Statistics show that only 1 in 5 businesses will survive after 5 years. Many small business owners think that if their business is currently healthy they will remain healthy. Just like you service your car regularly, it's equally important to maintain your business with regular check ups. You pay your mechanic to diagnose problems with your car before they become serious or cost more to fix (or even worse - potentially dangerous). Equally, if problems exist with a business' performance, much bigger problems (some of which may be very serious) may be prevented. At Business Advisory Accounting & Tax Services Limited, we pride ourselves highly on being more than beancounters. Many of our clients use the regular management accounts we send them to gauge the health of their business. A business' profitability can be affected quite dramatically by making a business transaction at the wrong time.
Another common misconception is that all accountants are expensive. A small entity, operating as a limited liability company, should pay no more than a flat white and muffin in a lively city centre cafe for monthly management accounts, annual financial statements and tax returns. Why wouldn't you let someone else manage the hassles for less than $5 per day? Wouldn't your time be better spent working on your business, instead of bean-counting? It's well known that businesses that do not use an accountant are more likely to be "selected" for an audit.
The final misconception is that business owners think that they can do their own accounting. And in many cases, they aren't qualified to do so. I'm aware that as Kiwis we're known for our do-it-yourself attitude to many things. However, some of the trickier tasks should be handed over to the experts. I wouldn't attempt to build a new extension on my home, so why would a builder handle their own book-keeping? The craftsman who does the same task every day will have more skills and the correct tools to do a more efficient job. My extension would probably fall down or leak after the first storm. In much the same way, the builder's business may be collapsing around them and leaking cash. Just as I may not detect a small leak in my roof for a while, a small business may "leak" cash and it may be too late to fix.
I hope my article dispels any misconceptions that you may have had about accountants.
If our regular accounting service sounds like something you may like to know more about, Mark Gwilliam can be contacted on 09 449 0417
Mark Gwilliam, FCCA, uses his international experience to coach small business owners on how to run successful businesses. He combines his natural enthusiasm for sharing his knowledge with his proven ability to provide practical down-to-earth solutions for his clients. He has written a number of books and owns several companies which offer small business owners integrated business solutions.
