The right and wrong way to use an accountant
Some business owners think hiring an accountant is costly and unnecessary. Others go in the opposite direction, using an accountant to enter every bit of transactional data. We believe there's a logical middle path.
All businesses should engage an accountant, but invest your hard earned money wisely. Pay your accountant to provide you with services, help and guidance in areas in which you are not an expert.
Conversely, when it comes to the day-to-day/week-to-week management of your financials like cashbook transactions, invoicing and GST, you are far better off managing the processes yourself with an easy-to-use accounting software solution.
This is because:
1. You'll save money – why pay someone else (at professional rates) when you can do it yourself? Keep your costs under control!
2. You'll be much better informed as to exactly how your business is running. It's critical you have a solid appreciation of the cash flow and profit and loss of your own business.
For most of us mere mortals, preparing balance sheets and end of year financial reports is challenging. This is where your accountant can really add value. During the year, you may also need to seek advice on matters like taxation, payroll, and depreciation. Again, your accountant is the one to rely on here.
Additionally, if you find yourself an accountant with a good strategic business brain (ask prospective accountants if you can speak with some of his/her existing clients), then they can help your business in terms of the bigger picture – setting strategy, benchmarking versus your industry peers and financial modeling. An accountant can be a great sounding board, helping in the growth of your company.
A good accountant is a huge asset to any business; just make sure to use them in areas where they will cost-effectively add the greatest value.
Grant Hewson is managing director of Accomplish. Accomplish CashManager is small business accounting software that allows business owners to focus on their businesses.
