Not sure who to trust for business advice? If you only use an accountant for taxes then you are overlooking an important resource. An external accountant can provide vital knowledge about your industry and its key players.
Just a quick catch-up will give you an idea of how your business is doing relative to competitors. By benchmarking in areas like sales, market penetration, production costs and overheads, you may uncover changes you need to make to improve profitability.
Although taxation remains their bread and butter, modern accountants have evolved into business consultants focused on finding different ways to add value and save you money.
Five areas where they can deliver cost savings include:
An accountant can design and implement an effective record-keeping system for your operations. This will save you time and allow you to concentrate on building your business.
2. Cash-flow management
Essential to the survival of any business is a projection of cash flow that will occur in the next 12 months. An accountant can work with you to produce a cash-flow statement that shows when and how much money is coming in and going out. You can then decide whether you will need to reduce costs or increase prices for your cash flow to remain positive.
3. Personal finance
Accountants have knowledge on tax-minimisation practices, business valuation, due diligence and estate planning all crucial elements to establishing a cost-effective business exit strategy.
However, only accountants with an Australian financial services licence or those who are authorised representatives of such a licence holder can provide this type of advice.
4. Business planning
A business plan steers you toward your goals and helps to secure funding. Underpinning this plan are your assumptions about the environment around you.
Accountants can add value here by confirming or challenging your ideas and beliefs. This will ensure your plan remains achievable, realistic and up to date in the eyes of potential investors.
5. Managing growth
Most businesses will need to plan for increased sales levels. Higher outgoings from growing spend on staff, office or warehouse expansion, production and logistics will need to be met before money arrives from your sales.
An accountant can model costs and help you evaluate alternatives to finance your growth.
Accountants have access to resources that are not readily available to businesses. Although their advice comes at a price, they can prevent costly mistakes and lead you down the path of success.