For a lot of businesses their accountant is just another overhead – a compliance cost of doing business. Whether or not this is true for you generally depends on how your accountant is helping you.
Your accountant should be doing much more for you than just your year-end books and tax returns. They should be working with you to build a better business, and helping you to earn more, spend less and retire sooner.
Firstly, it’s important that the year-end accounts are done correctly. After all, you need to keep your bank and the taxman on side. However your accountant needs to do more than just prepare the accounts – they need to make sure you understand them.
By understanding your accounts you can identify areas in your business which can be improved on. For example your accounts can tell you:
- The average number of days it takes customers to pay invoices
- Whether you’re holding too much stock on hand
- How staff productivity is changing from year to year
- If expenses are rising/falling more quickly than overall sales (which involves more than just looking at your bottom line).
Once you’ve got full value from year-end accounts, your accountant should look to:
- Compare your results against similar businesses in the industry – industry statistics will help you identify areas causing you to waste cash
- Provide regular updates on your performance throughout the year – waiting for year-end is too late
- Work with you to prepare budgets and cashflow forecasts – this gives you a target to aim for and to be held accountable against
- Help you identify, measure and improve on the things critical to your business success – this may be customer satisfaction, the time it takes you to turn jobs around, or how quickly you answer your phone.
Your accountant should also help you sleep at night. This means they should work with you to implement accounting systems to take care of the detail. You don’t earn money dealing with paperwork – your accounting system should be simple and free-up your time to focus on more important things.
Finally, for both tax and asset protection reasons it’s important to get your structure right. This means paying the right amount of tax (without paying more than you should), and protecting your assets to the maximum extent possible. Asset protection involves protecting yourself from potential attacks from creditors for disputed bills, customers for the quality of your work, your spouse for relationship property disputes, your business partner for internal disagreements, or even your partner’s spouse.
Your accountant must also offer exceptional service. Exceptional services means:
- Returning your calls and emails within 24 hours
- Completing your year-end accounts within two weeks of you giving them your information and filing your IRD returns on time, every time
- Communicating with you regularly, if only to find out how things are going
- Keeping you informed of changes in tax and business law, before the change comes in
- Getting your tax payments right so the IRD doesn’t have more of your money than necessary
- Being up front with pricing – you should know exactly what you’re up for and what services your accountant is going to be providing.
If you’re not getting outstanding service and great advice that goes beyond just the year-end accounts you need to change accountants. The process to change accountants is exceptionally easy. The first step is finding a new accountant you trust and feel comfortable working with. They’ll then write to your previous accountant and get copies of the necessary information. You don’t need to do a thing – easy.