Tax Season Is Over… For Now
… But Many Businesses Have More Than One “Tax Season”
As you might expect, there’s a predictable rhythm – a “seasonality” – associated with the accounting business.
There’s the mad rush to get personal (and many business) income tax returns filed by the annual mid-April filing deadline… a rush that starts getting mad early in the calendar year and only builds in madness through the deadline.
That mad rush is over for 2019.
But then there’s the “second” season – income tax filings for individuals and businesses for whom extensions have been filed. Mid-October can sometimes be almost as busy as mid-April!
And tax planning, of course, is something that good accountants offer throughout the year.
Add bookkeeping, “contract CFO” work, financial reporting, payroll, and other client projects, and a diligent accountant has plenty to do to keep them busy throughout the year.
Part of an accountant’s job is to plan their work flow to take into consideration this predictable annual accounting seasonality.
But a great accountant also thinks about the seasonality of their client businesses, and understands how best to help clients manage their tax filings and financial chores through both busy and lean months.
No Two Businesses Are Completely Alike
Even firms in the same industry category can vary a bit when it comes to the seasonal “rhythm” of their businesses.
Most retail businesses are busiest at the holiday season. But consider the difference between a clothing store in the mall, and (say) a chocolate store in the same mall.
The clothing store will change the merchandise on their racks to reflect (and to anticipate) different seasons of the year… but they’re likely to be most profitable (by far) around Christmas.
The candy store? Their busiest season is also around the holidays… but they’re almost as busy at Valentine’s Day a couple of months later, and Easter and Mother’s Day also keep them hopping.
Then, when the clothing store is selling fairly steadily to people updating their spring, summer, and fall wardrobes, the chocolatier has to plan for a summer season when sales will be way off what they were November through May.
Home services companies often experience almost the reverse seasonal rhythm: they’re swamped with bids and projects in the warm summer months, and often scrambling for discounted work when the weather turns cold.
So to serve their customers best, an accounting firm has to understand not only the seasonality of their own business, but that of their client firms as well.
And it’s more than just saving money to make payroll in the leaner months. A great accountant needs to be able to advise clients on the best tax minimization strategies to take into consideration the seasonality of their specific business.
These business rhythms can be predicted, and planned for. Many variables contribute to making one year better than the year before (marketing, planning, operational efficiency, etc.), but the seasonality specific to a given business tends to remain the same from year to year.
(Entrepreneurs who own more than one business often rely on predictable seasonality… choosing a portfolio of businesses with “dove-tailing” seasonal rhythms, so they can spread their energy among their businesses more evenly throughout the calendar year.)
Make sure your accountant understands the seasonal rhythm of your business. They should be asking about it, from the outset. And the best accountants are ready with advice, from the very first meeting, on how you can maximize your business (and minimize your tax liability) through every season of the year.