Why a proactive accountant might save your business

Support navigating uncertain times and operating reactively is a trap for small business. A proactive partnership with your accountant can protect and grow your SME through uncertain times.

Avoiding the reactivity trap

Do you need to break the pattern?

SMEs are facing rising inflation, geopolitical issues and persisting pandemic challenges. In uncertain times, it’s easy to fall into survival mode and operate reactively.

How do you interrupt this pattern? Proactive, strategic advice and planning support that sees beyond the next quarter. The right accountant supports you to take stock of what you have, brings a critical eye to your operations, and encourages stability through proactive forecasting and planning.

No news from your accountant is not necessarily good news. Let’s explore how a proactive partnership with your accountant can protect and grow your SME.

Proactive planning

Tax

Many SMEs think about tax only when they scramble to meet a deadline for their bookkeeper or accountant. You may see tax as inevitable, and it never feels like a good time to try and improve your net tax outcome.

Working with a proactive accountant throughout the year – one who takes the time to understand your business and financials – can minimise your tax payable while growing your net worth.

Tax is not set and forget. Strategies need to be maintained, reassessed and tweaked throughout your business journey as economic and operational circumstances, legislation and compliance responsibilities continue to evolve. A good accountant acts as your eyes and ears ensuring you stay ahead of the tax game.

Debt

There are certainties: death, taxes and debt. There’s an important distinction though between good debt and bad debt – and a proactive accountant knows the difference.

They help you identify the least expensive borrowing strategies, with the right mix of repayment flexibility and low interest. They can also advise whether spare cash should be used to pay back debt or reinvested into your business. Managing your debt wisely is key to setting your business up to grow.

Investment

It’s difficult to know where to start with business investing, so spare cash often ends up sitting in the bank accruing very little interest. Depending on your circumstances, your accountant may start by setting a strong financial foundation, detailing your cashflow revenue and cost forecasts.

They’ll explore a range of investment strategies and options to meet your investment goals, and assess your risk tolerance and capacity to ensure you protect the funds you invest and avoid costly mistakes.

Strategic planning for financial milestones and goals

Strategic planning is a process of identifying where you want your business to be and then charting how to get you there. You can’t get where you want to go without the financial resources to execute your vision. Financial planning is the process of connecting your financial milestones, forecasts and goals with your overarching strategy. This requires an in-depth understanding of your financial levers coupled with some big picture, strategic thinking. The best proactive accountants deliver both.

The process of getting external eyes on your strategic planning can reshape your business.

A good approach aims for the stars to set you up for growth, but also incorporate some backup strategies should you come crashing back to earth. As with all good plans, it should involve a process of ongoing evaluation and adaptation — a good task to leave in the hands of your accountant.

Business and income insurance

When times are uncertain, it pays to protect what we can, within reason.

Depending on your business type or the locations you operate in, you may be contractually or legally required to carry some level of insurance – workers’ compensation or public liability. Are you across your obligations?

Other types of insurance are optional, but may mitigate risk and protect your:

• Business assets (equipment, premises, stock)
• Customers
• Employees
• Earnings

If you’re the SME owner, you should consider protecting yourself financially. What happens if you’re out of action? Income protection insurance can replace up to 80% of your income if you can’t work because of sickness or injury.

If you’re juggling competing expenses, it is possible to over-insure. Ask your accountant about balancing your risk profile against premiums. Striking the right balance offers adequate protection without stretching business costs beyond your means.

Have you got the right accountant?

Take a moment to see how your current accountant stacks up.

Have they taken the time to understand your unique business and goals?
Are they in regular contact with you to assess your progress?
Are they approachable if you have questions?
Have they helped you to optimise your tax planning, prepare a financial plan and pay for the right level of insurance?

Talk to your accountant about what’s missing, your expectations, and positive change. 

Partner up to plan ahead

Managing your business can be overwhelming at the best of times. One thing is clear – planning ahead is always better than cleaning up a mess.

Don’t be the business with an accountant who contacts you once a year. Find an accountant who acts as the proactive partner you deserve, communicate with them regularly and watch business flourish. 

Ask how a proactive partnership could protect and grow your business.  
Contact us at SBG Accountants.