When you’re running a small business, budgets are usually tight. So the thought of hiring an accountant may seem anathema. Yet hiring an accountant can not only save you money and improve efficiency, it can also greatly assist in wealth creation. Here are six ways that an accountant can help your business.
1. By reviewing your business for efficiency
A good accountant will review your business’s entire financial structure for where improvements are needed. They will look at outgoing expenses, overheads, and labour costs, and see where cuts or savings can be made. Perhaps you’ve been overpaying suppliers, or maybe there are cheaper alternatives to some costs you’re not aware of. The more they are able to save, the bigger your profit margins will be.
2. By preparing financial statements and audits
One of the best uses of an accountant is to help you create your periodic financial statements and prepare for tax audits. Most small businesses are grateful to have a professional to deal with the huge mountain of BAS and GST and tax returns. However, the best accountants for small business won’t stop there. They will use this as a springboard to see where your financial structures can be improved. They’ll analyse your statements and see patterns or recurring financial problems that can be fixed.
3. By using projections for your business’s future
Accountants can set up a solid financial plan for your business that is backed up with realistic data. This is based on a carefully researched projection of what your business is capable of, and includes goals and milestones. Having a plan to work with gives your business greater focus and security. It means you’re not scrambling to stay in the black but can plan for growth with clarity.
4. By organising the books and setting up reporting
When you’re working on the frontline in the fast and furious day-to-day running of a small business, it’s very easy for financial records to be sporadic and thrown together. An accountant will organise all your books and set up an easy reporting system. This will allow you to instantly view your finances at any given time and get a clear idea of where your business is at. They can also establish a financial calendar for invoices, taxes and debt payments so all your important cash flows are always visible.
5. By reviewing your debts
Debts are usually part and parcel of any small business.
A professional accountant will review each one and identify which are the red flag debts that are seriously affecting your bottom line. They will then come up with a plan to eliminate the worst debts, and strategies to pay off debt faster so your business isn’t trapped in a debt paying cycle.
6. By helping to manage growth
The ultimate goal of all small business is to expand. But growth needs to be carefully managed and planned. If you grow too quickly in terms of sales and customers that can be dangerous if you don’t have the staff and infrastructure ready. Equally, you don’t want to start increasing your outgoing spends before revenue is coming in, otherwise you’ll hit a severe shortfall. A good accountant will help you carefully plan for growth and ensure you’re ready to meet growth in terms of staff, logistics and infrastructure.
So, for these reasons, accountants are actually vital to the success and viability of any small business. They can make your business far more efficient, help you save on costs and increase profits, and help you get to the next level.