It’s one thing to decide to start your own business or to strike out as a sole trader, but deciding how to manage your finances effectively is another thing entirely. It’s not like the entrepreneurial spirit automatically downloads bookkeeping knowledge – it’s okay not to know it all automatically.
Enter the accountant. A good small business accountant can become your most valuable resource, helping you hit your financial goals, plan for the future and keep your tax in check.
But where do you start? Where can you find an accountant? Are there qualifications and registrations you need to look out for? How much do they cost? And what can accountants actually do for small businesses?
Where to start
‘From very early in your working career, you should establish a relationship with an accountant – one who’s also a registered tax agent', suggests Paul Drum, Head of Tax Policy at CPA Australia (one of the world’s largest accounting bodies). ‘First and foremost, in the context of tax time, they can help you navigate the maze of tax laws and rulings, help ensure you’re not overpaying tax and help you claim everything you’re entitled to claim.’
But where’s the best place to find an accountant in the first place? ‘There’s a search engine on the registered tax agent website where you can search for an accountant by postcode or by name,’ explains Paul, a registered tax agent who’s been working in the industry for over 30 years. ‘That’s a good resource and a good place to start looking.’
How big is your business?
The type of service you might require from a small business accountant depends on the size and scope of your business. If you’re a sole trader with no employees and fewer expenses, you might just visit your accountant at the end of the financial year to help make sure, as Paul suggests, that you’re paying the right amount of tax.
If you’re a larger business with multiple employees, sources of income and potential expenses, you might engage an accountant on a monthly basis and pay them a regular fee that enables you to use their services whenever you please.
Ask them if they have other clients from the same industry or occupation.
Convenience is an important factor – make sure their office is located somewhere that’s easy for you to get to, especially if you’re going to be using them on an ongoing basis. And ask them if they have other clients from the same industry or occupation. ‘That way, you know they’ll understand your financial situation and requirements,’ says Paul.
How much do they cost?
Whether you’re a small business or sole trader, there’s no flat fee for accounting services across the industry. It’s important to discuss your options with your accountant, find out exactly what they’re offering you, and perhaps even visit another accountant for a second quote to make sure you’re getting a fair deal.
It’s also a good idea to check they’ve got the right qualifications – accountants need to be registered with ASIC and to be RG146 compliant in order to give financial advice. If you use an accountant without these credentials, you’ll have far less legal protection should they get anything wrong.
In it for the long haul
Perhaps one of the most important things about finding an accountant, Paul adds, is to make sure you like them. Especially if you’re going to be using them on an ongoing basis. Find a good one, and they can look after you for life. ‘My family still uses an accounting firm that we used in the 1920s,’ he says. ‘We have a relationship with that firm and people have come and gone, but they know our family business and I don’t expect that to change. A good accountant can be a trusted advisor and an integral part of your business.’
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