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What does an Accountant do anyway?

Posted 22/8/2016

Recently I was asked this question which was followed up by “Tax and stuff is it?”Your accountant can help you review, analyse and improve your business performanceYour accountant can help you review, analyse and improve your business performance

The real question should be “What CAN my accountant do for me?”

Yes, sure, an accountant can do “tax and stuff” but I want to focus on is this so called “stuff”.

I was shocked to find out how many sole traders and business owners only interact with their accountant once a year at tax return time or when accounts need to be filed. These are very important roles of the accountant but are you and your business missing out by not demanding more?

Of course additional services are likely to have a financial cost, but most accountants will now agree a fee up front so that you can decide if the cost is worth the potential benefits to you or your business. If you don’t like the cost then don’t proceed or look elsewhere for a better price, but be careful as sometimes you get what you pay for!

“Fail to Plan and Plan to Fail” is a phrase that I often heard when undertaking the Limerick Enterprise Acceleration Program and it rings through for many businesses. While a detailed business plan may not be necessary for every business, some element of at least annual planning is essential. Most accountants have extensive experience in budgeting, forecasting, financial modelling and cashflow management. These can be done on Microsoft Excel or by using some of the online applications such as Xero, SortMyBooks or BigRedCloud.

Many people are reluctant to create plans in case they fail to met expectations, as they could then feel disheartened or use this perceived failure as a stick with which to beat themselves. This should not be the case, in fact if these forecasts are revised at least quarterly it is better as it enables you to take changing circumstances into account. For example you may have gained additional business that wasn’t foreseen or have lost a large client or great sales person.

“Cash is King” is another phrase I often hear and we all know as true. Cashflow planning is of paramount importance to ensure bills can be met and staff can be paid. Many small businesses survive from week to week or month to month and at certain times in the year struggle to make payments. With some cashflow planning and the assistance of your accountant life can be made much easier and decisions made much quicker as the impact on your cashflow will be immediately measureable.

Your accountant should be your trusted advisor and the first person you call for business advice, but if you think they are telling you something because it’s what you’d like to hear, then it is time to move on. Honesty and integrity are the core values of good accountants, even if it means that I may loose a client, I will always give them an honest opinion because if I don’t then I am letting myself, my profession and my client down badly. Depending on your accountants experience they can assist with developing business strategy and performing market research or at least sense check any work that you have performed.

Feasibility can be ascertained through a relatively inexpensive engagement with your accountant, if you plan on investing on expensive new equipment or a new business it is always a good idea to run through the rationale and numbers with an accountant who is not emotionally involved as you may be.  

Regardless of the size of your business it is always a good idea to have good procedures and controls in place, the earlier you do this the better as it can be more difficult to change old habits. Having someone observe the way you operate, and suggest improvements, can generate enormous efficiencies in your business and help deter and prevent theft and fraud.

By having a good accountant assist you when applying for any grants, bank finance, or other funding such as crowd funding or EIIS Investment (formerly BES), it will greatly enhance your potential for success. When I worked with the Pinnacle BES Fund I saw many good business ideas applications ruined by the submission of terrible business plans that clearly had not been prepared by or reviewed by an accountant.

Many business owners are not aware of the funding opportunities in the market place or the government incentives available to them. Your accountant can look into these for you and suggest any that may be appropriate for your business.  

As the tax return deadline is approaching there is no better time than now to discuss the services mentioned above with your trusted accountant.

Alternatively if you would like to discuss these services with us please contact us today for a no obligation free consultation.

Xero Certified AdvisorXero Certified Advisor

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