Don’t put off consulting
Accountants are an important part of
an SME’s operations, but like the dentist, if business owners leave consulting
an accountant until it’s too late, the pain can be excruciating. John
Szabo, CEO of John Szabo & Associates Pty Ltd, recommends you
regularly consult your accountant.
For new businesses, select an accountant that best suits the
company’s needs. The best accountant or bookkeeper depends
primarily on the volume of transactions, and thus the amount of time they will
take to process.
Public accountants (IPA/CPA/CA) are readily available and both can meet the
needs of just about every small and medium-sized business.
Accountants are there to help, not hinder, so business owners should work to
build rapport early to facilitate smoother operations throughout the financial
year. Keep your accountant informed. Supply the necessary accounting records in
good order, consult prior to major business transactions and maintain clear
channels of communication.
Ongoing and regular compliance tasks such as business activity statements,
annual financial statements and income returns can be lengthy endeavours if not
prepared correctly. By taking the time to correctly compile as much of this
information as possible business owners can reduce the time their accountant
spends on it, minimising costs and both the downtime and disruption to your
daily company operations in answering the accountant’s queries.
Common Accounting Mistakes
Where business owners hurt themselves most is by not consulting their
accountant prior to major, usually infrequent transactions.
All can have significant impacts on the business financials. By failing to
consult your accountant, they can have serious consequences on capital gains
tax, GST, income tax and even stamp duty that could well have been avoided if
handled or structured differently at the outset. Some transactions,
particularly those involving a superannuation fund, may even be illegal and could
risk the fund’s existence as well as incurring substantial taxation penalties.
Controlling costs is vital for SMEs and there may be concerns that
accounting fees are an unnecessary overhead to be cut to the bone. Accountants
usually charge by the hour but business owners should not assume that the meter
is running as soon as the accountant answers the phone. Understand the basis of
an accountant’s fees and establish estimates before work is performed.
To stay within a budget, request a capped quote. Here, the accountant, after
considering the assignment, agrees to charge no more than a quoted ceiling.
Technology has expedited the accounting process by enabling a faster
transfer of information and communication between business owners and
accountants. Accounting software, such as the latest versions of MYOB or Xero facilitate
the transfer of data files between accountants and business owners over the
internet. This does not mean, however, that face-to-face meetings should be
abandoned. By walking the property, accountants can get a better appreciation
of the capital, staff and other resource requirements that make up a business.
The effective combination of electronic and in-person communication enables
business owners to realise greater value for their accounting dollars and
lessen the burden come tax time. In so doing, they can look forward to engaging
their accountants, not postponing a meeting until the financial pain becomes