another, are able to communicate with one another and are client-centered.  There is no place for a business professional with a personal agenda and who is not willing to consider new or novel approaches.  Having a trusted accountant and attorney regularly communicate and assist in charting business goals is the best way to maximize the time and resources a business owner spends working ‘on’ the business.  Long time Certified Public Account and Owner of OnTarget CPA, Michael Jamison, has witnessed first-hand the benefits of professional advisors working side-by-side to assist the client.  Mr. Jamison notes, “It is crucial that our clients understand their limits and be willing to work with us to encourage business growth and minimize tax liabilities.  Towards that end, we always encourage our clients to work proactively with us and their attorneys in unison to arrive at cost-effective, pro-active business solutions.”   

The reasons for hiring an accountant are fairly obvious: businesses need someone to help set-up and maintain accounts, review expenditures and income, and prepare all necessary federal, state, and local tax returns.  The reasons for hiring a business attorney are not only for the routine matters of helping a business stay abreast of applicable laws and regulations crucial to the business, but also to have an advisor ready and up to speed at a moment’s notice when and if that business needs assistance dealing with a dispute.  As business attorneys, we provide vital assistance in almost every aspect of one’s business, from formation structure analysis, contracts, employment, real estate, mergers and acquisitions, basic zoning compliance, copyright and trademark advice to lawsuits, and assessment of liability.  By working with a combination of professional advisors, including, an accountant and business attorney, a business owner is in the best position for long-term success

Discussions led by an attorney between an accountant and the client may also be protected by the attorney-client privilege and not subject to disclosure or discovery in the event of a lawsuit or audit.  This added protected communications between the business client’s trusted advisors should be fully analyzed and discussed between the client, attorney, and accountant.

Laws That Illustrate the Benefit of a Client-Centered Team Approach

There are constant changes in the law affecting businesses, which are difficult if not impossible for a business person to react to, let alone be aware of.  If an attorney and accountant are able to openly communicate about these changes, the impact of those changes on the business can be analyzed and addressed, thereby limiting the involvement of the business client who can continue to work in the business rather than on it.  Here are some examples that illustrate the benefits of a client-centered approach and analysis.

1. Attorneys are often asked to form a business but are not always consulted as to changes in the business operations or purpose over time.  The accountant is often the first professional advisor to know of such changes since the accountant is meeting with the client at least annually to address its financial condition.  When an accountant and attorney work together, they can discuss these changes and work towards a proactive approach to address implications of these changes.  For example, if a business expands and starts offering contractor services, numerous laws are applicable to those services, including the Indiana Home Improvement Act.  The Indiana Home Improvement Act is a statutory consumer protection law designed to protect homeowners from unscrupulous contractors.  Contractors who violate the act may suffer severe penalties, including anything ranging from voiding the contract to penalties, damages and attorneys’ fees.  Our contractor clients are often surprised to learn that they may be violating the Act simply by using contracts that fail to provide statutory information.  Identifying that these laws may be applicable and confirming that the contractor has a valid conforming contract in advance of any dispute may ultimately save a business extraordinary sums of money and resources.  

2. An accountant may further advise a client how to go about paying off outstanding debts but may not be mindful of the legal effect by favoring certain creditors in advance of other creditors.  The uninformed business owner who gets too creative and favors creditors while experiencing financial difficulties could be creating greater financial issues.  Favored payments could be subject to being taken back by a Court or Bankruptcy Trustee as a preference payment.  The client and accountant should consult with the knowledgeable attorney in analyzing how to make proper and timely payments.  With such a client-centered approach, that same client could work to pay obligations while navigating this legal minefield of unintended preferential payments. 

3.  If you have not been living under a rock, you may have heard that there are tax reforms effective for 2018.  One very important modification now permits S-Corporations, LLCs partnerships, and other flow-through entities to qualify for a deduction of 20% of their qualifying income from taxation if they meet certain criteria.  Planning is important for clients with flow-through entities so that they can get the most out of this provision in the law.  For example, for LLCs taxed as a partnership, guaranteed payments are not qualified business income whereas ordinary business income can be qualified.  Clients should review operating agreements and other organizational documents to ensure compliance with new tax laws.  Properly analyzing compliance while minimizing a business’s tax liabilities requires cooperation between the attorney and accountant working with the mutual client’s best interest in mind. 

4.  Not that a business ever expects to be charged with allegations of sexual harassment, but if such a charge were to be lodged and the business decides to settle, the business better be aware of changes in the law.  For instance, companies can no longer deduct any settlements, payouts, or attorneys’ fees related to sexual harassment if the payments are subject to non-disclosure agreements. Any business client considering such a settlement should involve its attorney and accountant to consider the legal and tax effect of such a settlement. 

5. Certain tax deductions have now been eliminated, such as employer-provided parking and entertainment expenses incurred in the course of business.  Food and beverage expenses that qualify under the old rules remain 50% deductible.  Knowing how to apply these deductions and the effect on each business are primarily a concern for the accountant; however, attorneys should participate in advice regarding the effect of not now permitting certain previously permissible deductions on employee relations.

6. Under the new tax reform bill, individuals now have an $11.2 million lifetime inheritance tax exemption and married couples can exclude inheritances of $22.4 million.  These amounts have doubled over 2017 limits.  These estate tax changes should invite conversations between accountants and attorneys as to the best business and estate planning mechanisms to use clients.


Although this list of laws is by no means exhaustive, it should illustrate the benefits of business clients taking a proactive approach to the legal environment and encourage an open, client-centered dialogue between professional advisors.  There are no guarantees that if professional advisors work together, the business will succeed.  However, there is a greater certainty that when business advisors are willing and encouraged to work together in unison to promote a client’s business, the business is far more likely to prosper. 

Anthony R. Jost

Anthony R. Jost


Author Anthony R. Jost

Tony Jost represents clients in various aspects of business and civil litigation, including commercial, real estate, employment and complex tort litigation in federal and state court.

He counsels clients in commercial lease drafting, negotiation and enforcement, and real estate and business acquisition and financing. Tony further advises clients as to proper selection and formation of business entities, lender documentation, franchising, state and federal business regulatory matters and general contractual matters.

Tony represents creditors in all formal bankruptcy proceedings in federal court, provides workout answers and advice on behalf of creditors, prosecutes collection claims and defends creditors in various aspects, including but not limited to fraudulent conveyance and preference claims.

He provides answers, advice and advocacy in all aspects of business, commercial and litigation affairs with specific emphasis on the finance, health care, governmental, construction, transportation and telecommunications sectors.

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Posted Feb. 22, 2018 by Anthony R. Jost