Starting a company can be an exciting experience, but it’s also one that requires a significant amount of planning. Having the right resources and experts on-hand to facilitate a successful future, could be the ultimate way to out-sell competitors, and reduce any potential risks.
Business accountants are a crucial resource in the formation, growth, and development of any business. With an in-depth knowledge of everything from tax returns, to payroll expectations, an accountant has the knowledge to navigate companies through the complexities of financial planning and cash flow.
While not every organisation will need the support of a full-time accountant, it’s helpful to know that you have a reliable, and trustworthy expert on hand to offer the guidance you need, when you need it most. From helping business owners to produce a proactive business plan, to giving their venture the strength it needs to establish long-term and sustainable growth, accountants have a lot to offer all small to medium (SME) businesses.
Most businesses begin on a budget. That’s often one of the many reasons why business owners feel that they don’t have the money available to afford an accountant. However, when you’re just getting started in the business world, it’s easy to struggle with important decisions that can make or break your business.
For instance, some entrepreneurs have no idea which business structure will work best for them. Choosing to be a sole trader, when you’d be better suited as a proprietary limited company, could mean that you open yourself up to more risks and more tax liabilities.
Business accountants aren’t just there for tax season. Their in-depth understanding of business strategy means that they can help to refine the ideas a business owner has for their venture, helping them to plan their future one milestone at a time. For example, if a client was planning on starting their own technology business, an accountant could look at similar ventures in that industry, and use projection technology to indicate how successful the idea might be.
The financial projections an accountant provides, along with their specialist advice, could make it easier to develop a business plan that’s articulate, focused, and realistic. From there, entrepreneurs can begin considering the legal complexities in planning their business.
Business accountants are well-versed in taxation law. This means that they can provide assistance to companies who need help choosing the most appropriate structure for their new organisation. While one venture might be most effective as a “proprietary limited company”, others may be best suited to the framework of a discretionary family trust, and so on.
Business accountants provide business owners with the advice they need to select a framework that maximises profits while minimising tax expenses. For example, if an entrepreneur decides to do business as a sole proprietor, they can work as a self-employed individual, invoicing clients in their own name. This allows them to offset certain expenses in their tax returns, including a portion of their living expenses.
On the other hand, if they choose a proprietary limited structure, they won’t be able to make the same deductions, but they may also not run the risk of being held liable for any business obligations their company fails to meet.
Often, business owners will need to find the right balance between accountability, and profitability when selecting a business structure. Business accountants can make it easier to walk that line, by explaining the legalities of each framework applicable to the business in question.
Successfully launching a new business is a process that requires significant planning and due diligence. When a company applies for capital in the form of a business loan or grant, the financial institution they speak to will require a basic projection of what they expect to achieve during their first year of trading. A business accountant can create a financial forecast that suggests what the sales, revenue, and cash flow should look like, according to the details included in an organisation’s business plan.
While a business accountant cannot predict the future, they can use the competitive research, market analysis, and industry projections that their client has gathered, and translate those into a forecast that could turn a company into a more appealing investment for shareholders, lenders, and regulatory bodies.
As many enthusiastic business owners find out, there’s more to starting a successful business than choosing a USP (Unique Selling Proposition) and a product name. Professional accountants keep their business clients on track from the moment their new company launches.
Running a successful company doesn’t just mean making sales. Businesses need to ensure that the amount of money they spend is less than the amount of money they’re making, if they have any chance of long-term survival.
Accountants can be a useful resource at any stage of a company’s growth. Regardless of whether someone is launching a one-person company or a large corporation, a constant barrage of numbers and financial figures can quickly lead to confusion in the business world. Without the right strategy in place, many business owners can lose track of their incoming and outgoing expenses, which means that payments are left unreported, and invoices go unclaimed.
A business accountant ensures that organisations never leave money on the table. Using invoicing programs and cloud-based software, accountants keep track of who owes what, and when certain expenses need to be paid.
For those who want to measure and evaluate the performance of their business, these new technologies can assist accountants in producing graphs that demonstrate the performance of crucial metrics over time. For instance, a business could ask their accountant to deliver a report on salary ratios each quarter.
