Happy New Year! Welcome to 2012 – we hope it will be the best year yet for you and your business.
The first item on the agenda for this year is one that I’m fairly familiar with – accounting. More specifically, what your accountant should do for you.
At Johnson & Tennent, we believe that an accountant plays a big role in a small business. As a small business, you’re in that place between needing to do everything yourself and being large enough to hire a full-time professional accountant. An accountant is perfect to be your small business’s part-time CFO – with all the expertise, but not the full-time expense.
So is your accountant doing enough for you? These three points should be an indication:
1. Do you know what your cashflow looks like?
Cash is king – if you’re strapped for cash, your business will virtually grind to a halt. As a business owner, you need to know what affects your cashflow – and if your accountant isn’t telling you, you’re missing out on a vital business statistic. You should also be able to receive some recommendations to improve this cashflow, which in turn will improve the growth speeds of your business.
2. Do you know how much your business is worth?
Business value is very important for you as the owner to know – the business is what you’re putting your blood, sweat and tears into! Chances are, if you don’t have a recent business valuation figure, the number may be vastly different to what you think it is! Keeping track of your business value allows you to know how your investment is paying off – and potentially how much you could sell it for.
3. Could you be paying less tax?
One of the worst parts of the game Monopoly is giving your hard-earned cash to the tax man, and I’m fairly sure that this is reflected in real life! Tax planning and minimisation can make a huge impact on a small business. There are sensible (and legal!) ways to minimise tax – including proper business structure, claiming all possible expenses, and of course, avoiding interest and penalties.
Tax and accounting is a huge and complex topic, and small business owners can’t possibly be expected to know it all (or have time to deal with it all!). This is why having a trusted accountant (and even acknowledging them as a part-time CFO) can be what makes or breaks a small business’s finances. For more tips on business accounting and tax, follow us on Twitter @JandTaccounting – and make sure your accountant is doing enough for you in 2012!
