June 25, 2020
Why Do I Need An Accountant?
One of the most vexing challenges for small business owners is access to the right professional expertise. Just as with lawyers, accountants play a pivotal role over the life span of any small business.
Regardless of where your business happens to sit in its lifecycle, sound accounting advice and accurate bookkeeping play a pivotal role in not only positioning your business for growth but in helping it avoid the pitfalls and calamity that seem to beset so many small businesses.
Don’t make the mistake of thinking your accountant just handles your books, payroll and tax returns. Here are some compelling reasons why your small business can flourish with advice from an experienced accountant.
1. Helping Position Your Small Business For Growth
Growing a small business is contingent on more than just marketing, selling and customers. An accountant can make life easier whether it’s creating a business plan around company formation, helping gain access to external capital be it a loan or an investor or navigating an ATO audit.
You may not require a full-time in-house accountant or even have an accountant on a retainer basis. Sometimes the most valuable contribution by an accountant is just a couple of hours of their professional advice and guidance.
Many small business owners looking to manage costs often believe they can’t afford an accountant. Yet, think of the growth your business could unlock if you weren’t tied down struggling through your BAS statements or trying to manage your businesses’ tax returns. Is running your books really a good use of your time? Not to mention the penalties that can be imposed for errors in your returns and statement.
Contracting an accountant to take over time-consuming tasks such as bookkeeping, payroll and taxes, is likely to cost you less per hour. You’ll not only free up extra time to devote to revenue generating activities, but you’ll also enjoy the security of having an expert managing this specialist function.
2. Business Planning
Whether or not you personally place much faith in a Business Plan, there are plenty of others who do. Try gaining access to working capital or funds for future growth initiatives without a Business Plan. By leveraging an accountant’s skills as you write your business plan, you will be able to incorporate financial projections and detailed reports output by your accountant’s accounting software.
This will assist you in creating a Business Plan that’s credible, realistic and professional, greatly increasing your chances of succeeding.
Hiring a professional accountant at an early stage allows you to enjoy the benefit of their financial knowledge and professional advice from day one. That will inevitably save you time, money and frustration compared to bringing an accountant in later in the process.
Sage Advice On Your Company’s Legal Entity
Not all businesses structures are the same. Small businesses have a range of legal options to choose from in establishing the business and in ensuring it continues to grow.
You have sole traders or proprietor entities limited company structures, limited liability partnerships or even corporations. Their advantages and disadvantages can have profound implications for your business.
An accountant can outline the business structures available, walk you through their tax and risk mitigation properties and assist you to select the legal entity that reflects your vision for your business.
Financial Advice And Accounting Services
Small business accounting can quickly become a quagmire for the unwary if you attempt to manage your books on your own. An accountant can, not only help you stay on track, they can avoid expensive mistakes that could otherwise set your business back.
A disciplined accounting package can also automate the production of reports on key business metrics. From Operating Margins, to Cash Flow To Debt, to Inventory Turnover and ROI, an accountant can help you understand your company’s financial situation at a glance.
Access to these tables and charts will help you monitor the day-to-day health of your business and monitor important issues such as cash flow and aged debtors.
An Accountant Is A Critical Member Of Your Team
One of the joys of owning a small business is the opportunity to have control. You can build your business strategy around your vision, manage your own workload and working hours and manage your own finances.
Inevitably, however, most small businesses grow and evolve becoming more complex and demanding. Similarly, your businesses external environment is becoming more complex to navigate not simpler. New regulations, permits, licenses, taxation and compliance reporting continue to become more complex.
Then there’s the challenge of financing your business whether its operating capital or additional capital you need to fuel your growth plans. Banks and regulators are demanding ever more detailed levels of information and the penalties for getting it horribly wrong can be quite severe.
So, select the right accountant and look to develop a collaborative working relationship. Entrepreneurial vision and deal making skills allied with a solid financial position and great information make a formidable combination. And at the end of the day, with an accountant on board, you’ll have more time to concentrate on driving your businesses growth prospects.
Final Observation Some of Australia’s most successful small business owners harnessed the expertise of their accountants early on in their growth and continually learned from them as their business evolved and became more complex to operate and fund.