Did you know that 97.5% of Australian business are small businesses? They may be small, but they contributed hugely in 2020-2021*, with:
- A 33% share in Australia’s gross domestic product (GDP),
- A 42% share in employment, and
- Almost 2 million employed in construction, professional, scientific, and technical services, and accommodation and food services.
(*Statistics are from the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) website.)
Despite their significant impact to the economy, small businesses face unique challenges concerning financial management. Poor cash flow, slim profit margins, and overdue payments are just some of typical issues. Plus, the instant asset write-off scheme and tax debts leniency during the pandemic are both coming to an end.
This is when hiring a qualified accountant can make a real difference. Let’s explore how small business owners can benefit from hiring an accountant.
The Big Role of an Accountant in a Small Business
Accountants can play a crucial role in the success of small businesses by providing financial management, tax compliance, bookkeeping and accounting and business planning.
How a Small Business Accountant Can Help You in Financial Management
By understanding the business’s financial position and future aspirations, an accountant can help small business owners make strategic financial decisions for the long term. This can include identifying growth opportunities, optimising pricing structures, and assessing the financial impact of potential investments.
An accountant can assist in:
- the development and management of budgets,
- cash flow monitoring,
- assessing financial performance, and
- financial planning.
One important role an accountant can perform is analysing financial data. This helps to provide insights into areas for improvement and to identify and address financial challenges before they become significant issues.
How an Accountant for Small Business Can Help You in Tax Compliance
Australian tax laws and regulations can be complex, and non-compliance can result in significant financial and legal consequences. Though all businesses need tax compliance assistance, those in the retail, construction, healthcare, hospitality, and mining industries may require specific help.
An accountant can primarily assist business owners:
- comply with tax laws and regulations,
- understand their tax obligations,
- prepare and file tax returns,
- identify tax-saving opportunities,
- minimise tax liabilities,
- avoid any potential penalties or legal issues, and
- navigate disputes with the Australian Taxation Office (ATO).
Because tax laws and regulations are continually evolving, it can be challenging to keep track of changes. A small business accountant can provide invaluable guidance on changes to tax laws and regulations that may impact the business and advise on any necessary changes to the business’s tax strategy.
How an Accountant Can Help You in Bookkeeping and Small Business Accounting
Bookkeeping involves the day-to-day management of financial records (recording transactions, reconciling bank statements, and managing accounts payable and receivable) while accounting involves the preparation and analysis of financial statements, such as income statements, balance sheets, and cash flow statements.
An accountant can help in both areas, while ensuring that financial records are accurate, up-to-date, and compliant with accounting standards.
In addition, an accountant can give insights into a small business’s financial performance through analysis of financial data. By examining financial statements, an accountant can help small business owners understand their revenue, expenses, and profits. They can also pinpoint possible areas for cost reduction or increased revenue, and provide advice on pricing strategies, budgeting, and financial forecasting.
How an Accountant Can Help You in Business Planning
An accountant can be an essential partner in business planning for small businesses in Australia. Business planning involves:
- creating a roadmap for the business’s future,
- setting goals, and
- identifying strategies to achieve those goals.
An accountant can help develop a business plan that considers the financial aspects of your business, including cash flow projections, budgets, and financial forecasts. They can advise you about funding options (loans or investors) and assist with preparing financial statements and projections for these funding applications.
Beyond planning, an accountant can assist in monitoring and evaluating a small business’s performance against its goals. They can help identify key performance indicators (KPIs) that measure the business’s success, such as profitability, revenue growth, or customer retention rates.
Small businesses in Australia can seek an accountant to create a strategic plan that is financially feasible, sustainable, and aligned with the business’s objectives. Start-ups may benefit the most from an accountant, as well as companies in agriculture and farming, the creative and arts industries, retail and e-commerce, and hospitality and tourism.
The Benefits of Hiring an Accountant for Your Small Business
Running a small business in Australia is no mean feat and can often be stressful and exhausting. By hiring an accountant for your small business, you can enjoy:
- Time Savings: You can save a significant amount of time by hiring an accountant to handle your financial affairs. This will let you focus on sales and marketing, product development, customer service, and other areas of your business.
- Improved Accuracy: You can reduce the risk of errors and inaccuracies that could have a negative impact on the business’s financial health, because an accountant can better ensure your financial records are accurate and up-to-date.
- Financial Advice: An accountant can provide you valuable financial advice, including guidance on funding options, tax planning strategies, and financial forecasting. A small business owner can then make informed decisions that will help achieve their financial goals.
- Reduced Stress: By delegating financial tasks to an accountant, you can reduce your stress levels and focus on the areas of the business that you enjoy and are best suited for.
- Improved Compliance: An accountant can help your small business comply with tax laws and regulations, thus reducing the risk of penalties or fines.
- Enhanced Credibility: Having a small business accountant on board can enhance your credibility with investors, lenders, and other stakeholders, as it demonstrates your business’s commitment to sound financial management practices.
What to Look for When Hiring an Accountant for Small Business
You would want an accountant who is well-suited to your small business and who can provide the financial support you need to succeed. Here are some key things to look for:
- Qualifications: Look for an accounting degree and professional certifications such as Certified Practising Accountant (CPA) or Chartered Accountant (CA).
- Experience: Look for an accountant who has experience working with small businesses, preferably in your industry.
- Communication Skills: Look for strong communication skills (one who can talk about finance in plain language), responsiveness, and easy access.
- Technology Savvy: Look for someone who is up-to-date with the latest accounting software and technology, and who can help you streamline your processes and improve your efficiency.
- Trustworthiness: Look for an accountant with a good reputation, someone you can trust with your sensitive financial information.
- Cost: Look for an accountant with transparent pricing and who provides value for money. Remember to never compromise on quality and expertise.
Get Help Hiring a Small Business Accountant
An accountant can provide small business owners with valuable support and guidance, allowing them to focus on core business activities and achieve their financial goals. It can also help reduce stress, improve accuracy, and enhance business credibility with stakeholders.
If you need help with financial management in your small business, Wear Accountants is here to assist. We have supported small business owners with accounting services for more than 25 years. We only work with a limited group of clients so they can always get quality support from us.
If you want to get started with hiring an accountant, contact us today