3 ways your accountant can add value and help grow your business

Accountants are seen by many as a necessary cost to be incurred in order to be tax compliant.  Here are three things accountants can help with that can be of real value to a business.  Each service described below brings the involvment of the accountant deeper into your business resulting in even greater value as s/he learns more and more about your business and “how you do things”.

1. Business planning

Every business needs a plan regardless of its size.  A bigger business may need a more complex plan than a smaller one; a very small business owner might keep the plan in his/her head but its a plan nonetheless.

Your accountant can take all that information swirling around your head and collate, formulate and present it in standard way. This means that readers of your business plan will be able to see at a glance the key facts about your business and find more detail if they like what they see.

A good business plan will have forecasted profits and cashflows. Yes, there is a difference. You might be making a profit, but not be bringing in the cash. This is something many people new to business have difficulty with and casues problems when trying to compute cashflow forecasts. A good accountant can do this for you.

A well prepared business plan is an essential tool as it not only points to where you hope to be it can also be used to measure where you’ve been.  This is a useful learning exercise to enable you to develop your planning skills and plan more accurately as the business matures.

2. Financial management

Financial management goes hand in hand with business planning.  A business plan contains detailed budgets which are then used to control expenditure and drive sales.  It will help determine cash requirements and measure performance of the business.

Too many businesses measure performance much too infrequently, ie annually.  That measurement is too often for the sole or main purpose of calculating taxes and usually comes too late to be of any other meaningful benefit.  It also means that the tax bill can sometimes be a bit of a shock.

An accountant can prepare periodic management accounts – six-monthly, quarterly, monthly.  These should show actual performance of the business measured against your forecast.  It helps you see exactly how the business is performing – better or worse than anticipated – and take action to ensure budgets and targets are kept.  Estimated tax liabilities can also be calculated removing the shock element mentioned above.

Involving your accountant in the financial management of your business means they will know a lot more about your business and the issues you have.  They will then be in a better position to give you ongoing, continous advice – adding value.

3. Systems & controls

All businesses have systems and controls at some level.  Some formal, some informal.  As a business grows more focus is placed on its controls as inevitably the business owner must delegate authority to employees.  For example, the receptionist or secretary may be given responsibility to source and order office supplies.  What controls are needed to prevent him/her ordering things for their personal use?

The most over relied on control is the business owner retaining sole control of the bank account.  This is important but it is not always enough.  If a fraud occurs the owner may still have to pay for the goods.  The only remedy may be to pursue the fraudster through the courts. This is very costly.  The key, therefore is prevention.

A good accountant can advise and design suitable controls and systems appropriate to your business.  To follow on from the example above, a purchase order system which requires checking and authorisation prior to ordering can be effective.  Budgets and delegated limits can also reduce impact should one control fail.

Let us make life easier for you and give you an accountancy service with a difference.  Book a free consultation to find out how.

Leave A Response

* Denotes Required Field