Does a small business need Business Accounting?
Absolutely! Many small businesses have a bookkeeper prepare their accounting file up to the point of being reconciled to the bank and having BAS returns lodged and that’s it. The most valuable and exciting part is never undertaken.
That is the review and interpretation of the results, understanding what it all means and then taking the appropriate actions as required.
What are Business accounting services?
Business accounting services involve the preparation of profit and loss statements, a balance sheet, a cash flow statement and the analysing the business performance, applying ratios, benchmarks and reporting to enable the business performance to be improved.
Business accounting is fundamental to the success of any small business. A management accountant can provide information from your own accounting records that will transform your business if you apply the advice provided.
What is Tax Accounting?
Tax accounting ensures a business is compliant, pays the correct amount of tax after using tax effective strategies but only rarely advises on business performance.
Can my Accountant do tax and business accounting?
Yes, they can. Some do but many tax accountants do only tax. In this case, you need to find a good management accountant.
How often should I see my Accountant?
A regular quarterly meeting to review management accounting reports should be your goal. A single meeting once a year to do your tax will not get the job done and will cost you dearly.
How long should my accounting work take?
That depends on the size and efficiency of the accounting practice you engage with. A turnaround of up to two weeks is reasonable, depending of course on what work is involved. Mostly we do the work promptly and get back to clients within 1 week.
Most accounts would be able to respond within 1 week.
Is Fixed Price Accounting a good option?
Yes, it is. Regardless of fee type, the price should be agreed, before any work is started. In this way, you can minimise your cost, maximise your return on your investment in accounting and avoid any unwanted or unexpected surprises.
How much should you expect to pay for Accounting?
The most important question is what value are you getting for the work carried out and how effective is this work done.
The total amount of any fee depends entirely on what you require, the level of expertise and the complexity involved. There is no one size fits all. More importantly, can you use and act
There is no one size fits all. More importantly, can you use and act on the advice you are given?
Always ask for a fixed price quote up front and provide a clear and concise brief on what you want.
How much should I expect to spend on accounting?
If you are spending more than 5% of your annual sales on accounting it is probably too much. If you are spending less than 2% of annual sales you are doing yourself a disservice.
Small Business Accountant
An accountant is well placed to provide good accounting and business advice which go hand in hand if you are to enjoy continued success with your small business. Accounting advice should not relate solely to tax issues as there is much more at stake than just managing compliance and minimising the amount of tax to be paid.
Many accountants are not in a position to even consider accounting advice let alone business advice because of their heavy compliance workload and they are attempting to be of service to way too many clients. They simply do not have the hours in the day, the staff or expertise to be able to attend to the many client requests.
Business advice provided without the full knowledge gained from up to date financial statements is also not good practice and many a small business has been undone as a result.
Small business owners attempting to go it alone without an accountant is not recommended unless of course, you have accounting training and considerable experience, which is rare among small business owners.
Accounting Advice – the case for a proactive accountant
Accountants who are proactive are ideally placed to provide up to date financial information plus accounting advice and business advice that could make a very significant improvement to your small business.
Accountants have access to a wealth of information that provides a very vivid picture of the true performance and financial position of a small business.
Reviewing your financial performance and managing your financial resources should a monthly exercise with the involvement of your accountant
When used correctly this information can form the basis of good sound accounting advice and business advice.
Small business owners need to know the up to date financial position and current business performance now, right to date and in the current month and not from information that is not 30 days or more behind, which is already out of date.
Do you have access to accurate, up-to-date accounting records and financial statements that take the guesswork out of your real financial position?
Would you like accounting advice based on current financials to improve the performance of your small business?
Accounting Advice – the fundamentals
- Choice of business structure
- Set up as sole trader/partnership/company/ trust
- Business name registration
- ABN registration
- GST registration
- Accounting software selection and set up
- Accounting software upgrades
- Chart of accounts set up and maintenance
- Debtors and creditors control
- Payroll set up
- PAYG payment summaries
- Profit and Loss reports
- Balance Sheet
- BAS/IAS preparation and lodgment
Accounting Advice – the more advanced reporting can include
- Profit and Loss Budgets
- Cash flow budgets
- Prepare financial statements
- Cash flow statements
- Job Costing
- Profit Margin review
- Finance applications
Small Business Tax Accountant
A small business tax accountant who provides proactive advice is worth their weight in gold!
Our best advice to every start-up or existing small business owner is, you must have a good working relationship with a small business accountant who understands small business and who provide proactive advice.
Why? The success of your business venture depends on it!
You can not be expected to know how to run a the accountancy required by a small business unless you have had specific training in business and at least 5 to 10 years experience owning or managing a business.
As a small business owner, you are not expected to know how to do accounting or bookkeeping, which can often be complex and challenging to get right.
A Small business tax accountant who can provide business advice will provide you with the knowledge and insight that is the foundation of any good business.
A good Business Plan, good accounting systems and procedures will go a very long way to ensuring the financial performance of your business is all that it should be.
What is most important is you need to understand what is going on financially in your business, to be able to read the results, know what they mean and what to do about it to improve the business. Small Business and the accounting required is just not that difficult if you surround yourself with the right people with knowledge, expertise and a willingness to guide you through the maze. It is essential that you have available good sound information so that you can make informed decisions that will increase profits, improve cash flow, give you more cash at bank and ensure you get paid an income that rewards your efforts.
- Are you struggling to understand the accounting required to improve your small business?
- Are financial statements including your Profit and Loss, Balance Sheet or one of the many other reports that a good accounting program can generate a complete mystery to you?
You may be very good at what you do in sales or using your technical or professional skills. But you will quickly come to appreciate that is vastly different to owning and managing a business.
Fixed Price Accounting is a good option
Fixed Price accounting is in the client’s best interest and rewards efficiency and workflow best practice. The reduced cost of accounting, payable by a low monthly fee is a real plus.
Any agreed fixed price accounting fee can only be arrived at, after consultation with the business to develop a complete understanding of their requirements.
All small business should expect good value for money, attention to detail and a rapid response to all of the accounting work they require.
Easily the best outcome for clients is when there is an up-front agreement for an annual fee (paid by monthly instalments) and includes direct contact via phone or email with the accountant and at least 2 face to face meetings per year or even better a quarterly accountability meeting face to face.
Easy to understand why Time billing is rapidly becoming a thing of the past.
What to expect from Fixed Price accounting?
The number one goal from the outset is the relationship with your accountant must add value to your business. The only way that occurs is when the value of the work performed for you is substantially greater than the cost of the service.
That is a pretty simple concept. As a business person anything you purchase you should expect to make a profit on. Your investment in accounting services should be exactly the same.
So what do accountants do?
As a small business owner, you need to know your true financial position at all times. You require accurate, up-to-date accounting records, financial statements, and financial analysis to take the guesswork out of knowing your real financial position.
Review of monthly reports
Prepare Management Accounting – Quarterly Reports
Quarterly Management Meeting – Review Quarterly Reports
Tax Planning (annual – reviewed half-yearly)
End of Financial Year
Preparation of Financial Statements including reconciliation of all accounts:
- Tax Office Liabilities
- All Financial Liabilities
In addition to the up to date reconciliations you should also have prepared for you:
- Update of Asset Register and Depreciation Schedule
- Annual BAS return
- Superannuation annual Summary
- FBT Annual Return
- Review of PAYG summaries for end of year
- Prepare Financial Statements
- Prepare Tax Return (Business and Individual)