Lielette Calleja: Let’s get one thing straight, no one starts a business to just skimp by.
You want your business to make a profit, scale, and thrive. Small businesses have spent much of the past year scrambling to adapt to extraordinary circumstances.
Changes in consumer spending, unforeseen lockdowns, increased competition all contribute to cash flow disruption.
As a business, do you continue to make day-to-day decisions operating with blinkers and blinders and rely on old-school thinking, “If I have money in the bank, I must be doing OK”?
Not to burst your bubble but operating this way is irresponsible and will eventually create a cash flow crunch which could have been avoided by working closely with your accounting ProAdvisor.
Even the best entrepreneurs and small business owners admit that just having their pulse on the business is not enough anymore. They are too busy working in the business and juggling many hats that they are missing opportunities for improvement and future growth.
At All That Counts, we see a significant shift with our clients, who are now taking up our consulting and ProAdvisory services.
The challenge for most accounting professionals is that every single business could probably do with more advisory.
Still, it becomes a case of too much opportunity and too little time, and not enough accurate data to provide the right advice.
We are in good stead that many of our clients are using QuickBooks Online. We understand that compliance is the necessary evil, but it’s not what drives businesses forward. I find it disturbing that many companies use their accounting software as a means for compliance to tick a box rather than a powerful lever that gives them visibility and insights on how they can shift gears quickly to drive growth or save them from a cash flow crunch.
Globally, it’s no secret that business owners want to find ways to future-proof their business to protect their livelihood, family and lifestyle by riding out sudden fluctuations.
But while they are still busy working in the business and likely not to have the skill set to do it themselves, they will need to think ahead and seek help from an accounting ProAdvisor.
Understandably, we find that some business owners can somewhat be reluctant to hand over their bookkeeping and accounting work as they feel they will lose control.
The challenge is if you don’t let go and allow your advisor to support you in critical areas that you’re not an expert in, you could be stagnating your growth to propel and scale and sadly lose more than just control.
Accounting advisors are like doctors – there are many different kinds. Some specialise in tax, compliance, and audit, while others may specialise in bookkeeping, management accounting or CFO. Diagnosing what type of advisor you need is again like working out what kind of doctor you need to treat your symptoms.
Accounting advisors should be working with their clients consistently throughout the year, and not just when it’s time to prepare tax returns.
The work we do during the year as advisors with our clients sets them up for success at tax time. Recognising the challenges they experience throughout the year from their accounting software to tax deductions, is an opportunity for us to help them before things get out of control and have a long-term negative impact on their numbers.
We love working with clients who use QuickBooks Online, especially around tax time, as we find we can get through the end-of-year tasks more efficiently, which enables us to get them tax-ready a lot quicker.
Some of our favourite tax time-saving features in QuickBooks would have to be:
- The bulk reclassifies transactions function – this allows us to quickly correct entries assigned to the wrong accounts in one click of a button.
- GST reporting – there is no need to spend hours doing a year-end reconciliation as any out-of-period adjustments or entries are carried through the current BAS quarter or month.
- Month-end review – this gives us a bird’s eye view of all accounts to be reconciled and their status
- STP – year end finalisation for Single Touch Payroll has never been easier
It’s no surprise that many hands make light work and partnering with a QuickBooks ProAdvisor who has the skill and expertise to guide you through your business journey will set you up for lasting success.
But before you jump right in, here are some questions which might like to consider:
What type of advisor will my business need?
The modern-day, efficient ProAdvisor has the tools and resources to work from anywhere (locally and remotely) to meet your everyday business demands. Your advisor needs to understand the importance of communicating clearly with you and responding quickly to your out-of-the-box situations and not just the regular compliance work.
Cloud-based technology like QuickBooks Online gives your Advisor access to the numbers they need so they can provide your business with timely, right advice and support around the following areas:
- Revenue growth
- Tax minimisation
- Improving profits
- Cash Flow management
- Borrowing and lending
- Budgeting analysis
Remember that good advice will always be reliant on sound data, and your ProAdvisor should also be skilled to verify and reconcile your accounts before they give you any advice.
How do I get the most out of my advisor?
Our clients come to us because they know that no one understands their business better than us. We have the skills, intuition, and data to educate them on what is holding their business from achieving greater profits.
QuickBooks Online allows us to segment financial data a dozen ways. The key for us is to capture all the data points that contribute to revenue and profits. It’s important for us and our clients that we can easily extract current and correct financial reports so they can make quick decisions in their business and life.
What kind of questions should I ask my advisor?
We all know that for business to be successful, we need sales. It’s pretty easy, right? It’s also essential that the sales generated in the company are profitable.
Yet how many truly know which products or services are the primary contributors to their bottom-line and which ones just are not?
Too often see companies promoting products and services that are outright losing money in the business while the most profitable items sit idle.
Maintaining a competitive edge in the market is much more complex these days, with more businesses moving or introducing e-commerce as part of their sales channel.
We saw a need to initiate pro-active discussions with our clients to ensure they were equipped with the right numbers before they jumped into any marketing agency contracts or expense commitments.
Some of the typical questions we cover off and answer are:
- What marketing budget can they afford?
- Can they increase ad spend, or do they need to decrease it?
- What’s their cost per lead, and more specifically, what’s their cost per acquisition? In other words, how much does it really cost them to acquire a customer?
- Can they afford to launch a new product or service into the market, and if so, when is the right time from a cash flow perspective?
- What is their break-even point?
- When do they start making a profit?
In addition to the above, we were also faced with typical daily questions from our clients such as:
- Can I afford to hire a new employee?
- Can I afford to move to bigger premises?
- What is the impact on my bottom line if I stopped working with problematic customers?
- Can I increase my salary?
- Can I pay for a new vehicle?
- Can you help me prepare a budget?
How can my advisor help my business prepare for tax time?
The key here is to work with your advisor consistently throughout the year, not just when it’s time to prepare your tax returns.
Ultimately knowing where you stand financially will help your business propel growth, identify opportunities, and give you the confidence to make decisions at the right time.
So next time you catch yourself wondering how you can improve your cash flow or drive more customers to your business, you know it’s time to get in touch with your accounting advisor because, after all, you didn’t start your business to just skimp by.
Lielette Calleja is highly regarded in the accounting and bookkeeping industry, with a long history of advocating for the profession.
She is the founder and director of All That Counts, a leading and multi-award-winning firm with over 25 years of budgeting, financial management, accounting, and bookkeeping experience.
Before starting up her own business in 2004, Lielette held senior finance positions in the commercial private sector, primarily in the entertainment and music industry.
Lielette recently joined The Institute of Public Accountants (IPA Group) in the newly created role of AAT Chief Accounting Technician, where her focus is primarily around advocacy and technical professional development programs for accounting technicians, and development of the Accounting Technician brand.