With intelligent software solutions such as MYOB or Xero now common place, it has become an interesting question. Do you really need an accountant?
The simple answer is, “Yes!”
As a business owner, one of the most pivotal decisions you will make is the selection of an accountant who can provide you with trusted business advice. For many new business owners, it can also be one of the most daunting as it is a business relationship that extends beyond mere bookkeeping and one that will ultimately shape and guide your business as it grows. Initially, you may think a start-up or a small business isn’t sizeable enough to warrant the use of an accountant and it’s just another expense you could avoid. However, in the long-term, this approach could mean complex restructuring to maximise tax savings and protect your assets. Unless you’re an expert in business structures, tax and business advisory, then using the services of a Chartered Accountant to obtain expert advice is money well spent.
What does an accountant actually do?
A good accountant will provide your business with essential support in their role as business advisor; preparation and review of financial statements and tax returns, cash-flow forecasting, advice on your business plan and assistance with the strategic direction of your business, tax planning and assistance with your IRD compliance requirements, advice on potential tax issues or pitfalls to avoid as well as structuring both your business and personal affairs into the most appropriate legal entities. If you are considering purchasing a franchise or other business, an accountant’s evaluation of the financial records is an absolute necessity, primarily to calculate the realistic return for the purchaser and help with due diligence. A headache for many businesses is tax, knowing what is deductible and what is not and how much to set aside for tax payments each year. A good accountant will help you consider things such as depreciation and losses carried forward and help to forecast your tax so that you don’t get landed with any surprises.
For future long-term planning, get help from your accountant with the initial set up of an accounting software package to ensure that the system is tailored to your business, affordable and scalable in accordance with your objectives and growth. With the proper procedures for record keeping and financial projections in place, your accountant can help you manage your financial risk, minimise costs, avoid costly tax problems and guide your business to success.
How do you choose your accountant?
Businesses across the spectrum, from those in their start-up phase to industry giants, will benefit from establishing a solid relationship with an accountant who can assist you with questions as you grow. So, who do you call?
Engaging the services of an accountant can be likened to the recruitment of a new employee.
Here is a simple plan of action:
• Research various accounting firms online and short-list those whose vision and presence seems in-line with your business goals.
• Ask others who have used the services of your short-listed accountants for feedback. A word-of-mouth referral from someone you trust can give you an insight into what you can expect of your experience with your proposed business advisor.
• Book an initial client meeting in person with your proposed accountant so that you can establish how comfortable you would be working with them. Be sure to answer the following questions:
How to Communicate Your Needs?
Detail what you would want the accountant to handle.
• If you are handling the day to day book-keeping, give your accountant access to your cloud payroll and accounting services. This will enable your accountant to keep up to date and will significantly reduce the need for costly physical meetings and printed reports.
• Clearly outline how much time you can devote to preparing, updating and maintaining your financial records and whether you have the capacity to maintain your own accounting software. Explore with your accountant how you will best keep organised financial records – no shoeboxes of receipts! Keep in mind that records that are not maintained correctly can be costly and that your primary responsibility is to run your business, so don’t take on more responsibility that you are capable of handling and if necessary consider the services of a book-keeper or office administrator to assist with this side of your business so that you are not paying your accountant more than you need to.
What happens at the end of the financial year?
The months following the end of the financial year are particularly hectic for accountants as client work is received for the preparation of end of year financials and tax returns and a new year of strategic business planning begins.
• Fill out an end of year checklist as supplied by your accountant to help guide you through the preparation of information to provide your accountant.
• Supply all the relevant files and documents as early as possible to avoid the last-minute tax crunch.
• Once your financials and tax returns have been completed, schedule a meeting with your accountant to discuss your results and avoid unexpected tax bills by strategically planning your tax obligations for the year ahead with your accountant.
How much will it cost?
As a business owner, this is an important and yet tricky question. Make sure you clarify with your accountant in your initial client consultation how they charge. Your efficiency with record keeping and timely updates will contribute toward keeping the total costs down. The expense of an accountant is worth the time needed to run your business effectively and to avoid costly financial errors.
As your business grows, the scope of services you may need from your accountant will change. With the right accountant you should be able to develop a relationship that will allow you to make use of their services strategically as your business develops and grows.
Taking the time to establish a solid business relationship with an accountant with whom you are comfortable working with will certainly pay off in time and money.
Get in contact
The team at Giles & Liew Chartered Accountants are an experienced team of Chartered Accountants in Auckland who provide expert accounting services, tax assistance and business advice to help business owners save time, make money and achieve business success. Book in for an initial client consultation to discuss how we can help your new business grow.
Stay tuned for more tax tips and tricks as the end of the financial year approaches and tax season begins by following our Bean Blog.
Giles & Liew Chartered Accountants
09 869 7772 | Level 1, 277 Te Irirangi Drive
PO Box 217121, Botany Junction, Auckland 2164 |