Discover what an accountant can do for you!
Most business owners don’t really enjoy bookkeeping or accounting. They end up doing it late at night or on weekends, when they’d rather be spending time with family and friends. Yet they carry on because they have a do-it-yourself (DIY) attitude and they think hiring an accountant is a luxury. After all, why not work a little later and do the books yourself?
That attitude needs to change. Engaging an accountant or bookkeeper is not a lifestyle decision, it’s a business decision. Investing in professionals – or changing the way you use them – can bring considerable returns.
They’ll keep control of your tax obligations, identify savings, and help you grow your business. And yes, as a bonus, they’ll give you back your weekends. You just need to use them in the right way to make sure your money is well spent.
Here’s what you’re missing
As a small business owner, you have to do a lot yourself. There simply isn’t the money to outsource much. In deciding whether or not to get outside help on something, you have to ask if doing it yourself creates extra risks or costs.
Here are the potential downsides of DIY bookkeeping and accounting:
- You miss out on tax deductions by failing to claim valid expenses.
- You fall behind with invoicing (and with chasing unpaid accounts).
- You underestimate your tax liability and find you are unable to pay.
- Tax returns and other compliance paperwork are lodged late, resulting in fines.
- Your bookkeeping ends up with mistakes that takes hours to fix.
- You don’t have reliable information to help you make business decisions.
Why you need an accountant or bookkeeper
We specialise in helping small businesses and we have clients who started off doing their own bookkeeping then came to us when the job became too big or when they started making costly errors.
There are many things an accountant or bookkeeper can do for your business but here are some key areas where they’ll help your business immediately.
Clean up your books once and for all
When business owners do their own bookkeeping, it often only happens when they can find the time. That’s not really giving your financials the attention they deserve and results in:
- data entry errors
- lost documentation (such as proof of purchase for expenses)
- missed tax deductions
- books that are out of date
If you engage an accountant or bookkeeper, they’ll clean everything up so you have accurate records backed up by supporting documentation.
Prepare tax returns thoroughly and lodge on time
Late lodgement of tax returns and/or payment of tax liabilities can result in penalties and interest charges. We’ve taken on clients in the past who’ve previously lost thousands of dollars this way. When you engage an accountant, you won’t miss any more deadlines. The good ones will work well in advance so that lodgements are smooth and stress-free. You’ll forget what it was like to dread tax time!
Improve your invoicing and cash flow
Your invoicing system is central to the health of your business. If you don’t bill efficiently, you won’t get paid quickly and that will leave you short of money. It sounds basic, but this factor alone undermines a lot of business success.
As an example, think of the plumbing business that services your building. About two weeks after they’ve been, they send an invoice, which gives you 30 days to pay. If you pay on time, their business is waiting more than six weeks for the cash, even though the employees who did the work were paid the week the job was done.
Get an accountant or bookkeeper to set up an automated invoicing system and you’ll be able to:
- send invoices quickly
- check at any time to see which ones have been paid and which haven’t
- give customers a choice of multiple payment methods
Get the power to make better decisions
When you have to do the books yourself, you often don’t get onto it straight away – other things come up that delay progress plus, the longer you leave it, the higher the chance of rushing and making mistakes. This means you don’t always have reliable, up-to-date information about your business.
When you fall behind, it limits your ability to manage well. You don’t know how profitable you are or how much cash you can afford to spend on improving the business.
Accountants and bookkeepers can also give you good advice on invoice payment terms, to help reduce the time you spend waiting on money to come in.
Boost your profitability
Accountants can help you unlock growth in your business. They’ll start by removing unnecessary costs and smoothing out your cash flow, but there’s even more they can do. They’ll figure out what drives revenue and profit in your business and help you improve both.
Engaging an accountant or bookkeeper is a business decision
Don’t let bookkeeping distract you from your core work. It’s not where you’ll add value to your business. A professional, on the other hand, has the expertise to:
- lower your tax burden
- avoid fines, interest and audits
- identify and eliminate unnecessary costs from your business
- help you measure and improve business performance
This will free you up to work on the business, which is where you’ll be able to make the biggest difference, plus you’ll be able to spend more time with family and friends, which is a really great perk of making a good business decision!
Other related blogs: