THE TASKS OF AN ACCOUNTANT – EVERYTHING YOU NEED TO KNOW
Accountants can give you strategic advice and come up with clever ways to save money or boost revenue. They’ll also remove or automate administrative tasks that distract you from your core business. Getting an accountant will help you run your business with more clarity and confidence.
SO WHAT DOES AN ACCOUNTANT DO?
1. Help launch your startup business
Starting a new business can be exciting and terrifying, but it takes more than a good idea. You need to know it will make money – and you may need to convince investors and lenders of the same thing. An accountant can do that for you.
They’ll help test your idea, identify your startup and operating costs, and create credible revenue forecasts. They also know which lenders are playing ball at any one time, so you can approach the right people for finance. Plus they’ll work on your pitch, so you’re ready to impress those lenders.
2. Help with a business strategy for growth
There are so many moving parts in a business. Sometimes it’s hard to know where to focus. Accountants can help you figure out what’s important.
They’ll work with you to set goals – personal, professional and financial – then give you tools to measure your progress. You’ll end up with a set of key performance indicators (KPIs) that tell you how your business is doing.
If you have accounting software (such as Xero), your accountant will set up dashboards that allow you to check your KPIs at any time of the day or night. And if things aren’t going as planned, what does an accountant do then? They’ll help you troubleshoot the issues, test solutions, and reset your KPIs as needed.
3. Fix your cash flow
Many profitable businesses fail because they run out of money at the wrong time and can’t afford to pay suppliers or staff. Even a highly active business won’t last long if payments are slow to come in, or expenditure is too high.
Accountants know that revenue ebbs and flows, and that costs do the same. They’ll help you predict the effect on cashflow and come up with strategies to manage the situation. They’ll organise cash reserves and come up with a spending plan that ensure there’s always money in the bank. It’ll make payday less stressful, supplier relations easier – and sleep deeper.
4. Listen and support you
Being in business is tough. It can be lonely, too. When things seem too hard, and you start thinking about the cozy 9 to 5 you left behind, a top accountant or virtual finance director can keep your head in the game.
They know how much your business means to you. They can reassure and reset you on your journey. And they’ll help you cope with stress by breaking down big business problems into manageable parts. Giving moral support is an important part of what accountants do.
5. Manage your debt
There’s good debt and bad debt. Your accountant can help you tell one from the other. They’ll find the least expensive borrowing strategies for your business – with the right mix of repayment flexibility and low interest. If you need refinancing, they’ll take care of that too.
Accountants will also advise when spare cash should be used to pay back loans, and when it should be reinvested in the business. They’ll do that by considering the numbers behind your business and looking at how your debt’s structured to develop a specific strategy for you. It’s not just blanket advice.
6. Deal with unpaid invoices
Unpaid invoices are a fact of business. Chasing those debtors is a distraction you don’t need, but you can’t afford to ignore the problem. Your accountant can take the headache away.
Xero has a function that can set up and send send automatic invoice reminders to customers when their bill is due and/or overdue.
If invoices remain unpaid after this, your accountant can arrange debt financing – where a business will buy your unpaid invoices from you and chase the payment themselves.
HOW DO ACCOUNTANTS DIFFERENT FROM BOOKKEEPERS?
Accounting is a vital service; but how does it differ from bookkeeping? The two services are often compared, but actually they are complementary:
- Accountants will look at the accounts that have been created, often on a quarterly basis. They will make any minor adjustments required.
- They will use the information in the accounts to file tax returns and other official reports. They will also provide high level business advisory services.
- Bookkeepers do the day-to-day work and bring the accounts up to a high standard of detail and accuracy.
- They can also advise you on issues that might affect you in the near future, such as cashflow problems or late invoice payment.
For your business to run smoothly, ideally you need both people. You’d hire a bookkeeper to look after the day-to-day work. And you’d hire an accountant to handle official reporting and high level business advice.