- June 30, 2024
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- Posted by: user
Tax time is here and most businesses are going to be looking for – or spending a lot of time with, an accountant. Here is a guide on how to get the very most from your bookkeeper and accountant.
What Bookkeepers can do for you
For small and medium-sized businesses (SMBs), effective bookkeeping is essential to maintain financial health and ensure regulatory compliance. An accountant can alleviate the burden of managing day-to-day financial transactions and provide you with more time to focus on growing your business. But it’s crucial to understand what to expect from your bookkeeper and how to maximise the benefits of their services. Here’s a guide to help you navigate this important relationship.
1. Accurate and Timely Financial Records
One of the primary responsibilities of a bookkeeper is to maintain accurate and up-to-date financial records. This includes tracking all financial transactions such as sales, purchases, receipts, and payments. Expect your bookkeeper to use standardised accounting methods and software to ensure consistency and accuracy. Timely record-keeping helps you make informed business decisions and prepares you for tax time.
2. Regular Financial Reporting
Your bookkeeper should provide you with regular financial reports, typically on a monthly or quarterly basis. These reports should include income statements, balance sheets, and cash flow statements. Regular reporting allows you to monitor the financial health of your business, identify trends, and address potential issues before they escalate.
3. Bank Reconciliation
Bookkeepers are responsible for reconciling your bank statements with your business’s financial records. This process ensures that all transactions are accounted for and helps identify discrepancies or fraudulent activities. This has become even more important in the age of the internet and internet scams. Regular bank reconciliation is crucial for maintaining accurate financial records and preventing errors.
4. Management of Accounts Receivable and Payable
Effective management of accounts receivable (money owed to you) and accounts payable (money you owe) is essential for maintaining cash flow. Your bookkeeper should track invoices and payments, follow up on overdue accounts, and ensure that bills are paid on time. Proper management of these accounts can prevent cash flow issues and maintain good relationships with clients and vendors.
5. Tax Preparation Support
While bookkeepers are not typically responsible for filing taxes, they play a crucial role in tax preparation. They should organise and provide all necessary financial records to your accountant, ensuring a smooth and efficient tax filing process. A well-organised bookkeeping system can help you maximise deductions and avoid penalties.
Maximising Your Relationship with Your Accountant
A strong relationship with your accountant can significantly impact your business’s financial success. Here are some tips to ensure you get the most out of this partnership.
1. Clear Communication
Open and regular communication is key to a successful relationship with your accountant. Make sure you understand what services they provide and how they can help your business. Don’t hesitate to ask questions or seek clarification on complex financial matters. Keeping your accountant informed about any significant changes in your business can help them provide better advice.
2. Provide Accurate and Complete Information
Your accountant relies on accurate and complete information to give you the best advice. Ensure that you or your bookkeeper maintains organised financial records and promptly provides these to your accountant. Accurate information allows your accountant to identify potential issues and opportunities for your business.
3. Understand Their Advice
Accountants often provide strategic advice to help you grow your business. Take the time to understand their recommendations and the rationale behind them. Implementing their advice can lead to better financial management and business growth. If you’re unsure about any recommendations, ask for examples or case studies that demonstrate the potential benefits.
4. Leverage Their Expertise
Accountants are well-versed in financial regulations, tax laws, and business strategies. Leverage their expertise to optimise your business operations. Whether it’s tax planning, financial forecasting, or investment strategies, your accountant can provide valuable insights that can save you money and drive growth.
5. Regular Reviews
Schedule regular reviews with your accountant to discuss your business’s financial performance and future plans. These reviews can help you stay on track with your financial goals and adjust your strategies as needed. Regular check-ins also allow you to address any concerns promptly and take advantage of new opportunities.
Conclusion
Understanding what to expect from your bookkeeper and maximising your relationship with your accountant can significantly enhance your business’s financial health. If you are doing your own bookkeeping (as many small businesses try to do) then communication with your accountant becomes even more important. Accurate bookkeeping and strategic accounting advice provide a solid foundation for making informed decisions and driving growth. By fostering clear communication and leveraging the expertise of your financial professionals, you can ensure your business remains financially robust and tax compliant.