They say there are 10 types of people in the world: those who can read binary, and those who can’t. Whether you get the joke or not, the fact is that for most of us, maths is never fun or easy to understand. It is usually a difficult chore. This is a large part of the reason that so many business owners choose to outsource their bookkeeping and accounting services. Even if you are one of the more mathematically-minded people, these are thankless, complicated, and time-consuming tasks with a lot of different moving parts, so most people will be happy to hand them over to someone else.
There are a lot of advantages to having access to expert knowledge when it comes to the financial side of your business. While your first instinct may be joy that you don’t have to spend hours every week adding up your costs and expenses, a good financial professional can offer a lot more than just carrying out the menial tasks of addition and subtraction, so here are some tips in how to get the most value from your bookkeeper and accountant.
Seek an Unbiased Opinion
If you are a small to medium-sized business, you are not likely to have a dedicated bookkeeper or accountant on-site, as the volume of work simply won’t be there. You are much more likely to hire an external service, and although you might be inclined to think that being closer to the business is better, it can be a real advantage in having someone who is one step removed involved.
Having someone who is inextricably linked to the business means that they are closer to the business, and the people who work within it. It is easier for their judgement to be clouded by the passion they feel from the team on the ground, or their perceived experiences that business is getting better, it just needs more time.
They are also less likely to confront you with negative opinions or harsh realities if they have a close personal relationship with you. And if the finances are being looked after by just one of several business partners, there is always a risk that they will distort the truth, or even just be suspected of doing so.
Having someone who is no only an expert in their field, but an unbiased one when it comes to your business, eliminates these problems. They can tell you when things aren’t working or when the numbers just don’t add up, and the risk of manipulation for personal gain is greatly reduced.
Many small business owners, especially those who are just starting out, see keeping their own books as a way to save money. This is a reasonable technique, especially at the beginning when the volume of transactions is low, but as the business progresses, a professional can help you cut costs in a lot of different ways. One of the main problems with running your own business is that you get used to doing what you do, and you may be unaware that there are better ways to do it.
This can apply to things like taxes, where you may not be taking advantage of all the relief or schemes available to you, as well as your employment structure, where you may be better of hiring a contractor rather than a part-time employee, for example. But then there are also the day-to-day operations to which you may have become blind.
You may be leasing a piece of equipment that isn’t giving you a return, or be devoting your time and resources equally to different sides of the business, even though one is stagnant, while the other has the potential for exponential growth. An accountant will constantly be monitoring these trends, looking for ways to save money wherever possible, so even though you’re paying them, you’ll often save more than you spend.
Get Inside Information
Another disadvantage of taking care of your own finances is that you probably haven’t seen the finances of any other business in great detail. These severely limits your experience and means that, no matter how well you may know your chosen field, you have no benchmark by which to measure the success of your business.
No accountant or bookkeeper is going to show you the behind-the-scenes of another business, but unless you are in a particularly niche sector, outsourcing these jobs means you are likely to get someone who has experience in that area.
Through their experience of crunching the numbers for different businesses in the same field, they will get an invaluable sense for what is normal, what is a red flag, and the kind of changes you can implement to have a big impact on the trajectory of your business.
If they have been doing this for years, they can also open a lot of doors in terms of accessing other reliable professionals that can help you take your business to the next level. You may be employing them to do your numbers for you, but don’t forget that they know a lot more than that.
Improve Cash Flow
Running a successful business isn’t just about bringing in more than you send out. The timing of when your money comes in or goes out also has a big impact on your ability to run your business successfully. Keeping track of when your bills, invoices, loan repayments, and payroll need to paid can be a lot to manage, and it is quite easy to forget something.
Not only are both bookkeepers and accountants less likely to overlook payments due to be received or settled, they are experts at arranging them in the best way possible. As we have noted before, cash flow is one of the main concerns for a lot of Irish SMEs, with half being forced to lay off employees as a result of late payments.
An accountant or bookkeeper can help you arrange your accounts payable and accounts receivable in such a way that you have a steady flow of cash moving in and out. This not only allows the day-to-day operations of your business to run smoother, it can also affect your reputation and credit rating, which have a material impact on your ability to do business.
There are few people in the world that see taking care of their finances as a fun or easy task, so most people are happy to hand it off to someone else at the earliest opportunity. But when hiring a professional, remember that that’s what they are: a professional. You’re not hiring them to do the same job you were, you’re hiring them to do a better one.
They have devoted their working lives to this field, and they will undoubtedly have more insight and knowledge than you. So seek their advice as much as possible, and take it on board. Never stop asking how you can improve your numbers and your business, and you will quickly find that it becomes a lot easier to do so.