As a small business owner - when to engage and what to expect from your accountant?
So, you’ve set up your business and it’s now up and running.
Hopefully, you’re steadily and surely growing your customer base and you’re doing all the right marketing activities; set up your website, started advertising, attending networking meetings, asking for referrals etc.
And you’ve most likely invested in tools and inventory in order to deliver your product or service.
You may have even taken on a bookkeeper who’ll prepare and lodge your BAS every quarter.
As the year rolls on, all of a sudden, it’s tax time!
Then it dawns on you – I don’t have an accountant – I need an accountant to lodge my taxes.
In many cases, this is the first time a business owner has any dealings with an accountant – that is, when it comes time to lodge their first tax return.
In a frenzied rush, owners will run around looking for an accountant to take on their books – typically they will search online or ask family and friends for a referral.
In the majority though, the owner will turn to the accountant who’s possibly looked after them doing their personal returns.
However, is that the best choice?
Engaging an accountant cannot be left as an afterthought. If anything, teaming up with a good accountant needs to be priority one at the point of starting the business.
The best approach is as follows.
Start early
Don’t leave the search for our business accountant until it’s time to lodge tax returns. While your bookkeeper is doing a great job in preparing your BAS and managing the day to day transactions, they may not be familiar with other aspects of finances and business strategy.
And while an accountant who’s been looking after your individual returns may seem the obvious choice, this may not be the best option.
Having a fresh and objective pair of eyes looking over your business will bring new perspectives and offer insights that someone who is very familiar with you as an individual, may not bring.
Starting early to look for an accountant will also give you time to properly evaluate the accountant – rather than having to make a quick decision because you are now late on your taxes.
Involve your accountant from day ZERO
What do I mean by ‘day ZERO’?
This means BEFORE even setting up and starting your business, please talk with an accountant first.
There is a myriad of issues involved in setting up a business as well as the ongoing running of the business.
Knowing these will help you as the owner prepare for the times to come rather than just reacting to them as they happen – which is what most businesses tend to do.
Even when a business owner takes the time and effort to engage an accountant early in the process, many will still only deal with them at tax time.
An accountant has as wealth of knowledge at their finger tips and they are very well connected – accountants are no longer just ‘bean counters’.
Here are some important discussion points that you will have with your accountant:
What is the best structure for my business – sole trader, partnership, trust, company etc. – a good accountant will be able advise on this based on current and future needs.
What insurances will be needed to safeguard the owner, employees, customers and the business as a whole.
Staffing and wages – when and how will the business take on employees and what are the compliance requirements around this.
Employee contracts – structuring proper employment contracts and conditions to ensure there won’t be any possible breaches sometime down the track if you had to let employees go.
Effective tax minimisation strategies – minimising your tax is an important objective, yet, it should never be looked upon as an end game in itself.
Ongoing involvement
As you can see, an accountant has so much to offer by way of advice, guidance and direction.
Merely chatting to them once a year just to do taxes is a huge wasted opportunity – which many business owners are guilty off.
At least every quarter, meet with your accountant to review the state and progress of your business.
Let them know what’s working and what’s not – share your challenges and victories with them – this way the accountant starts to build a more holistic view of the business rather than just the P&L and Balance Sheet.
And finally, as the saying goes – you don’t know what you don’t know.
There may be new tax legislation that could affect your business, new ways to automate your invoicing and debt collection and so on.
Chances are you may not be aware of this – yet it’s highly likely your accountant will know about it.
So, you can see, there is so much more to gain by involving your accountant early in the business phase.
However, the relationship between business owner and accountant is only as good as the time, effort and patience each of them invest in each other. It’s never a one-way street.
Our aim is to ensure the right help is available for our clients.
This is what we do – we work with our clients to understand their financial needs and we work to figure how best to meet these needs and in the process, we help our clients to better understand their financial world.
At Aperture Accounting, we feel our job is to help shape and design a better financial future for our clients.
To find out more, call 1300 APERTURE or 1300 273 788.
