If your business is not generating the amount of profit that you would like and deserve, then the first person you need to contact is your accountant.
Let’s face it, accountants are the ultimate trusted advisor and the cornerstone of the financial world. Your accountant should be the first person you call to help you grow all aspects of your business, especially your profit.
Often your accountant can see ways to improve your bottom line that you might miss because you are in the trenches every day fighting for profit and growth. From past experience, I have helped many business owners improve their profit, and more often than not it just from focusing on a few, fundamental areas in any business.
Here are 10 ways your accountant can help you increase your business profit:
1. Analyse expenses
Your accountant can analyse all your business operating expenses to determine which ones are too high based on industry benchmarks. Dollars saved by scrutinising your operating costs will transfer directly to more profit for you.
2. Negotiate with suppliers
Your accountant can review your material sources and analysing your suppliers to see if you can negotiate a better deal on your materials purchased. Your accountant can also get involved in directly in the negotiations on your behalf.
3. Reduce bad debts
Your accountant can implement an effective debt collection system for your business to ensure you have no losses due to bad debts. Bad debts eat directly into your hard-earned profits. Your accountant can overhaul your existing debt collection policies and terms of trade and suggest improvements. They can help you implement better terms of trade and debt collection policies that improve cash flow and maximise your profits.
4. Eliminate unprofitable products or services
Your accountant can conduct a review of your underperforming product and service lines within your business. Your accountant can review the margin levels on all your products and services and determine which ones need to be dropped because they are contributing poorly to your bottom line.
5. Restructure financing
Your accountant can look at finance restructuring to help you save interest on your business loans. Perhaps there are cheaper options. By refinancing existing business debt, you can save interest, which will boost your profit.
6. Maximise pricing
Your accountant can maximise your current price levels by reviewing your pricing system across all products and services and determining if your prices are in line with market expectations. Maybe a price rise is long overdue, and lifting your prices will greatly boost your profit.
7. Review labour costs
Your accountant can also determine if there is a more efficient way to utilise your labour. Profits will grow if you can find some savings on wages and ongoing labour costs, such as work cover and superannuation.
8. Track advertising investments
Your accountant can help you calculate the rate of return for every dollar you spend on advertising and marketing to see if it generates enough sales and additional profit for the business. Too many business owners do not monitor the return on their marketing and advertising spend. They have no idea as to the rate of return and if it is worthwhile spending the money.
9. Plan for profit
Your accountant can sit down with you to prepare a business plan for future profit growth. Profit growth does not just happen — you must plan for it. A flexible business plan that sets key goals and charts a course of action will help boost the profitability of your business.
10. Identify valuable customers
Your accountant can help you determine which customers are most valuable by analysing your complete customer database and working out the profitability of each customer by how much margin they contribute to your business. Sometimes the smallest and simplest customers provide you with the least headaches and the most margin and profit, yet they are ignored.
Get your accountant involved in helping you grow your business profit. While you know a lot about the inner-workings of your business, your accountant can contribute years of valuable experience in growing business profits for numerous other business owners they have helped already. Utilise their existing knowledge, and your business profits will soon take off.
Lastly, MYOB has a big list of accountants and bookkeepers that you can connect with, so if you’ve gotten to this point and don’t have that critical relationship yet, fear not. Check out our online tool to help find an accountant or bookkeeper now.