Public practice accountants serve a crucial role in the success of small business. They are more than bean counters, they are bean growers. The good firms will provide a number of key services to small business owners, each with a clear a distinct purpose; timing; and benefit. Below is a list of these services, including a short description of their purpose and how they work. But first…

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Business Strategy

Do you have a goal you are trying to achieve?

Do you have a plan?

What is your end game?

How to do intend to reach those goals? These are all questions which should be asked FIRST. Yep, before you even start spending and making money; you need to have a clear strategy in place. You are 10% more likely to achieve your goals if you write them down… and you are another 10% more likely to achieve them again, if you tell someone like umm…your accountant! A business plan is great place to start…it doesn’t have to be over the top, instead a simple, easily understood “guide” to why, how and what you do (we like Simon Sinek’s approach…check out the vid). This has the purpose of keeping you focused and motivated. Your accountant has years of experience, has seen many business come and go, and knows the recipe to success. They will sit down with you to develop your KPI targets, and feedback on your and provide a clear target to reach for.


Business Structuring:

Choosing the right business structure is critical to achieving your strategy and end goals outlined in your business plan. Your structure, whether a partnership, trust, company, superfund acts as the vehicle which will take you on the road to success. It’s important you choose the right one, to help you achieve your goals; whether they be; growth, minimise tax, take-over your competitors, add new owners, and eventually sell to interested buyers or pass your legacy down to the next generation.


Forecasting:

Cash flow Forecasting / Budgeting is something you should do all year round. For a business to survive it must have sufficient cash on hand to meet its short term obligations. Typically a “master budget” is initially created, which incorporates your business’ performance targets, direct and variable expenses and capital expenditure plans. Forecasting can be used to determine the effects of capital expenditure, and then project your “return on investment”. But don’t put it in the bottom drawer once it is done, you need to REVIEW your performance against it (at least monthly).

One of the major benefits of actively forecasting cash flow, is because it can tell you months in advance if you require additional finance. It gives a lot of confidence to your bank (or investors) to know that you are in control and are capable of managing your cash flow, so much so that you are applying for finance, months before you actually need it. Compare that to an applicant who goes to the bank and days “I’ve just ran out of money” can you give me some? Hmm I know which horse I’d back…..

Tax Planning:

Tax Planning services are performed before the end of the financial year. All proactive accountants want to make sure their clients know in advance what their tax position is going to be. Giving this glimpse into the future means, that a). tax minimisation strategies can be implemented, before it too late, and b). tax obligations can be planned for 12 months in advance and included in your cash flow projections. This service is typical performed between Feb and May (i.e. before 30 June), and involves preparing a tax estimate. Capturing your “actuals” and using your budget/cash flow forecasts to estimate what the 30th June position will be. Once your tax position is estimated, you can make decisions at executive level about the detailed strategy options which are presented by your proactive accountant. There will always be a trade-off between how you allocate your resources (ie spending money to save tax, or keeping your debts down and taking a tax-hit). As the saying goes, you will either pay interest OR tax. They are inter-related. Getting the mix right is important…and requires careful planning.

Management Accounting:

Made up of two parts,

- Performance Measurement: Once you have developed and implemented your strategy, you need to measure your performance. Firstly, measure your performance compared to the KPI targets you set for yourself (both financial and non-financials KPI’s). Secondly, in a rapidly changing business environment it’s wise to compare your performance against other business’ in your industry. Using benchmarking data, you can compare against similar sized business in your region. This provides great insight to see if you are competitive in your industry. Measuring your performance regularly will give you the information needed to adapt and develop new business strategies in line with your industry and current business lifecycle.

- Strategy Meetings: Once you have extracted your performance information, you will need to know “what it means”. Using various performance ratios and benchmark data, your accountant will draw on their training and experience to explain what you need to improve, change or focus on to ensure you achieve your strategy. There are 10 things all business owners need to know, to run their business well. During the process, you can modify and adjust you’re strategies and associated cash flow forecasts. It is a never-ending cycle of continuous improvement; plan, monitor, act.

Compliance:

At the end of the day, we all have to “pay the ferryman”. We are all obliged to lodge Tax Returns, Business Activity Statements, Payroll Tax, Fringe Benefits Tax, Wages Summary Statements etc. It is extremely important to perform these tasks accurately, efficiently and on time. Tax law is extremely complex, and changes every single year. A skilful accountant will meet these statutory obligations whist at the same time, also maximise your deductions, and ensure you are claiming all possible offsets, and rebates available to you. The aim is to maximise your after-tax cashflow. Using efficient bookkeeping systems such as Xero means your compliance obligations are met as efficiently as possible. By lodging on or before the due date means you will not be slugged with unnecessary fines or charges, as well as ensuring you have sufficient time to plan payments, and implement strategies to minimise tax if required.

Summary:

So the next time someone tells you that they only talk to their accountant once a year (at tax return time) do them a favour and let them know that times have changed. To succeed in today’s highly competitive business environment you need to be proactive, forward thinking and upskill yourself to keep up with the fast pace of change. You need to surround yourself with a team of like-minded advisors. A modern accountant will form an integral part of that team. Together you can guide your business to success.

At Rise, growing your business and helping our clients is the reason we jump out of bed each day, it’s the reason why are more than happy to teach our clients how to be “close to your numbers” and arm them with the tools and skills that they need to run their business and achieve success.

For more information on how we can help you, contact the friendly and experience team at Rise Business Solutions, Osborne Park.

@TomParkerCPA

I am passionate about all things small business. I do what I do to make a real difference. My goal is to break the mould of the ‘typical’ accountant and move our profession more towards one as a proactive business advisor for small business owners looking to learn, develop, succeed in all they do.