Most small business owners want to increase their profits. Not many use their small business accountants to assist them with this process. In the old days, accountants would be used to purely do tax and advise clients how much money they had made or lost usually via the profit and loss statement.
These days, our profession has a much bigger role to play and here are some things that modern small business accountants are doing with their clients to help them increase their profits.
Figure 1: Is your accountant passing on great business tips?
1. ensure you are using the most up to date accounting system
Ensuring a good relationship with your accountant will be made much easier if you are using the best accounting system that they can easily access with your permission. Gone are the days where files need to be sent backwards and forwards and any journals that are done don't have to be entered several times once year end has been finished.
If you or your finance team are having difficulty allocating a transaction or if they just need some help, most accounting firms will have someone who can view the program via the web and provide the necessary support. This is known as cloud accounting.
Most small businesses have, or are actively moving to cloud based accounting systems and your accountant should be able to provide advice as to which one will best suit your business.
Popular programs include Xero and MYOB Live. Of course, many other programs are migrating to the cloud.
2. strategic planning
Having small business accountants who understand your business and can provide assistance running planning sessions can provide many benefits. As an outsider, they maybe able to provide insights into areas of your business that you might not have thought of.
A big key to this service is the accountant knowing what your end goal is, not only on a business level but personal level as the two should be aligned.
Modern day small business accountants Sydney offer this service and ensure that whenever you contact them throughout the year with any questions the answers tie in with your end objectives as much as possible. A business plan doesn't need to be 50 pages long.
One page strategic plans are very helpful and can assist business owners immensely if run in a structured way and properly documented.
Figure 2: Getting great advice is more than just tax these days.
3. cash flow forecasts including 3 way budgets
A good business accountant knows how to do a budget. A great small business accountant Sydney knows how to do what is known as 3 way budgets which not only have a cash flow forecast but a balance sheet and profit and loss budget as well.
These are more accurate, explain how your profits turn into cash and can be used as a wonderful tool when assessing your financial goals including business growth outlined in Point 2 above.
4. understanding business valuations & how to buy or sell a business
Knowing how to value a business is a skill and has a lot more to consider than just multiplying a number by a capitalisation rate. An accountant who does small business valuations regularly can actually offer a number of very useful insights that not only increase the business value but also its ability to make more profits. This can lead to greater cash flow and of course to a business that is easier to sell.
Any exit strategy that is required in Point 2 above can also be referenced back to the business valuation.
Accountants that are also very experienced business valuers can therefore be an added bonus when it comes to assisting business owners to grow their enterprise and wealth.
Fugure 3: Open for business but what is it worth?
5. tax PLANNING & minimisation
Whilst tax has been a common service for a very long time, accountants should still be offering this service and meeting with their clients more than once a year and preferably quarterly as a minimum. All clients should receive tax planning advice unless of course there is almost no tax to pay.
6. business advisory & what the numbers actually mean
By now you have probably heard that accountants should also be business advisors. However, what does a business advisor do?
A business advisor analyses your business numbers and explains what they mean and what will happen in terms of profits and cash flow if you actually change them.
Better still, they will provide strategies to help you improve what is known as Key Performance Indicators (KPIs) which again will tie in with Point 2 above.
The role of an accountant is changing quickly and as technology improves so does the range of services being provided by accountants.
Like any business, the profession can adapt and stay relevant or it can bury its head in the sand and perish.