Questions to ask your accountant - where do I start, right?
Accountants can be a little scary, let’s face it. They talk about balance sheets, P&L, accounts receivable and payable, capital, assets…
It can often feel like they are speaking another language.
But here are a few questions you should ask your accountant, and keep asking until you fully understand the answers. It’s not all the questions, but it’s a start.
How much tax is my business expected to pay ?
Knowing your business’ tax position helps you to plan to ensure you have enough money to pay your tax liabilities and/or put into action some strategies to keep your tax in check.
At the same time, your accountant should advise you if there are any tax updates which may affect your business. These could be beneficial tax updates (yes!) or disadvantage your business and may require you to change tack or plan for in the future.
What is my breakeven point ?
Breakeven? It’s another accounting term which means the point at which your costs and expenses equal the revenue for your product or service.
You probably calculated this before you started your business (if you didn’t, no judgement here!) but your breakeven point can shift as costs go up and down.
Why this is so important is because your breakeven point can significantly affect your profitability.
How is my business performing ?
You can see money in your business bank account, sales are coming through, and your expenses are in check.
But there’s always room for improvement and that’s where this question will highlight the areas of your business that should be your top priority.
You’ll be able to capitalise on the successes and look at what is driving your revenue.
What are your successful business clients doing that I’m not ?
Your accountant will hopefully also analyse and understand the financial data of other businesses. They see how these businesses are performing and what they are doing well or not so well to affect this performance.
Use their knowledge to get insider information that could be valuable to your business. The advice may not work for your business but what if it did?
Discuss with your accountant using scenarios to make wise plans for your business’ future.
What areas of my business should be my top priority ?
As a business owner, it’s so easy to be distracted by the daily ongoings of your business – demanding customers, bill paying, staff issues, even the hundreds of emails appearing in your inbox. Need we say more?
A fresh pair of eyes, like your accountant, can provide the source for where you should be putting your attention, effort and time into. They can help you to realign your focus to the positives, to build on the successes, to achieve more.
Need some help ?
If you haven’t already heard, The Entourage has a new service offering by way of Accounting & Advisory. We often hear from business owners and managers that managing their business finances is still a top priority but are frustrated with the lack of clarity and meaningful conversations they are having with either their accountant or bookkeeper.
We have addressed this issue by offering a full service financial management solution for our clients. This includes everything from bookkeeping to more sophisticated management reporting all the way to CFO level advisory services.
At the heart of what we do is ‘finance business partnering’. It not only answers the question of “what” or “why” something has happened in your business but also the “where to now”.
If you think this is something that can help you gain control of your finances and make better business decisions, then please book a time with me to have a quick chat on the link below.
Talk To John
Hope to see you soon.
John Liu
