Has the role of your Accountant done a full circle?
Rewind 100 years and you have an accountant who took an active role in their clients’ family affairs. They’d sit around the dinner table to talk numbers and balance the books with the manual ledgers. The client would run everything past the accountant before anything relating to their business and personal affairs was actioned. This level of involvement, and having the books in front of the client, lead to deeper discussions and allowed the accountant to play an active role in the decision making.
Technology Reduced the Role of an Accountant
Enter the 1990s when computers became a standard piece of equipment for any business. Technology gave business owners the ability to carry out the day-to-day accounting themselves, reducing the time needed with an accountant. Programs such as MYOB became popular, and business owners installed this onto their computers giving them the freedom of looking after their day to day bank reconciliations. Alternatively, the accountant would still do this work, but they could do it from their office remotely, so the face-to-face meetings started to phase out. The bulk of accountants’ work was based around compliance, particularly tax returns, with advisory work taking a back seat. Whilst this seemed to speed-up managing financials, the lack of physical catch-ups with current data present, it limited the amount of involvement in the day to day business for the accountant. Clients no longer needed the full services of an accountant, and a different era of accountants was born.
Cloud-Based Accounting Has Re-Introduced Advisory Work
In recent years, cloud-based accounting programs such as Xero have given accountants access to live data during client meetings, creating more topical discussions about how the clients’ business is tracking at present. These discussions have given clients a taste for what advice is possible and lead to a further appetite to engage the accountant in business advisory services. By giving the accountant access to real-time data, the client can feel confident that they have a full understanding of their affairs, and engage them in advisory work.
As a small business owner, you want to make sure your accountant has adopted these cloud solutions. Being cloud based means they are using modern practice and are actively adjusting to changes in the accounting industry. Having your accounts managed on cloud based software brings a huge range of benefits both to the running of your business and your personal life.
· Access data from any device – as long as you have internet connection, you can log in to your online accounting software from a desktop, tablet or mobile, meaning that you aren’t restricted to being in the office to view your data. You accountant can also access this without having to call you and arrange a meeting.
· Access accounts from any location – Taking annual leave? Or working from home? The flexibility of cloud software means that wherever you are located, you can still check your accounts and make sure your business is running smoothly in your absence.
· Security – by storing data in the cloud, you can rest assured that information is completely secure and backed up. There’s no risk of losing data if your laptop is stolen, or files are taken from your business, you just simply log into your account on another device.
· Streamlining processes – having accounts in one online program removes the need for copying data between spreadsheets, reports, or paper, minimising the risk of human error.
By using this cloud software to streamline the basic accounting tasks you’re involved with, it allows you to spend more time actually working on your business, or even better, spending time with your family.
Tax Planning & Strategy
As you’re probably reminded every year when June 30th comes around, tax is the most significant burden on any business each year, and you’d probably like to know a few ways you can minimise the amount you are required to pay. Does your accountant offer these tax planning services? A professional and experienced accountant should be confident in developing a strategy that works specifically for your business. Given the right strategy, you should be able to minimise your tax bill, which frees up capital that can be invested into growing your business.
By combining an understanding of your business with their expertise in financial analysis, your accountant can establish accurate projections that build the foundations to build tax strategies upon; allowing you as a business owners to gain maximum efforts by paying minimal tax.
Virtual CFO Services
The services of a chief financial officer are traditionally only available to larger companies who can fork out the full-time salary. However, small business owners can now take advantages of these services by engaging with a virtual CFO, who is usually available on an hourly basis. This provides the opportunity for small business owners to have access to a level of financial advice, and organisational risk assessment that would normally be out of reach. Your accountant should be able to use their experience as a business owner to offer advice tailored to your specific needs; addressing their concerns and providing you with the best chance to achieve your business goals.
Online accounting software such as MYOB or Xero both have access to an extensive range of add-on programs, including online rostering, point of sale (POS) and inventory management. There’s solutions for every industry, so whether you’re a tradie, restaurant owner, or run an online store, there’s an app that will work for you and make running your business so much easier. What’s even better is these add-ons integrating with cloud based accounting software, so that you can see how your business is operating from the touch of a button. Does your accountant offer these integration services? They would ideally have a dedicated cloud integrator partnering with them, you can provide a thorough consultation of your business, and then recommend and implement accordingly.
As technology continues to adapt, so too will the role of an accountant. As a business owner, you’re probably becoming more and more time poor, and need systems to be streamlined to enable you to focus on growing your business, not on sending that invoice or chasing a debtor. Your accountant should be assisting with this; they’re not just there to process your tax return at the EOFY.
That being said, accounting software can never replace the experience of personal engagement with an accountant, and as such, technology should be used to compliment the services of an accountant rather than replace. When was the last time your accountant got in touch to see how your business is performing and recommend strategies to enable its growth?