Building and growing your business can be challenging and sometimes an uphill struggle. Many people dream about owning a successful business but it seems that very few ever make it that far – figures suggest that almost a third of all small to medium sized enterprises (SMEs) either enter administration, are sold or wind up after just a few years of operation. While the problems can be diverse, a lack of strategic vision, the ability to quickly adapt and diversify or a poor corporate structure are all common issues that can cause irreparable damage to a business. Smart business owners know that they need a proactive accountant who will help improve internal business processes as well as look at the bigger picture and identify opportunities for growth over time.
Not All Accountants Are Created Equally
The difference between a regular accountant and one that is considered ‘proactive’ is easy: one will review and help your business with issues such as book keeping, tax, reporting and compliance, while the other will provide these services plus give you access to a range of professional advice on issues such as strategy and planning. Involving your accountant in your formal planning process can make a lot of sense, especially if they are giving you advice on ways to maximise your profits and long-term strategies for growing the business, and they can help you modify and review your plan on a regular basis.
A proactive accountant will be able to look beyond your numbers and recommend ways to improve your business, suggestinglong-term value-adding strategies and, critically, cash flow management practices. Every business owner worries about the amount of money in the bank, and having systems and structures in place that will monitor and manage cash flow will help to shift the focus away from always being reactive – making sure you have enough money to pay major bills as they fall due – to proactive and being able to invest money into diversifying your product or service, taking on new resources or technology or boosting your marketing efforts.
The Value Of The Big Picture
A strategically focused accountant may also be able to help identify the true signs of success for a business.Understandably many owners of SMEs focus on traditional factors such as cash flow and the amount of money in the bank as a sign that their business is successful. However this narrow view can sometimes be misleading and there may be a number of vital indicators that are being missed, including inventory turnover or gross margin versus net margin. Having an independent and trusted advisor looking at the big picture and providing regular reports and feedback can be invaluable for keeping the business on track and help it weather any downturns or bumps along the way.
Because they look to long term solutions and practical ways to add value, proactive accountants generally have a broader range of experience and skills that can be used to compliment a SME, including business process automation, financial technology (including the latest accounting software such as Xero), marketing and competitor analysis and e-commerce knowledge.
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