4 Ways Your Accountant Can Help Your Business Go Bang in 2017
The outdated meme of the accountant as cleanup crew at tax time is not only inaccurate but is hurting your business year over year. Far from a one-time touch, industry trends show that the more often you consult with your accountant, the more money you stand to save, and not just on your business tax return.
Uniquely suited to view your business financials year round, accountants can be a proactive powerhouse for your business as opposed to a reactive intermediary between your business and the tax man.
If you want your accountant’s help to strategize a growth-fuelled business plan, we’ve come up with some core ways that you can get them more involved. Be warned, it’s going to cost you a few more billable hours each year, but consider the value of good strategist who knows the strengths and weaknesses of your financial plan.
Like we tell ourselves in business – you’ve got to pay to play. Growth is always worth it, especially with the right support. If you’re on the fence, consider it a business experiment in 2017.
Know Your Accountant
First thing to ask yourself – do you have the right kind of accountant for your business year-round? You’re here because you want to know how exactly your once-a-year tax accountant can help you through all 12 months.
You’re basically asking them to expand their role to offer some management accounting duties with all-year contact but this article covers much more business scope than tax questions. Many accountants are skilled in a variety of venues, but just to be clear, you’re asking for services that augment the scope of tax accounting. Sometimes these services go by other names, such as cost accounting or managerial accounting.
There are slight variations in the role, but in general, they record and analyze the financial information of the clients they work for, and create reports for internal use by management teams. In addition to taxation and year-end, typically they will also audit your business for billable hours – cost accountants check for risk management of a business’ funds and how best to improve business processes to eliminate waste and improve profit.
While tax accounting is full of rules and laws and accountable to the public, management accountants have a little more flexibility – what this means is that businesses can design a management accounting system or series of projects in partnership with their accountant as it suits the needs of the business.
Let Your Accountant Flex Some Muscle for your Business:
1. Reduce Business Expenses
By digging into a company’s accounts payable (AP), accounts receivable (AR), operations, and market costs, your accountant can propose savings on the costs of resources and other business operation expenses. With access to the raw data of your resources, production costs and deliverables, ask your accountant to audit whether cheaper materials will result in loss of quality for your products; they’ll present you with the data you need to make a final decision.
Accountants can also reduce operation expenses by performing cost allocation across projects, departments or business processes, then reporting findings to you. Allowing your accountant access to these data streams does have an up front cost in billable hours, but will net savings in processes, as well as saving you time and upping your confidence that you’ve been presented with accurate data from which to make decisions.
2. Manage Cash Flow
Creating a business budget that is effective and robust is a key part of business success. Luckily, there are a group of professionals that enjoy creating, maintaining and leveraging professional budgets to enhance returns and business strategy -accountants.
Financial modelling and cash flow visualization/management are a core part of year-round accounting. Often used as a financial map to the future, ask your accountant to point out key timing and processes that can make a big difference in your bottom line, or prepare you for growth – if you strategize ahead of time. Bringing your accountant on retainer in January? Expect their plan to look ahead to the next quarter and beyond.
3. Leverage Financial Information for Business Strategy
Want to improve your business strategy? Consider how much quantitative and timely data you have access to. This one’s a game changer, because instead of relying on your business intuition to plan your next moves – whether for growth, improvements in cash flow, or filling your sales pipeline, you’ve tasked someone with creating an evidence-based report about what next moves are the best for your company.
Your accountant isn’t there to take decision-making powers away from you – on the contrary, he or she actually provides stronger support, or in some cases a strong contrary point of view, for making near and mid-term business decisions. Given enough time and history, you may wish to task them with creating 5-year plan or forecast to use as a road map.
4. Increase Financial Returns
This one is tough for some business owners to wrap their heads around – how can billable hours – representing a loss each month – result in net gain?
First, take a look at our article about the value of different kinds of employees – while we don’t advocate bringing your accounting on full-time…yet…understanding the difference between a process-based and deliverables-based employee will help you understand the true role of the accountant.
Help your accountant know what you’re after by having them compare information streams as they relate to your business or industry, for instance:
- • Consumer demand
• Sales pipeline forecasts
• B2B competition analysis
• Market forecasts
Finally, you’ll know when you’ve found the right accountant for your business, because most of them are sitting on a powder keg of evidence-based financial strategies. Inviting them to consult on your particular financial model, pipeline and cash flow management on a regular basis is the match that is going to blow up your balance sheet.
Dryrun helps you take control of your cash flow, budget and sales forecasts so that you can understand your business and grow.