Last week, a local CPA colleague (David) asked me to join him for lunch with one of his clients. The client is planning to build a 300 room, $40M hotel in Atlanta.

After lunch, David and I talked about how he could add more value to the relationship and begin positioning himself as a trusted business advisor (Hint: It’s about more than just tax returns!).

Four specifics of work that David could provide jumped out from this simple hotel example:

• Bank covenants. As the project progresses, the lender is going to expect audited statements regarding construction progress, invoicing and more.
• Cash flow management. Construction projects are heavily dependent on managing the flow of money – both payables and receivables. Invoices need to be paid on time (but not early and not too late). Without proper oversight, things can snowball quickly.
• Tax structuring. There are many people and entities involved in a project of this size. But it’s not just about complex legal issues; there are complex tax structures and tradeoffs that need to be worked out as well.
• Tax credits. Cost Segregation, Work Opportunity and other tax credits will no doubt come into play over the life of this project. All of these represent potential cost savings for David’s client.

I suggested that David do some homework (at his high dollar business advisor rate, not his low dollar tax filer rate!) and come back to his client with a simple plan describing these and possibly additional ways he can provide value throughout the project.

For any enlightened CPA, the key in positioning oneself as a business advisor is to ask probing questions, lay out a simple plan, and think more broadly than just the tax returns!

_________________

Try this: Sit down with one of your clients and use our Tax Incentive Organizer to uncover possible tax incentives around a given project or goal. It’s all online and it’s free. Try it here.