Plenty of small business owners think that they cannot afford an accountant, or they are saving money on hiring one. However, if you consider the time it takes to complete accounting tasks, you may soon realise that there are better ways of utilising your time.
For instance, if your time is worth $100 an hour and you spend 10 hours working on your accounts, it would cost you $1,000. There is also the potential for error or missed deductions because you may be too busy to pay more attention to the task at hand.
Working with an accountant may cost a bit more, but it comes with less stress, more accuracy and an opportunity for a smaller tax bill. A skilled accountant will be able to see inefficiencies in your operations and faults in your business plan. Often, a small business reaches out to an accountant when it gets too big to easily manage. While they can run operations well, owners are just too busy to keep track of their taxes. If you are spending hours completing your monthly or quarterly BAS, why not consider hiring the services of an accountant who can most likely complete it in two hours or less, giving you more time to spend on things that really matter to you.
In Victoria, the cost of living is around 15% lower than in NSW, so the disparity is reflected in accounting fees. If you engage an accountant to only complete your financial statements and income tax return, the next time you will speak to him could well be the following year. However, a valuable relationship could be forged if you opt to use a cloud-based accounting software like Xero. Your accountant will then see your figures in real time, allowing him to keep an eye on your business and provide strategies or advice tailored to your long-term plan.
You can opt to see your accountant every month for a monthly fee so that you both can regularly review how your business is going, but the truth is, a retainer could offer better value for money. This service would include unlimited advice either by phone or email on any topic such as leasing, regulatory implications of employment, etc. The relationship between an accountant and a small business owner usually begins as a tax return engagement but often grows into something more worthwhile.
Business advisory services may include such matters as an explanation of a cash flow situation and how to improve it, highlighting revenue trends and spending patterns, suggestions on how to deploy resources more efficiently and measuring progress against agreed KPIs. You may also measure the ratio of salaries to total revenue, among other key business metrics. Your accountant can also help manage your payroll and see how the ratio changes over a period of time.
If you want to apply for a business loan or overdraft, you will likely need an accountant to improve your chances of a lender saying yes. Just having an accountant may work in your favour because it shows that you’re serious about your business. Your accountant’s accounting software will be able to present facts and figures that can back up your funding application. He will be able to answer questions about revenue projections and expenses and help you choose the best type of loan for you, according to the terms and conditions and interest rate.
According to a 2018 CoreData study, 95% of small business owners who used an accountant saw this person as a trusted adviser who provided invaluable tax advice. Indeed, engaging an accountant may just be one of the smartest decisions you can make as a business owner.
As you look for different ways to grow and improve your business, seeking professional advice from a business consultant could prove to be an important and helpful decision.
You can click here to speak to business experts. We would love to help you formulate investment strategies and streamline your processes to take your business to the next level. Our goal is to help you grow your business, find ways to invest more and increase your productivity.