When asked what accountants do, most people think of bookkeepers and tax agents who file tax returns with the ATO on time, but there’s more to it. Accounting professionals examine and prepare financial records for businesses and individuals. They are necessary in business because they track income and expenses, ensure statutory compliance, and provide quantitative financial data that may be useful in making business decisions. When to say a good accountant is?
The Significance of a Good Accountant
Do you believe that historical data or what happened in the past is more important than what will happen in the future in your business and in your life? Out of 100 people, 99% of them will say the past is important, but the future is critical. Let’s pause on that and try to think about it as we go further the discussion.
The Misconception About Accountants
Many small business owners do not fully embrace this same ideology when looking for a good accountant because they only use their accountant for one thing: gathering, extracting, and combining historical information about their company. The accountant creates a historical record in the form of a business activity statement, a company tax return, or a trust tax return that is lodged with the ATO. In turn, the ATO evaluates that historical data and provides you with your tax position, including how much you must keep and how much refund you will receive.
The Importance of Accuracy in Accounting
Let’s consider a farmer harvesting their farm and producing 30 beans in total. The farmer informs their accountant, who then counts the 30 beans. The accountant says, “Look, you’ve made 30 beans. Let’s give you 20 and the ATO ten.” However, some accountants may miscount the beans when dealing with historical records. They might only count 20 beans, leading to a potential tax audit. Alternatively, they could miscount the beans and suggest, “Why don’t we give the ATO one bean and you keep the rest?” This approach is incorrect and can lead to further complications during an audit, possibly resulting in incorrect tax payments.
The Role of a Good Accountant in Business Growth
Small business owners should expect their accountants to provide accurate information to the ATO. However, it doesn’t end there. Business owners should consider what steps they can take to make their business more successful. They should think about improving processes, increasing productivity, and exploring ways to grow their business.
The Value of Business Advisory Services
Through our monthly business advisory services, we helped a client increase sales from $40,000 to $140,000. Initially, the client had various questions and uncertainties about where to start. We explained that business advisory is a collaborative effort to identify and solve problems together.
Strategies for Business Improvement
We asked the client about their income rate considering their work hours and realized they were generating less than 50% of their potential. We suggested increasing sales or reducing costs to improve their take-home earnings. Additionally, we encouraged them to identify repeat customers, explore upselling opportunities, and seek referrals from existing customers. These strategies can boost their business and financial prospects.
Confidentiality and Professionalism
The information and strategies we share with our clients are treated with strict confidentiality. We are not allowed to disclose all the details of the steps we discuss with them. Progress may take time, but we are confident in our ability to assist businesses in improving their current positions. As business advisors, we aim to be open and honest, providing an accurate assessment of our clients’ performance. Recognizing areas for improvement and staying focused on the tasks at hand are essential for achieving success.
The Qualities of a Good Accountant
We believe that hiring a good accountant entails more than just maintaining a historical record and lodging your returns with the ATO. A good accountant is someone who can help you think, identify problems and solutions, put together a process, help you improve, and not give you less than you deserve to earn. As one of the leading Accounting firm in Inner West Sydney, Ashfield, Belrose, and Northern Beaches, we are confident to provide you the service and care that you deserve.