Most business owners have a priority of earning profit from the business. It’s natural and expected, not unless you’re a charity, you are often in business to make a dollar. Whether or not how much the business earns may not be important in the beginning because any amount is fine as long as it is profit. However, in the long run, it is important that the business owner is on top of the profits, as well as the capital spent on the inventory and other expenses to improve the business. To understand your position, your business coach, accountant and bookkeeper are all valuable and important – in fact, they ARE essential.
Of course, business owners always look to expand their businesses to continuously earn profit. They strive for improvement to keep up and eventually surpass competitors, and for this purpose, they usually augment their earning power through getting in touch with their spending power.
It is not a secret that to make the business more successful, it is inevitable that more finances will be spent towards increasing capital and inventories, improving operations, and maximising personnel. To effectively pull off the act of spending more to earn more, business owners used to go to their bank manager for advice. However, in my view, those days have passed and business owners are wary of their bankers, in case their honesty with their bank backfires on them.
The Value of Accountants
Savvy business owners understand they have a very sound financial advisor lurking within their ranks: the accountant. More so than banks, the accountant already has intimate knowledge of the business’s finances as well as the business owner, and their primary interest is that of the owner and business. He or she will already know which areas are doing well, which are taking in losses, which areas should be improved upon and so on. The accountant already knows the specifics of the business so as to provide the business owner with an idea of what strategy to do next.
And because of the personal attachment developed by the accountant to the business throughout its existence, he or she can provide one thing which the bank cannot: genuine care. The accountant will be sure to take the business’s improvement to heart and will provide more than adequate advice toward the betterment of the business. Further, the business owner should be able to trust his or her accountant more because of the rapport established by working together.
Likewise, a business coach like myself, with accounting qualifications and tonnes of experience, can also support business owners in the financial aspect of their business. In fact, I often work in conjunction with client’s accountants – asking them relevant questions or bringing important notice to the accountant of things which have occurred, or are about to occur.
I should also mention at this time the trusty bookkeeper. This person is at ‘ground zero’ and has daily knowledge of what is occurring in the business. Your accountant, coach and bookkeeper can work together in a productive and effective way and be your team of advisors and supporters to ensure everything is happening in the right way. Although I do have accounting knowledge, I am not a licensed accountant or tax agent, so I don’t give tax advice – but I do know when to send a client to their accountant and get expert accounting advice.
So, remember, the time to chat with your accountant is not only when it’s time to get your tax done. It may be good to touch base with them when:
- You’ve done something a little different, such as traded in a vehicle and unsure how to treat the transactions.
- You’re considering buying a new business; a review of the existing businesses’ financials is critical as part of your due diligence.
- When you’re about to do something important, such as buy a vehicle. Current tax laws, timing and finance methods (relevant to your GST registration) all play a part; talk first before you proceed.
- You’re a trade business and have BSA licensing to adhere to.
- You are a sole trader but your income has grown somewhat; a review of your accounting structure might be wise.
- Your bookkeeper is unsure of how to code something; get some solid advice.
Finally, if you are talking with your accountant and they are talking ‘Accountant’ (versus simple English) then don’t be afraid to say “Sorry, I don’t understand what you mean – can you explain that please?” Ask questions, seek clarification and tell them if you need something further, or want more information. They are not mind readers; a good relationship will encompass open communication by both parties.
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