You might think this is a strange thing for an accountant to say, but any accountant worth their salt really shouldn’t cost you anything.
I’m not saying here that their services should come free of charge. What I mean by this is, if they’re doing their job effectively, they should be boosting your bottom line enough to make their services at the very least, cost-neutral. A great accountant will save or make you money over and above the cost of their service.
Working on the finances of a business shouldn’t just keep you compliant with your legal responsibilities. An accountant, in my opinion, holds a greater responsibility to you to evaluate the figures and help steer your company towards greater profitability and growth.
This is why choosing the right accountant matters. You need to find someone who adds value to your business and becomes an integral member of the finance and management team.
Here are a few ways a good accountant should work to save or make you money:
It should go without saying, but at the very least your accountant should keep on top of timely filing of your accounts to meet tax deadlines and avoid late penalties. But are they proactively working with you to make sure that happens?
They should be reminding you of what is needed and when to ensure accounts are prepared in plenty of time – and chasing up information if needed.
I know it’s not always my clients’ top priority to get invoices, receipts and expenses over to me, but it should always be mine. I make no excuses for wanting to tie up the books before a deadline looms as last minute rushed accounts can leave you open to slip-ups.
Having a professional accountant looking over your paperwork should give you the peace of mind that, not only is everything filed on time, there are no loose-ends and everything is present and correct so there’s no risk of additional fines for careless mistakes.
Keeping you tax efficient
Tax law can be a minefield of complicated rules and regulations. Whether you’re a sole trader, contractor or running a Limited Company, an accountant is invaluable in helping you navigate your way and ensure you’re operating in the most tax efficient way.
Are you clear on the rules of what you can claim in expenses? Has your business grown to a point where you should consider changing from a Sole Trader to a Limited Company to help you save on upper threshold tax liability and National Insurance costs?
Your accountant should act as your adviser on these issues and help you minimise your tax bill wherever possible.
Offering cash flow advice and forecasting
There’s no-one better placed than your accountant to help you identify potential holes in your cash flow. Cash flow mismanagement can cripple a business, and it’s reported more than 80% of businesses fail due to severe cash flow issues.
Having a professional accountant keeping an eye on the monthly figures and helping you forecast cash flow is an invaluable asset that really can make the difference in whether you sink or swim.
The longer they work with you, building an overarching vision of your financial year will also enable them to identify peaks and troughs in income and expenditure. This can help you shape your business plan and implement more robust procedures to bring in money when it’s most needed. Do you need to up your marketing game to manage a quiet season, for example. Or is your sales process strangling your cash flow? [LINK TO ARTICLE]
Understanding the numbers enables you to forecast, and more importantly, plan to achieve a healthy balance throughout the year.
Accurate record keeping will highlight areas where you can cut costs. Could you refine your supplier orders to buy bulk and save money? Would it cost you less to outsource some work, rather than paying an annual salary? Or vice versa, would it be cheaper to hire an employee rather than hire in external contractors?
There are a multitude of ways companies can cut costs if they evaluate the expenditure and an effective accountant should be questioning the numbers and helping identify those opportunities so you can increase your profitability.
If your bottom line reached an all-time high in a particular period, why was that? Your accountant should be highlighting profitable activity, so you can pick up on what yielded the greatest return and focus on doing more of the same.
Growing your business
Experienced accountants will have worked with businesses of all sizes, from start-ups to established successes. They will have an in-depth appreciation of how a successful business works, and why. This is where their input and advice can be as valuable as a business coach in helping you develop.
Combining all of the above, from identifying your most valuable clients, cutting costs and making sure you’re running at maximum efficiency to monitoring your finances and setting realistic targets, accountants can support your business growth.
So, next time you’re evaluating your accountancy support and considering whether your accountant is worth their fee, think about how much value they’ve given you in terms of saving or making you money through their advice, guidance and service. Have they given back the cost of their service or more?
Get Smart can help your business become more profitable, so YOU can fulfill your dream. Take the first step today by telling us what you would love to achieve here.