The Importance of Finance Management: Why Your Business Needs an AccountantSeptember 8th, 2016
Many businesses, especially smaller businesses, aren’t committed to consulting their accountant on a regular basis. This can turn out to be a costly error over the longer time when in fact a trusted and competent accountant helps you understand what’s happening in your business. The advice that your accountant gives you can help you avoid costly errors while supporting you with smarter business decisions and planning. Accountants have the ability to significantly influence the success of your business, whether it be directly or indirectly. When hiring an accountant, your goal should be to develop a long-term, trusting relationship with them. Here, we go through a number of reasons as to why your business needs an accountant.
The structure of your business can impact your personal tax outcomes and personal liability in the event of unpaid debt. An accountant can give you invaluable advice in the early stages of your business when you’re just setting up. They can also help you restructure a mature business for the best possible tax and risk management outcomes.
Minimise your tax bill
Ensuring that you take advantage of all tax deductions is probably what accountants are best known for. Tax laws and regulations are constantly changing and as a business operator may not fully understand the complexities and tax implications for your particular situation. A capable accountant can guide you through all these issues and give you advice for tax planning purposes, so that you can minimise what you end up paying in your tax bill.
Error-free tax returns
As your business grows, your tax returns can become increasingly complicated. The more staff, operations, and functions your business has, the more things you will need to potentially track and report on. Error-filled tax returns can lead to delays or even fines, so to get it right the first time, work with a trusted accountant who can take care of it for you.
Best accounting software
There are numerous accounting products out there, each with their own features and benefits. Choosing the right platform saves your business time, minimises any staff training you might need to provide, and allows you to generate the types of reports you require. Determining which software package is right for your business depends on your unique requirements. Your accountant can usually give you appropriate advice on the best package for you.
Smarter cash flow management
Cash flow health is critical to any business and more often than not requires active management. Your accountant can assist you with understanding your business’s cash flow patterns and give you insights into the types of changes – whether these be inventory related or some other change – that you can introduce to achieve healthier cash flow outcomes.
Budgeting and spending
Every business needs a budget, especially when it comes to managing smart spending to drive growth. Experienced accountants are experts at this type of finance management. They can identify possible avenues for saving, find the ‘extra’ money that you need, and help you with budget planning for smoother financial peaks and troughs.
Internal audits can be useful as part of smart finance management for your business. Audits help you identify problem areas, review accuracy of records, and check that your internal controls are working. An effective audit checks that your record-keeping is in order and deters fraud or theft.
Review, forecast, and plan
Effective finance management is also about reviewing your business’s financial situation and forecasting for the long term. This sets the foundation for strategic planning and enables you to track whether your business is truly on track as planned. Without accurate financial records and an ability to understand them (which your accountant can help you with), it’s difficult to determine whether you have reached certain milestones and achieved your goals.
Forecasting is also important for sustainable growth and for making major business decisions. With a comprehensive forecast, you can better plan for when to make large investments (such as buying new equipment), when to start hiring more staff, and make other changes in your business. Your accountant can provide you with all the advice that you need to make these types of strategic-level decisions.
Payroll and superannuation
Payroll and superannuation are complex but necessary when you hire staff. Your accountant or accounting team takes care of these matters for you, and ensures that you fulfil your compliance and tax obligations with respect to your staff members. The larger your organisation, the more complex your payroll and related matters will be. This will be even more complex if you have different types of staff (part-time and casual) and if you reward staff members with various benefits and bonuses.
Smart and timely decisions
Ongoing, regular financial analysis and reporting can be vital for business success, especially if you’re expanding rapidly. An experienced accountant can translate the numbers in your financial reports and give you timely advice on what’s currently happening in your business. This means you can make timely decisions and respond quickly to any external changes or shifts in the marketplace.
Revenue growth without profit
Common problems for expanding businesses can include things such as high revenue growth without a corresponding increase in profit. Your accountant provides a fresh, objective perspective on your financial management, costs, and outgoings. Accountants are trained to identify possible cost savings and where you can cut back or adjust your business to enjoy better profit growth as your business expands. You can end up improving cost controls and identifying cost savings where you hadn’t even considered.
Realistic goals and benchmarks
Smart financial management for your business can include having more realistic goals and establishing appropriate benchmarks for these. You can work with your accountant to determine suitable benchmarks for specific goals you want to achieve. Establishing these milestones not only allows you to track and monitor your business performance; over time, it allows you to reach major strategic goals by breaking them down into manageable milestones.
An accountant can add value to your business in many different ways. If you don’t already consult with a trusted accountant, the chances are that you can indeed benefit from working with one for some or all aspects of your business.
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