An accountant can do more than just complete your tax return – they can help you build a more successful business. Here’s how.
A bookkeeper can record business transactions and financial changes that have happened previously. But for a good accountant, this data is just a springboard for business strategy and planning. Chartered accountant Bob Neill, Director of Seaview Consulting, shares the three things he believes an accountant should do for your business.
1. Identify key indicators for business success.
Because an accountant can see what factors most impact your profitability, they can set clear measurement indicators that business owners can check themselves very quickly, without having to review all the financial data or ask their accountants to check. This makes sure a business owner is aware whether they are staying on track or not and can move quickly to get things back on track.
For example, a Melbourne client of ours was buying into a business in central Queensland. Looking at the business’s financials, we could see that revenue was fairly predictable. That meant business success would be contingent on finding new sources of revenue and ensuring that costs didn’t exceed 40 per cent of revenue.
We identified four or five key indicators that the client needed to watch. When the bookkeeper provided new financial data, he was able to check these indicators in just 10—15 minutes. If there was a change of more than 5 per cent he called us; otherwise we checked in quarterly.
2. Verify business decisions.
Accountants can become the “check and balance” of decision-making. If any of your key indicators is changing – revenue falling, expenses rising, cash flow not tracking according to plan – it’s time to speak to your accountant about your options.
It’s also a good idea to get in contact if you are making any key business decisions, such as buying or selling major assets, taking on new debt, admitting new partners to the business, exiting key people from the business, changing premises, doing retirement planning, or if key people are experiencing illness in the family.
Even if the business is running smoothly, you should aim to meet every six months, so you can plan for the future.
3. Help you focus on your business, not your work.
Most small business owners start a business to follow their passion. But then the day-to-day activities of running a business tend to overwhelm them; they get caught up in doing, rather than planning.
Your accountant has the perspective and time to analyse what drives your business success. Often, their advice may be that the business owner can’t be the practitioner – the person actually doing the work. They need to elevate themselves and concentrate on the business side.
For instance, we worked with an environmental consulting business that was going through a period of growth. However, while revenue was increasing, profit wasn’t. The business owners and their staff were scientists by training and were more interested in doing the field research than looking at what was happening in the business itself.
We advised the business owners to take a step back – to move out of the role of scientists and into the role of businesspeople. They needed to delegate the field tasks and focus on business development. This included setting up a reporting framework, setting expectations for staff and monitoring billable hours, and looking at return on investment in the business.
As the strategy worked and the business became more successful, they were ultimately able to hire an office manager to handle the business side, so they could spend more time again on the scientific work they loved.
How do I find the right accountant?
Check whether they have qualifications and are a member of a professional association. These include the Institute of Public Accountants, CPA Australia and Chartered Accountants Australia and New Zealand.
Find out if they have experience dealing with the type of business you run. Ask how they will communicate with you and how they think they can add value to what you do. Ensure they are approachable and that you feel comfortable talking with them, because this will give you confidence to raise issues and invite discussion.