If numbers aren't your forte, you aren't alone. Thousands of NZ small business owners admit they struggle to understand profit & loss reports and balance sheets. Chartered Accountant Serena Irving says that is when they ask for help.
"Outsource what you aren't good at. Focus on your strengths." But if year-end accounts, GST and income tax returns are all you request from your Chartered Accountant, Serena says you are missing out on a valuable resource. See her hot tips below.
"Don't compete on price, especially if you are creating something unique." Serena's cake topper client was struggling to get sales and profits. They discussed hourly rates and ingredient costs. They compared prices with competitors. They created set prices for standard icing toppers and increased her prices for one-off creations.
KPIs are your early warning systems for business health. It's difficult and costly to track them all. "We help you select and focus on the three or four which have the biggest impact on your business."
Xero and other accounting packages have basic dashboards. Chartered Accountants also create specific dashboards suitable to your needs. Using graphs and colour indicators, you get a snapshot of business performance.
Whether you are investing in people or capital to grow, your Chartered Accountant helps you manage it successfully. Serena's film editor client found spare capacity by re-organising his team's work and spacing out jobs more evenly. He grew his business without adding on more rent and wages costs.
A business issue arises with your customer or supplier. Your best friend is sympathetic but can't help. Your spouse suggests getting paid employment. Chartered Accountants can be mentors for those times. "We listen with understanding and experience. Other clients have worked through similar issues."
Life and cashflow are hardly ever smooth. Your Chartered Accountant helps you through rough patches too. "A client owed over $300,000 income tax, GST and other taxes before he joined us. We set cashflow budgets, negotiated with IRD and arranged tax pool finance. He paid his tax bill off in 4 years."
If you already pay enough to your Chartered Accountant, chat with her/him about that too. Fix your regular coding errors. Negotiate an agreed fee with your Chartered Accountant so help is there when needed. Spread payments monthly to help cashflow.
Engage with your Chartered Accountant regularly and not just when your taxes are due. Get your Chartered Accountant working alongside you, improving your business success.
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Serena Irving is a director in JDW Chartered Accountants Limited, Ellerslie, Auckland. JDW is a professional team of qualified accountants, auditors, business consultants, tax advisors, trust and business valuation specialists.