Business accounting is about more than payroll and taxes. Thanks to innovative new software, an accountant can give their client a full rundown of their business operations at a glance, sharing crucial financial data in easy-to-digest visual displays. This helps the average company owner to keep their finger on the pulse of their business and understand its true potential.
Accountants use a combination of their specialist skills, and the latest technology to make money management simple. When a company invests in an expert to assist them to handle their books, they don’t have to worry and can have peace of mind knowing that their records will be clear, accurate, and compliant with Government regulations.
A great accountant doesn’t just make sure that the numbers add up at the end of every quarter. These specialists help to support the growth of your business by providing advice on which KPIs (Key Performance Indicators) a business should be measuring, and whether they need to make changes to their payroll strategy. These experts get to know the industry behind each company they work with so that they can guide each business towards better operational efficiency and maximum profit.
For most business owners, the main attraction of starting a new business is the fact that they’ll have complete control over their career. Business owners can choose their own hours, design their ideal business strategy, and adjust their workload to suit their needs.
Unfortunately, while it’s great to have control over your professional life, deciding to do everything yourself could be the choice that ends up stunting your business growth. Delegation is crucial to success in any growing organisation. It’s important to be able to recognize where your specific skills are required, and where you’ll want to access the help of another specialist.
Learning how to delegate financial tasks could be the first step a business owner takes in bringing more balance to their life. While they’ll need to choose an accountant that they feel they can trust, handing the company finances over to an expert can leave a lot more time on an business owner’s plate for them to focus on growing their business.
Some of the world’s most successful entrepreneurs have gotten to where they are today because they know how to delegate the right tasks to the right people. After all, no-one is an expert at everything. An accountant not only takes some of the stress off the shoulders of the company’s leader, they can also pinpoint areas of potential growth or find new ways of reducing costs.
Tax obligations are one of the most stressful and confusing burdens for many business owners. While proper planning and organisation can help to reduce the complexities of dealing with the ATO, ASIC and other Government bodies, engaging an accountant is often the most cost effective way to simplify or eliminate these burdens.
Accountants help their clients cope with the complexity of tax returns, while implementing reliable strategies to save an organisation money, and increase net profits. These financial experts have often spent years learning the ins and outs of Australian tax deductions.
They can guide you through the process and avoid any pitfalls that could cost you more money. For instance, did you know that if you’re currently using your home as a business premise, you might need to pay capital gains tax when you sell that property?
In a world where most business owners find it difficult to accurately calculate how much tax they have to pay, an accountant is the key to knowing this ahead of time and to minimising your tax payable to the lowest level possible. The right accountant can analyse the reports and documents that a business owner gathers throughout the year, to make sure that they’re getting all the tax relief allowances they’re eligible for. This can potentially save businesses thousands of dollars that can then be reinvested back into the business.
An accountant can even help to find opportunities where a business owner may be eligible for additional allowances. More often than not, asking an accountant to prepare tax documents; including taxation returns, financial statements, activity statements, etc; could save companies so much money that they end up saving more than they spend on the accounting fees.
The tax support that an accountant offers is one of the things that ensures these professionals pay for themselves as your company continues to grow and evolve. However, an accountant can do more than simply help organisations file their tax return, they also assist companies who need to interact with government bodies (not just the ATO and ASIC) in other ways, by:
The more reliably you can comply with all of your government obligations, including those listed above, the more you can minimise the likelihood of being contacted by and having to deal with inquiries from the ATO, ASIC and other government bodies.
Many business owners assume that they’ll never have to deal with the threat of an audit. Unfortunately, this also means that they have no plan in place for how to respond if the government did come knocking.
Statistically, the chances that a small business could be audited by the Australian Taxation Office are increasing. The ATO has recently increased their scrutiny of all businesses, enhancing their data matching software so that they can cross-reference the information declared in tax returns with records collected from government organisations.
