Accountants do so much more than analysing spreadsheets and filing tax returns and as a small business owner, it’s important to view your accounting firm as a trusted business advisor, as opposed to an outsourced administrative function. In fact, having a good working relationship with your accountant and receiving timely advice can be one of your strongest assets and help to set your business apart. So what steps can businesses take to ensure they partner with the right practice and work with their accountant of choice as effectively as possible?
Choose the right practice
There’s an enormous amount of choice and one size won’t fit all, so you’ll need to spend time researching your options in order to select the right match for you. Look for a practice which has experience serving businesses in the same sector as yours, so they can help you overcome industry-specific challenges. To ensure quality of service, partner with a practice that’s regulated by a professional industry body, which also means you’ll be insured should the worst happen and your business incurs any losses through malpractice. Businesses can search for registered accountants in their area via their local professional accountancy body.
Aim to speak to as many candidates as possible before making your final decision. You’ll want a long lasting relationship with your accountant, so it’s important that you feel that you have a good rapport with them from the start.
Understand how your accountant works
Whilst it’s tempting to hire an accountant and ‘leave them to it’, it’s actually much more beneficial to have a basic understanding of how accounting works in order to know what you’re paying for and make better use of the reports they’ll provide you. Knowledge of certain fundamental principles, such as the below, will stand you in good stead:
An understanding of the above, as well as a solid grasp of the main financial statements (i.e. income statement, balance sheet and cash flow statement) and how they relate to each other, will enable you to work with your accountant to interpret this information and effectively monitor key business performance ratios (e.g. gross and operating margins).
Ask the right questions
Ask your accountant the right questions during your initial consultation and throughout your relationship in order to drive the best results for your business. Some of these may include:
Consider what services you need
Accounting firms typically offer a range of services, from business planning and forecasting, to bookkeeping, payroll, tax planning, budgeting, investment advice and more. However, accountants are continuing to diversify their services in order to provide ever more valuable counsel to their clients. For instance, virtual CFO services allow you to benefit from the expertise of a CFO, without paying the full-time salary for one in house. Elsewhere, strategic consultancy can help businesses stay ahead of regulatory changes and more effectively manage risk. Many other specialised services also exist, such as business valuations and loan preparation services.
Different firms will offer different methods of billing, either fixed rate fees, by the hour, or value-based pricing, which determines fee by the amount of ‘value’ they deliver to your business. Whatever option you choose, work out your budget and prioritise those services that you need help with most. Compare rates from different service providers and negotiate fees where possible.
Choose cloud accounting
More small businesses are adopting cloud accounting software in order to better manage their finances and work with their accountant more efficiently. By leveraging in-built rules and by hosting your data online, this type of technology provides the following benefits:
Bookkeeping data entry in particular, is one of the most inefficient practices to sustain for a small business, due to the sheer amount of time and expense it takes to get it right. Whether you’re doing it yourself, or outsourcing it to an accountant or bookkeeper, it’s not a good use of anyone’s time and with the right software, you’ll no longer need to spend hours typing in data from your bills and receipts.
AutoEntry is one such solution, which integrates with all major accounting software providers. It works by capturing and analysing details from scanned and photographed images of paper documents, and inputting this information directly into your accounting software. Simply scan, take a photo with the mobile app, or send your documents via email and AutoEntry will do the rest. Once AutoEntry has captured and entered this data, it creates a digital record of the
image and attaches it to the transaction in your accounting software. Businesses will no longer need to store any paper copies, so they can declutter their office and go green.
Find a service provider for the future
A good accountant will make your money work harder and help you to make opportune decisions you might otherwise overlook. They will provide you with in-depth analysis of your financial performance so you can make proactive decisions. Lean on them as a trusted business advisor and use accounting software and smart solutions like AutoEntry in order to work more efficiently and focus more of your resources on business growth.