10th November, 2016
A hero is typically defined as someone with noble or special qualities, abilities, and character. Sounds like my accountant if you ask me.
If asked to name your personal hero you may not think of your accountant. For small businesses and self-employed folk though, your accountant can be one of your most trusty and valuable assets.
More than that, I’m comfortable saying my accountant is my business hero, and here are three key reasons why:
My accountant is an expert in personal and company tax, and without fail every financial year they find areas where I can save money.
Sometimes this comes in the form of claiming deductible expenses; other times it’s through staying up to date with changes in tax legislation.
In 2015, for example, my accountant advised me that the Australian Taxation Office announced that it would temporarily allow small businesses to claim an immediate deduction for certain depreciable assets up to the value of $20,000.
The computer I wrote this article on attracted an instant write-off.
On other occasions, my accountant advises on how to draw funds from the business as salary or dividends to provide personal income in the most tax-efficient manner.
Because my accountant is in an expert in tax legislation, I don’t have to be.
This saves me money and time, and provides me with peace of mind so that I can instead devote my energies to improving and streamlining my business.
They also help me to report figures in an easy format by classifying expenses into appropriate columns.
This helps me to count specific items and expenses, and to keep track where money is being earned and spent within the business from month to month.
While you may think you know how much cash you are spending and what you are spending it on, until you are challenged by seeing the actual figures on a page your perception may not always reflect the reality.
For example I have often seen flights as an unavoidable cost of doing business. When confronted with my annual travel costs on paper though, it changed my thinking.
It made me consider whether every meeting required my physical attendance, or whether more initial client ‘meetings’ could be held electronically.
A good bookkeeper or accountant can be highly skilled in analysing figures for you.
This can help you to identify which parts of your business are operating effectively (or ineffectively).
One of the greatest secrets to success in small business can often be identifying your most profitable and successful products — and customers — and doubling down on them.
That is, instead of trying to be all things to all people, do the few things that really work better.
Insightful analysis of your figures can help you identify product lines and customer types that are not working and to cut these.
Such insights have helped me to generate a range of Key Performance Indicators (KPIs) to ensure that my business development strategies are kept well on track.
As well as recording purely financial KPIs, such as revenue and profit by product line, I keep a monthly record of customer satisfaction and retention.
Business experience and analysis from my accountant has shown me that happy customers lead to referrals and to repeat business.
In the early days of a startup or small business, it can be a useful undertaking to process the bookkeeping of your business yourself, as this brings you closer to the numbers and forces you to consider the importance of expenditure line items.
As your business grows, however, an experienced and appropriately qualified accountant can become not just one of your most irreplaceable and invaluable assets but become your business hero.
A skilled accountant can save you money and time today, and better still they can help you to direct your focus more accurately, which in turn can save you a great deal more money and time in the future.
In my book these are noble skills and abilities — so my accountant is undoubtedly my hero any day of the week.