When should your business hire an accountant?

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The average small business owner is like an entrepreneurial Swiss Army Knife. They often handle all aspects of the business, from invoicing to stock management and everything in between, which is certainly an admirable feat.

However, there are times in every business owner's journey when they need help. 

There's nothing wrong with needing a hand, but many business owners will ignore the fact and attempt to make do by themselves. To help avoid the trouble this can cause, we've looked at  when you'll most likely need an accountant to help you get the job done right 

There's more to starting a business than you may think.There's more to starting a business than you may think.

Starting your business

When starting a business there are a million and one details to sort out. An accountant can help with most of these including, listing you on the Australian Business Register, setting up vital accounting software such as Xero or MYOB and registering your company with the Australian Taxation office.

But perhaps most importantly of all, an accountant can help you structure your business. This refers to whether you'll operate as a sole trader, a partnership, a company, or a trust, all of which will have different implications for you, your taxation obligations and even the safety of your assets. 

There are times in every business owners journey when they need help.

For example if you're starting a business with potential for liability you may not want to operate as a sole trader. This structure means that your business will not be separated from you or your assets, so if you do incur debts that you can't repay, your home, your car and your savings could all be at risk. 

A business accountant can help you structure your business in a way that protects what's important to you.

Writing or changing a business plan

Writing a business plan is far more complicated than most entrepreneurs realise. For example, the Department of Industry, Innovation and Science provides a template which recommends that you consider at least 30 separate sections when preparing your plan, each of which can be complex and time consuming. 

Perhaps the most important section is your finances, which should include details of the following:

  • Key objectives and financial review
  • Assumptions
  • Start-up costs for one year
  • Balance sheet forecast
  • Profit and loss forecast
  • Expected cash flow
  • Break-even analysis

Without a detailed breakdown of each of these sections you may find that your business isn't viable 6 months in, and you could even struggle to get finance to help fund your start up. This is a common problem in Australia according to a Wolters Kluwer survey, that found 61 per cent of failed small businesses cited 'inability to manage or anticipate rising costs' as the reason for their failure. 

No matter how sharp your business plan is, if your finances aren't in order it won't work. No matter how sharp your business plan is, if your finances aren't in order it won't work.

Sorting your finances

As a business owner you'll be responsible for your day-to-day finances. This means keeping detailed financial records, paying staff, looking at cash flow and forecasting for the future, putting tax money aside and so much more. 

Making use of an accounting and bookkeeping service will ensure that these tasks are performed in an accurate and timely manner. You won't have to worry about organising your tax return, or whether you'll have enough cash flow to pay your suppliers next month, as your accountant and book keeper will ensure you always know the state of your business's finances. 

That way you can worry about doing what you do best, and leave the numbers to a trusted advisor – your accountant.

If you're thinking about starting a businesses or need some help with your current venture, get in touch with the expert team here at Ashfords. We've been helping small businesses in Melbourne for decades now, and would love to help your business ideas become money in your bank account. 

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