Accountants play a vital role in the success of small or medium businesses. He or she should have the finger on the pulse of your business’s financial health as well as a wellspring of insight on how your company can be run as a tight, profitable ship.
In this article, we explore some key questions you should ask before selecting an accountant, to get more bang for your buck from his/her services.
1. Can I contact your clients for references?
The first and most important question will confirm whether the potential candidate is familiar and comfortable with businesses in your market. Contactable references are a valuable source of assurance that the potential accountant is knowledgeable and reliable.
2. How are your fees calculated?
Many accountants bill by the hour while others bill for specific outcomes such as income statements, balance sheets and filling your annual tax returns. Ensure that you determine what you’ll pay your accountant and what you can expect in return.
3. How will you add value to my business?
Several business owners desire to have their accountant double up as a strategic advisor, as opposed to just being a bookkeeper and tax compliance officer. Proactive accountants can help you work towards reducing costs, for instance, by utilising cloud-based software to automate several processes such as payroll, inventory management, as well as to seek out new revenue streams.
4. Which accounting software do you use and recommend for my company?
A reliable accountant should assist you in selecting the right software for efficient bookkeeping, and if you both use the same programs, it will make working together easier. The use of cloud-based accounting software makes it a breeze for collaborating.
5. Am I managing cash flow optimally?
Ensure that you ask your accountant to examine your cash flow to glean any problem areas and opportunities for improvement. An efficient accountant should assist in planning for shortfalls as well as optimise your receivables and payables.
6. Are there any sector-specific risks and challenges that I’m overlooking?
A decent accountant should be familiar with your industry and guide you as to its niche challenges. For instance, if you’re in retail, how will your accountant help you manage the costs of keeping inventory?
7. What are some common day-to-day mistakes that small businesses similar to mine make?
Any seasoned accountant will be able to help you avoid some common blunders which many startups and small businesses are prone to making. For example, he or she could provide valuable advice on avoiding SARS penalties for inaccurate tax filings as well as advice on procuring great deals from your suppliers.
8. Which records should I keep and which financial records do we need to produce?
Any accountant needs to be able to tell you which transactions you should keep records of, which documents you need to keep on file, how you can use software to automate specific financial processes and which financial reports you need to generate for better business processes and compliance.
9. What information is required for me to complete my accounts and file for tax returns?
Your accountant needs to be able to tell you which financial records he/she needs to draw up your financial statements and put them together with your tax returns. Moreover, the accountant might also suggest which documents you should hold onto if SARS selects your business for a tax audit.
10. What can we do in the next financial year to reduce tax fees and make the filing process smoother?
Should your accountant be working for your company for the first time during the tax year, he/she should be able to analyse your returns and provide ways to lower your bill in the future.