Skip to 0 minutes and 8 secondsA lot of business owners see bookkeepers and accountants as an overhead, an unnecessary expense, and don't want to meet on a regular basis. They only turn up and want to see an accountant for compliance purposes. We need to try and change this attitude, because the bookkeeper and the accountant can assist the business owner with providing financial guidance and assistance, especially at startup, because at startup of your business, they can alert you to things that you might have overseen in regards to the setting up of your business. It's important to analyze your reports, because it helps you monitor the financial performance of your business.

Skip to 0 minutes and 53 secondsAs a small business owner, I think the most important part of analyzing your reports is looking at your gross margin, your profit margin, and your liquidity. The accountant and the bookkeeper can also help the business owner in understanding how to interpret this information. We can then create some formulas by way of ratio analysis to identify the financial health of your business. Some financial tools that you can use within your business-- if you are using a computerized accounting system, these days there is some really great software packages out there that will give you a snapshot of your business.

Skip to 1 minute and 42 secondsBenchmarking compare with your business performance with similar businesses. So if the results of your business are comparable to like businesses, this also will assist you in giving validation that you're running your business well.

Skip to 2 minutes and 2 secondsI think it's very important that a business owner develops great relationship with their bookkeeper or accountant. They can assist you in lots and lots of ways, in assisting with interpreting your reports, analyzing your reports, helping with your pricing and your costing, and of course helping you with the startup of your business.

Ask a professional

When analysing your financial documentation, it is important that you seek assistance from your accountant or bookkeeper. It is common that small business entrepreneurs may not be comfortable with accounting terminology or creating their own financial statements.

It is quite common to engage an accountant and bookkeeper to guide and support you through this process. The best place to start to find a bookkeeper or accountant is to ask friends and colleagues.

First you need to ask your accountant or bookkeeper the right questions. Some common questions asked by small business owners are:

Appointing a bookkeeper or accountant:

  • Are you currently registered to provide taxation advice (accountant); are you a registered bookkeeper?
  • How familiar are you with my industry?
  • Are there any specific considerations in my industry that I need to be aware of? For example tax exemptions or government incentives
  • Would you recommend accounting software for my business? If so, which one and why?
  • What are the ongoing costs for the software?
  • How do you want me to supply you the information you require?

Ongoing advice and services:

  • Should I consider changing my business structure?
  • Are there any fixed or variable costs I have missed?
  • I am making a profit, but my cashflow doesn’t reflect this, what would be the problem?
  • What happens if I sell less than anticipated?
  • My business is growing, how can you help me?
  • How can I grow my business but still have control over it e.g. decision making etc.
  • How often should I come and see you?
  • What can I do to help minimise my bookkeeping or accounting fees?
  • If there is a change in the economy can you assist me? Eg. secure finance, restructure loans

Activity

What would be your most important question when talking your accountant or Bookkeeper?

Post your questions to the Comments area below.


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This video is from the free online course:

Online Business: Pricing for Success

RMIT University