Tips: Accountant for small business

The startup stage

Start ups generally do not need an accountant unless there are complex trust and incorporation issues to execute, but some businesses with a high level of activity will require a considered approach to bookkeeping, if not accounting. An accountant can advise on the best structure for you and your circumstances and the business being developed.

Buying a business rather than building a business is a pathway that will usually require an accountant to investigate the accounts of the business being purchased. For example, they can check whether the company's assets (such as equipment), are fully owned, or leased, or part-paid for and whether the company has any outstanding debt.

An accountant may be an important member of your team when you may be seeking alliances and capital. If your skills are not in developing business plans then an accountant can be worth much more than their fees if they are instrumental in building a documented business case which secures finance, partnerships or alliances, and crafting financial projections to help you create a business plan that's realistic, professional and more likely to succeed.

Growing pains

Growth inevitably brings its pains. Measuring key business metrics, such as the ratio of salaries and other employee payments to total revenue can become important tools for you in managing and growing your business and ameliorating pain.

Again, it may be worthwhile in sheer cost benefit terms to have an accountant help here by producing charts and graphs so you can see how the ratio changes over time.

An accountant can help you handle growth transitions, such as hiring employees or taking on more office space as well as payroll, superannuation obligations and so on, leaving you free to look at the bigger picture of the way your business is growing.

An accountant can also help with investigating the business capital and where it is being applied, looking for ways to improve cash-flow such as managing collection time on invoices and optimising inventory.

Borrowing money

The days when you could pick-up the phone and ask your bank manager for an overdraft facility to meet some pressing payments are gone. Establishing a loan or credit facility is now a process which embraces a raft of documentation and includes past sets of accounts (P&L, balance sheets) as well as projections, statements of personal assets, director guarantees, business plans, valuations and possibly more.

An accountant can help improve your chances of securing finance and avoiding the very expensive route of maxing out credit cards.

A prosperous exit

Just as purchasing a business will usually need the services of an accountant, so too will the sale of a business. The business will need to be made ‘sale-ready’ with a full kit of accounts and accompanying financial statements. And, perhaps most importantly, an accountant can help you structure your financial affairs so that you get the most money from selling your business. Now that’s money well spent!

An experienced accountant will be able to:

Complete and lodge legal and compliance documents for your business
Keep your company up-to-date with the latest tax obligations
Prepare annual statements of accounts
Maintain records of directors and other administrative personnel
Organise and record share allocation for a company structure when the business is formed, when a business partner leaves or a new equity partner joins

Financially stable growth requires the best business tools

An accountant is a valuable asset to your business financial strategy, particularly when tackling critical finance events. For everyday finances, explore Telstra’s business tools to ensure you’re managing the time between accounting appointments in a manner your accountant would approve of.