Why should your accountant should be involved in your business? Coco Hou, CPA and CEO of Platinum Accounting Australia, one of Australia’s leading national accounting, tax, advisory and bookkeeping firms for individuals and the SME sector, is encouraging business owners to involve an accountant in their business operations.
“Every business owner knows that ‘money matters’ are the backbone of the business. In addition to sales figures, a business owner must be across annual statements, payroll, accounts payable, accounts receivable, cash flow and projections, stock control, and supply arrangements, just to name a few,” Ms Hou said.
“In the same way you would go to a dentist to look after your teeth, business owners need to be consulting with their accountant to review the health of their business and assist to find ways of maximising profitability.
“Given the challenges facing the economy at the moment, business owners need to ensure they have a good accountant by their side.
“Here are six reasons why your business needs the support of a good accountant today.”
Reduce risk of fraud and loss
“As businesses grow and more people and systems are needed to support the increased level of activity, the risk of fraud and loss grows,” Ms Hou said.
“Accountants are very good at helping you to put in place mechanisms to reduce these risks. They can also undertake regular audits of the financials and operations to identify potential discrepancies and issues.
“Unfortunately fraud and loss is a growing problem in business, particularly small business. Recent research identified that businesses with fewer than 100 employees incurred median losses of $200,000 due to fraud.”
Accountants save you time by streamlining access to information
“The benefit of having an accountant involved in your business is immeasurable. An accountant will help you track your income and expenses, ensure compliance and also provide financial information that can be used to make business decisions,” Ms Hou added.
“Accountants can help you to streamline your financial and operational information into live cloud based systems that provide you with the ability to access financials quickly and easily, from anywhere.
“This ensures you have a real time understanding of where things are at across the business.”
Budgeting, future projections and financial advice
“Budgeting and future projections are an important aspect of any business. Projections and trends are based on historical financial data to keep operations profitable,” Ms Hou added.
“Involving your accountant in the review of these activities will provide you with important insight and guidance on how to handle issues and make decisions.
“People often forget that accountants are often great business advisers because they have extensive experience working with clients from different industries. An experienced accountant will have seen all sorts of problems and challenges and have solutions. In addition to that, a trustworthy accountant can act as an unbiased sounding board for your ideas and warn you of any potential risks and even find opportunities for growth.”
“Mistakes in accounting occur from time to time despite best efforts and unfortunately they often have a ripple effect,” Ms Hou emphasised.
“Involving your accountant in business review activities will help to identify mistakes and put in place processes to improve quality assurance. Simple mistakes such as data entry errors can lead to the need to adjust previous financial statements and recalibrate forecasts. Other mistakes can have more serious consequences. For example, making a mistake in reporting expenses could mean you end up paying more taxes than you need to.
“If cash flow information is incorrectly reported, it could result in an overstatement or understatement of the amount of cash on hand.”
Accountants are up to date with tax legislation
“Australia has a very complex taxation system. Changes occur in our tax and superannuation legislation which can be small but make a difference to the reporting figures of your financial statements,” Ms Hou explained.
“Having your accountant involved means that you can rely on them to keep the business on top of the latest tax rules, so your business remains compliant at all times. The consequences of non-compliance can be severe, so any business owner should want to avoid all the unnecessary stress if and when audited.”
COVID recovery planning
“Many businesses are still recovering from COVID and are now finding it hard to navigate through a very volatile economic climate because of staff shortages and inflation,” Ms Hou said.
“More than ever, business owners need to keep on top of cash flow, come up with new operational strategies and make sound financial decisions as they move forward. Having an accountant involved will be beneficial in this process.”
According to Ms Hou, moving on from COVID, ideally we should be on the fast track to economic recovery. However we are now faced with a war in Ukraine, labour shortages, the consequences of weather patterns and the ongoing logistical and transport issues stemming from COVID.
“It’s a difficult time to be running your own business so having an accountant available to help you navigate these tricky times is not just advisable but necessary,” Ms Hou said.
“Accountants bring so much value to your business, from handling the small details of the ins and outs of your cash flow, to helping with budgeting and financial planning and advice. Having an accountant on board is your sure-fire way of keeping your business on track and headed towards growth and success.”