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A good accountant can offer so much more than reviewing your last financial year activities and ensuring you remain compliant. Getting the right accountant onboard and utilising them strategically can help bolster your business success.

With insights and experiences from working across similar businesses, a good accountant will offer a great sounding board when considering a new business strategy or fixing current problems. They will also remind you of the importance of cashflow and best practices for managing taxes, payroll and systems.

Strategy and structure

Regular consideration of your strategies and structure to ensure they are fit for purpose is important. The financial structure of your business will impact on your operating structure and strategies. Getting the structure right at each stage of your business lifecycle can save you and your business significantly in taxes and/or accounting fees.

Consider:

• Has your structure evolved since the conception of your business? A structure appropriate for a start-up will most likely not be right for a more mature business.
• Do you have a business partner/s, passive or employee shareholders or are you a family business?
• Do the costs of the structure outweigh the benefits?

Over time, a business may become overwhelmed with too many companies and trusts and require simplification. If structure is overwhelmed with complexity, your business may become too focused on accounting for the structure, rather than focusing on Key Performance indicators and what is driving growth and cashflow. The simplification process may take a few tax years to complete, so it’s important to meet regularly during this time.

For more insights and tips into minimise tax and risk with business structure, check out our free whitepaper.

HOT TIP: Have an annual general meeting with your accountant each year to review structure and strategy.

Does the business support personal goals and aspirations

A good accountant will be able to view you and your business holistically – offering strategies to achieve your personal goals and aspirations alongside your business success.

For example, your business may be performing well, but you don’t have enough in superannuation and want to retire soon or you may be bored and want to tackle another business adventure. With your accountant consider various strategies that can transfer business wealth to superannuation. Also good to include a financial planner in these discussions.

If you are looking to sell your business, your accountant can help you spruce the business accounts and business strategy in readiness for sale. For example, does the business have key man risk – are there staff that could manage the business if you are not there?

HOT TIPS:

1. At your annual general meeting ensure there is an Agenda item – Personal Financial position and Aspirations.

2. Make superannuation contributions and consult a Financial Planner.

Cashflow and taxes

Your accountant can help you forecast cashflows and tax instalments. Unexpected taxes can be enough to trigger a downfall for a company especially coupled with an unexpected downturn in business or unexpected, extraordinary expense. Tax planning is best done around April each year to ensure correct strategy is utilised prior to the new financial year commencing.

Tax planning ensures appropriate wages are paid to owners, dividends and division 7A loans considered, trust minutes prepared, and federal budget tax initiatives considered.

If you are experiencing cashflow issues, talk to your accountant who may assist in reviewing your drawings from the business, your billing and debt collection systems, and assessing options such as R&D Grant, Export Grant and other government grants.

HOT TIPS:

1. Communicate regularly with your accountant – quick phone calls, emails and more formal meetings annually or 6 monthly.

2. A simple cashflow forecast done at least monthly can provide the necessary warning of cashflow issues. Your accountant can set this up initially and you or

your accountant can maintain. Ensure the last month forecast is updated to actual cashflow movements to test your forecasting accuracy.

Compliance

It’s important that business owners stay on top of their tax compliance in partnership with their accountant. The ATO is also ramping up its compliance audit activity around GST, income tax, FBT, Trusts and Division 7A loans. A payroll tax audit or a forgotten Division 7A loan can significantly increase business or personal income tax burdens, undermining business success.

HOT TIP: Lodge BAS and Income tax returns on time. The ATO is more considerate to taxpayers who have a history of good tax compliance.

Purchasing a property

Whether the property is a home, investment or commercial property for the business, you will need your accountant’s assistance in preparing financials for borrowing purposes. If considering various alternatives, your accountant can compare taking a cashflow approach. A good accountant will also consider the impact on the business that a significant borrowing may have and return on investment for commercial property investments.

For more insights and tips into purchasing a property with a business partner, check out our free whitepaper.

HOT TIP: To ensure the business can support a significant borrowing, prepare a breakeven cashflow analysis with accountant – this will determine the minimum cash inflows required to meet expenses and loan repayments.

Systems, processes and payroll

Are your operations systems cumbersome and not integrating with your General Ledger system? (Generally, Xero or MYOB). Talk to your accountant and organise a review – chances are they will know of an alternative system or process to minimise the administrative burden. If you wish to consider an AI solution or outsourcing, your accountant should be able to provide some valuable insights or work closely with your preferred IT provider.

How clunky is your payroll system or processes? All timesheets, rosters, leave requests should be digital, HR policies readily available to staff, and employment contracts stored conveniently. Clunky systems may be enough to cause valuable employees to leave your employment. Failure to pay employees on time or in accordance with the applicable legal requirements not only can result in irritated employees, but can have serious consequences for employers: including penalties and fines imposed by the Fair Work Ombudsman or relevant industrial tribunals, orders to back-pay employees for any unpaid wages or entitlements, and legal proceedings initiated by employees for breach of employment contracts or underpayment of wages.

HOT TIP: Know your Fair Work obligations and discuss any concerns you may have with your accountant.

Summary

Accountants can play a crucial role in business success beyond compliance, serving as valuable advisors for business strategy and problem-solving. A good accountant will emphasise the importance of cash flow management, tax planning, and structuring to optimise financial performance. They can also assist in forecasting cash flows, managing compliance, and streamlining systems to enhance efficiency.

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