Large variances in data, identified by the ATO when undertaking a cross match of data, may trigger an audit. This could include differences between:
By investing in an accountant early, companies can reduce their risk of being audited by ensuring that every document filed with the ATO corresponds with other data retrieved from the business. Even if a company is hit with an audit, a business accountant could help that organisation to move through the process faster, and more efficiently. In fact, some companies even offer “audit insurance”, which covers the fees that a business owner would need to pay their accountant if their business had to respond to an official ATO investigation.
Business accountants are experts in the rules and regulations that have been outlined by the ATO. Engaging a good business accountant means that they can reduce the risk of incurring huge penalties at the end of an audit. Accountants are even able to complete any files or documents that government bodies need to re-assess cash flow and ensure a business is compliant with government regulations.
As the ultimate resource for those facing an audit, a business accountant keeps their clients informed of the latest regulations, and changes that might be taking place within the ATO.
There are countless factors involved in lodging an accurate tax return. A business needs to provide information on everything from payroll, GST and PAYG Withholding tax to company expenses. An accountant is often the easiest way for any business owner to reduce their risk of making a false statement when interacting with the ATO.
Like many valuable investments that an entrepreneur might make on the behalf of their business, a business accountant exists to help that venture grow. From day one, an accountant can help their clients to set reasonable, achievable goals for the future, based on an in-depth understanding of everything from cash-flow to the organisations financial assets.
Some accountants even have the HR knowledge to advise their clients on which employees they should hire as their company continues to expand. Once a business brings new talent onto their team, an accountant will then be available to manage the employee tax and payroll for those employees.
Additionally, accountants also have the background expertise to help uncertain business owners make decisions on how they should price their products. A business accountant can examine a company’s corporate expenses, evaluate the response to competing prices in the marketplace, and suggest the perfect price tag for a new offering.
Because these financial experts are there to look after the financial details on a company’s behalf, this gives entrepreneurs the freedom and more time to focus on the bigger picture, so they can be working on their business instead of just working in their business. And those business owners, who choose to work very closely with their accountant, can rest assured that their accountant will be there to let them know if and when their revenue starts to decline.
For many businesses, an accountant is a key element of their overall growth strategy. Not only are accountants there to offer support in relation to taxation matters and obtaining finance, they can also offer the expertise that a business owner needs to get back on track when they face hurdles on the path to success. After all, the road to a profitable business is rarely straightforward.
As a business owner, you may find that cash flow isn’t always predictable. If a company doesn’t have the capital to invest in a new product or take the next step in their industry, then a business accountant could be the key to getting the necessary financing to grow. Today’s banks want to know for sure that the money they lend to an aspiring company is going to come back to them – with interest.
A business accountant improves an organisation’s chances of getting the perfect loan by giving them the resources they need to demonstrate their eligibility to their chosen bank. Even just having an accountant can be enough to convince the lender that an entrepreneur is taking their finances seriously, which could help to sway the decision in their favour.
Additionally, because an accountant knows intimately how their client’s company works, they can advise them on which loan might be the most lucrative for their needs. When it comes to applying for funding, an effective business accountant organises all of the financial information they have about a business into projections that the bank can use when calculating the amount of money you can realistically afford to borrow. Accountants can negotiate with loan officers and banks to access better deals for their clients.
As companies continue to grow, and marketplaces change, business owners need to make important decisions about which directions they should take their venture in. The wrong choice can mean disaster, while the right choice could deliver products and services to a host of new loyal customers.
There’s no one-size-fits-all roadmap for success in the business world, but having the right guidance from an expert could be the key to making sure that a business makes the right choices for their future.
The unpredictable nature of business means that some company owners will hit a few hurdles on the road to success, and may need more support making their cash flow work for them. Business accountants are particularly useful when it comes to keeping an organisation on the right track with their development. Through financial projections and competitive analysis, they can provide a company leader with the information they need to make careful, informed decisions about the future.
If a deal goes south, an accountant can be there to make sure that the ensuing debt doesn’t drown a company, by setting up realistic strategies for repayment and negotiating with creditors. In some cases, an accountant may even be able to reduce a company’s risk of facing legal action from creditors, by organising a successful repayment plan for everyone involved.
