Hiring an accountant is an essential move for most businesses. The main reason is to help you file tax returns and meet other statutory obligations with your bookkeeping and financial management.
But an accountant can and should do much more than that. For the fee you pay, you should get more than just the reassurance that you are not going to fall foul of corporate tax and accounting rules.
An experienced professional accountant should be able to make a positive difference to your business by driving financial efficiencies, improving your cash flow, and increasing your margins.
Here are five ways your accountant can help your business grow beyond simply filing tax returns on time.
Financial benchmarking
Business owners often don’t realise there are ways they could improve their financial management because they have nothing to compare themselves to. Benchmarking involves analysing the profitability, liquidity, efficiency and other financial KPIs of competitors to identify areas of strength and weakness in your own business. Given their skills and expertise, this is a task for your accountant to lead on.
Reducing costs
Once you have an understanding of how the best performers in your market optimise their finances, you can start to make improvements of your own. One of the biggest areas is reducing costs. Most businesses are spending more than they need. A strategic and joined up approach to cost management will find various ways to make efficiency gains. Specific areas for an accountant to look at include identifying the best tax structure for your business and debt management/consolidation.
Budgeting
Controlling costs becomes much easier if your business is working to a transparent, realistic budget. Many businesses fail to think far enough ahead when planning a spending strategy, or else are working to a budget that doesn’t accurately reflect the needs of the business and therefore falls by the wayside. An accountant will help you put together a robust budget based on data-led analysis of your financial circumstances and the ongoing needs of your business, including planning for investment and growth.
Protecting cash flow
The biggest financial risk to any business is not having enough cash in the bank to pay staff, suppliers, rent, loan obligations etc. We call that insolvency, a word rightly feared by every business owner and director. Insolvency can be the result of a business simply not making enough money. But it can also result from a lack of cash flow management. You don’t have to be unprofitable to become insolvent, if you’re not receiving income in time to pay your bills. An accountant can protect your business’s solvency by structuring outgoings in a way that better reflects your revenue streams.
Bolster your business against uncertain market conditions
Let’s be honest, everyone in business is used to operating in a turbulent economic climate by now. When was the last time the waters were calm and everything was predictable? But that doesn’t make it any easier to stay afloat when your business is coming under financial pressures from all angles.
All of the ways an accountant can help your business listed above – benchmarking, cutting costs, budgeting and protecting cash flow – will ultimately help to give you a financial buffer that puts you in a better position to ride out tough trading conditions. An accountant is also in the best position to spot early warning signs of potential trouble ahead and make necessary adjustments.
Are you worried about your business’s current financial position and future resilience? Get in touch with our team of recovery experts and take the first step to getting back on the right track.
