Accountants aren’t just bean counters anymore. Gone are the days of lumping them with tax duty and business activity statements. In the 21st century, they’ve become valued members of their organisations, driving cost efficiencies and identifying opportunities to streamline processes. Opening up honest and frank communication channels with your accountant is key to keeping tabs on the health of your business.
Here are five questions you should always ask your accountant.
1. Is ad-hoc accounting advice included in your fee?
When in need of financial advice, the worrying thought of “how much will this cost?” shouldn’t have to trouble any small business owner. Before engaging an accountant, clear parameters on what their fees include should be established. Nothing hamstrings a productive relationship more than a reluctance to pick up the phone and talk.
Further, if you’re dealing with a bigger firm, establishing who will be your point of contact, and what channels they can be reached on, will give you the confidence to reach out when you need. For example, does the accountant use Skype or some other VoIP service? Can you call them on their mobile? Do they respond promptly to email? All these questions will help create a solid ‘field of play’ for communication.
2. What accountancy areas do you specialise in?
Accountants come in all shapes and sizes, and some specialise in different areas. Certified Public Accountants (CPAs), for example, are more versed in business activities such as auditing, creating deep financial statements and making best-practice decisions. On the other hand, a Chartered Tax Advisor has much deeper tax compliance knowledge, while a financial advisor is better suited to help you plan investments or plan for retirement.
Whichever areas are important to your business, you should have the accountant to match.
3. What’s my break-even point?
The break-even point might seem like a simple thing to work out – sell more than you spend – but it’s not always that cut and dry. For example, sales costs can vary with volume or the ongoing cost of a promotion negatively affecting the business. An accountant specialises in analysing cost structure and working out break-even points. It’s worth investing in an accountant for this purpose.
4. Is my business financially healthy?
Much like a doctor’s check-up, an accountant can give you data to help assess your company’s finances. Further, they can benchmark that data against other clients in your industry and tell you how you’re standing. If changes need to happen, your account can advise you to concentrate on certain business areas, such as:
- Retaining existing customers
- Generating new business
- Reassessing your pricing strategy
Interested in knowing more about your business finance health? Take our financial literacy quiz to test your financial fitness.
5. What Technology Do You Use?
It might be hard to believe, but some accountants still use DOS-based accounting software. Why? Because sometimes people take the old saying “better the devil you know” much too seriously, particularly when it comes to business. An accountant who is stuck in the ’90s is unlikely to advise you on the benefits of newer technology, which could help you improve workflow and smooth out processes. Find an accountant who uses cloud-based accounting software so you can be across the financial side of the business and access data in real-time.
Having quality communication with your accountant starts from the first time you meet them. Accountants are very important to the continued success of your company, so it’s important you can get the best out of each other with open and honest dialogue.