A bit confronting I know (for Accountants and Business Owners alike), however it is a question that we are finding more and more business owners asking, so lets see if we can come up with an answer.
We all know that we need a great Accountant – but why? Many small business owners view the Accountant relationship as one which hinges around tax minimisation and making sure the tax return is being lodged each year. This relationship is essentially driven by the need for compliance with government rules and regulations and is becoming an increasingly price sensitive service. Particularly given that many small business owners believe that much of the compliance work is already done in the preparation of the Business Activity Statements (BAS’s) throughout the year.
Would you go to your Accountant if you didn’t have to lodge a tax return? If you answer No to this question then it appears that you may have a typical compliance relationship with your Accountant.
So what is the alternative?
The alternate relationship is one which is built around involving your Accountant (and their associates) in your business, helping you grow the business and develop it as a vehicle for wealth creation. This involves the Accountant providing services that add value to the business, more of a Business Development relationship as opposed to that of just Compliance.
Business Development services include;
- Reviewing the business plan
- Designing business systems that produce timely and accurate financial reports
- Tax planning
- Documenting bookkeeping procedures
- Design of standard management reports
- Preparation of the annual Profit & Loss budget (with monthly variance analysis)
- Cash flow analysis
- Business benchmarking (specific to your industry and region)
- Retirement (Succession) planning
- Business valuation
- Business investment analysis
- KPI (Key Performance Indicators) setting and review
- Business structuring or restructuring
- Wealth creation strategies
Tax Returns are here to stay so there is no getting away from some form of compliance work that needs to be done. However, if you want to move towards a business development focussed relationship then one thing to get right is the bookwork. Make sure you have timely and accurate figures on the performance of your business. If you are preparing the BAS each quarter then you should constantly have a complete set of (balanced) books that your Accountant can review with you on a regular basis. If this is a struggle then work with your software consultant to ensure that this platform is in place.
So is your Accountant necessary? – well the answer is a definite – Yes. However – it comes down to how you choose to involve your Accountant in your business – you need to decide what it is that you want from your Accountant and then take the initiative to ask. You may You may even have an excited Accountant on your hands so be prepared!