Services your Accountant can supply

In recent months, there has been a fair bit of discussion about the role that accountants can play in offering a more rounded service for small/medium enterprises.  A number of surveys have been conducted, notably by CCH and MYOB, which have identified that small businesses are looking for a wider range of services from their accountants.

In the main, these services are considered to be necessary to help ‘value-add’ to small businesses.

Are you satisfied with the services that you’re receiving from your accountant?

Services That Small/Medium Enterprises Are Looking For

Some of the additional services that accountants need to be providing in 2014 include:

E-Business Advice

As you move more and more into ‘cloud technology’, are you satisfied that your accountant is keeping time with you and is able to supply the types of services you require?

Management of Costs

The CCH survey, which was finalised in April last year, has indicated that ‘management of costs’ is the biggest single issue confronting small business operators.

Are you satisfied with the input you’re receiving from your accountant on cost management?

Management Monitoring

The next major issue identified by the small/medium enterprises which were surveyed was ‘management monitoring’.  I interpret this to mean assistance with all aspects of managing the business and would probably include:

• Debtors’ Management
• Cost Control
• Preparation of Regular Financial Accounts
• Costing Exercises – to determine if the right decisions have been made on various strategies.
• Business Plans – business plans are very important.  They’re like maps for tourists.  If you haven’t worked out where you’re going, how are you going to know when you get there?
• Assistance in Raising Capital and Loan Funds – more and more businesses are turning towards angel investors, in an attempt to raise capital to expand their business operations.  Unfortunately, you will not achieve a satisfactory outcome, unless you have a properly prepared and supported business plan, budget, cashflow forecasts, intellectual property strategy and a proper basis for the proposal to the potential investors.

Accountants, offering a range of services other than taxation, can assist you.

Expansion Advice

The next major area from the CCH survey was expansion advice.

• Should you open another store in another location?
• Should you buy another business?
• Should you buy another farm?

Budgets and cashflow forecasts are very important to help businesses plan their future.

Accountants As Chief Financial Officers

Accountants, who are offering business advisory services, can offer Chief Financial Officer (CFO) type services, which will help small business operators with their everyday activities, virtually on the same basis that you would have if you had an accountant working for you full-time.  In other words, a ‘virtual CFO’.  You might only use this service for 30 minutes a week.  Some businesses might want the services of a CFO-type role for four to five hours a week, or even a day a week.

Accountancy businesses, which are offering a wider range of services, can give you a proposal to supply this service to you for a full year.

The types of activities that would be looked at include:

Costing on ideas

Many CEOs and general managers dream of strategies but, unfortunately, a lot of them come unstuck, because they haven’t been subjected to a proper cost analysis.  Unfortunately, sometimes, the business has gone ahead with the project without proper input on what the costs are likely to be.

Your accountant, acting as a CFO, can offer you that insight into the costings of particular decisions.

Debtors Monitoring

Debtors are an enormous problem for small/medium enterprises.  According to Dun & Bradstreet, the average debtors’ days outstanding is 54 days.  Your accountant can assist you by implementing an appropriate system to reduce debtors’ days outstanding.

Cost Control

As mentioned earlier, cost control is a huge issue for small business operators.  Your accountant can help you to analyse your costs and develop strategies for a reduction in costs.

Your management accounts should be prepared on a monthly basis, but targeted at your management team.  Not a set of accounts prepared for the taxation office, which don’t really say much at all, but an in-depth set of financials that drill down into the real costs of operating the business.

The management accounts should be for each individual unit within the business.  It doesn’t matter if, at the end of the financial year, the various profit and loss accounts consolidate into one overall profit and loss account.  The benefit of having the various profit and loss accounts prepared on an individual management group basis is that it allows whoever is in control of that unit to receive a profit and loss account, to tell them how their unit operated within the business.

Budget Comparison

It’s important that budget comparisons are prepared each month, with an in-depth review of the reason for variances between the budget and actual and, if there’s a need for remedial action to be taken, which strategy can be implemented.

Budget and Cashflow Forecasts

The budget and cashflow forecasts, which hopefully you have prepared at the beginning of the financial year, need to be updated every month, based on actual performance.  There’s no use producing budgets and cashflow forecasts if you don’t use them as a means of monitoring how the business is actually performing on a monthly basis.

Key Performance Indicators (KPIs)

KPI calculations are also a very important role your accountant can perform for you.

Personal Property Securities Register (PPSR)

Some of you may have heard PPSR mentioned from previous editions of Survival Hints for Small Business series, on the problems the Personal Property Securities Act (PPSA) is causing in Australia.

From the last couple of weeks, there’s been another significant court case, bringing the total court cases to six in Australia, all of which have been won by secured creditors.  In other words, the liquidators have won, because the businesses, which actually paid for the particular asset, have not adequately protected themselves by registering their interest on the PPSR.  This is an enormous issue with which accountants can assist you, to ensure you have effective systems operating in your business.

Accountants Can Assist

Accountants, who are offering business advisory services, can assist their clients to identify strategies to effectively operate your business, by supplying a CFO service.

In the first instance, it is advisable to approach your accountant and ask whether they are prepared to assist you in offering a CFO-type service to your business.  If they are unable to assist you because they are not offering this type of service, please send an email to peter@essbiztools.com.au with your location and postcode and we will send you the names of accountants within your area, who are offering these types of services.

ESS BIZTOOLS has developed hundreds of articles and other templates, to assist small business operators to improve their business operations.  A complimentary copy of our article, ‘Utilisation Of Accountancy Businesses Offering CFO Services’ can be downloaded below.