Business accountants have worked with organisations through all stages of development, which means that they know better than most how to turn a struggling venture around. Once negotiations with creditors are complete, a business accountant can offer the guidance that a business needs to continue their successful growth until the company is profitable again.
Alternatively, if business growth takes an entrepreneur into a new avenue, such as the “franchising” format, an accountant could provide the business owner with the guidance they need to generate profit as a franchisee.
Though franchises can take some of the risks out of beginning a new business, it’s important to remember that they come with their own distinct challenges and concerns – issues that can often be more accurately assessed by a professional accountant.
A business accountant can determine whether a franchise is worth their client’s time or not, so they can reduce their risk from the on-set. An accountant can look through the contracts provided on behalf of the company to determine whether they have the potential to make a lot of money with a franchise idea, or whether they should search elsewhere for a better opportunity.
There are many different factors that can make or break a new company, but few are more important than healthy finances. Ultimately, a business accountant is an asset for any stage of launching or running a business. Whether a company is just starting to explore a new industry, discover the benefits of franchising, or making the decision to sell to a new investor, an accountant can work with them from start to finish.
Sometimes, a business owner decides that it’s time to sell the company they’ve built. They may want to retire, or perhaps start up a new venture. Either way, accountants help their clients to prepare for that final sale, ensuring that they can avoid any costly mistakes along the way that might result in fewer profits when everything is said and done.
Accountants can prepare financial records on the behalf of a business so that they have all the right documents ready to show prospective buyers. In fact, with the right software on hand, accountants can design graphs and charts that indicate just how profitable a company could be.
Some accountants are willing to speak to the experts advising the potential buyers, and ensure they have the right information available to guide a successful sale. After all, one of the main benefits of an accountant is their extensive network of legal and financial contacts.
Once a business sale is complete, an accountant can then help their client determine what the next step of their journey should be as a business owner. While some individuals might choose to enjoy their retirement on the money they got from their last business, others will prefer to invest in a new company and may need the help of an accountant in making a sound purchasing decision.
A business accountant can assist with everything from evaluating assets in the new business that their client wants to purchase, to analysing the profitability and outstanding debt. By generating a complete overview of the potential of any company purchase, a business accountant has the ability to steer their clients towards the investments that are more likely to deliver significant, and sustainable ROI (Return On Investment).
Countless companies overlook the importance of a business accountant when they’re first getting started in their chosen industry. However, the truth is that few resources are more useful than an accountant when it comes to keeping a business in the black.
Whether they’re helping their clients understand their cash flow so that they can figure out how to get more out of their profits, preparing the tax returns so that businesses can reduce their risk of an audit, or making sure that an entrepreneur gets the biggest possible sale for their business when they’re putting their venture on the market, an accountant is an essential element in every aspect of the business lifecycle.
While a business accountant might not be a mandatory part of running a business, it’s safe to say that these professionals have a lot to offer their clients at every stage of company growth. Because an accountant is there to manage the financial side of a business, they ensure that business owners have the freedom to focus on doing what they love, embracing new opportunities, and planning for the future.
An accountant is there to provide security, peace of mind, support, opportunities, and knowledge for a company. As experts in everything to do with finance, business accountants are the secret weapon that empowers business owners to realise and embrace their full potential.
August 10, 2018
August 10, 2018
August 10, 2018
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The information provided on this website, including the material and contents provided in the website publications, are informative in nature only and you should not act specifically on the basis of this information alone. It should not be used as a substitute for legal, business, accounting, tax, financial planning or other professional advice. If expert assistance is required, professional advice should be obtained. Liability limited by a scheme approved under Professional Standards Legislation
Paul Baggetta is the Founder & Principal of Baggetta & Co (ABN 68 786 233 813).
Paul Baggetta has been a Taxation Accountant since 1981, a Financial Planner since 1998, and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading) and operated his own Real Estate business for property investment clients for over 5 years as a second business.
Financial planning services are provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.
Taxation & Accounting services are provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, FIPA & NTAA.