4 questions you should ask your accountant
Ideally, you and your accountant are more than just “adviser” and “client”.
With your combined skills, expertise, and shared mission to support a thriving business, you should be more like business partners.
The key to achieving success in any partnership is, of course, knowledge and expertise, but more important than that is strong communication. If you can’t ask your accountant the questions you need answers to, are they really going to help you grow your business?
If your accountant can’t explain tax and GST and payroll concepts to you so that you understand, are they really giving you great advice (I mean if you don’t understand it how on earth can you tell if it is great advice?)
At your next meeting, be sure to ask your accountant these four important questions.
1. What is my best strategy for increasing revenue?
Every business owner strives to improve profit margins – but the best way to quickly and/or sustainably grow revenue will vary from business to business.
When reviewing your financials, ask your accountant to pinpoint and suggest smart strategies for driving greater revenue. For your unique company that might mean focusing on new leads, encouraging customers to buy more frequently, incorporating cross-selling or up-selling, partnering with others and/or re-thinking your pricing strategy.
If you just report all income as “sales” how on earth can you work out what revenue streams are successful or not? Your accounting data should show this detail.
2. How would you assess our financial performance this quarter/year?
It is part of your accountant’s job to stay current with your company’s financial statements and reports (i.e. your balance sheet, profit and loss statement, and cash flow reports).
Some small business owners – especially those who lack confidence in their financial literacy skills – may only want to know the basics, in simplest terms. Let your accountant know you’d like a more thorough analysis of your finances when you next meet, and help understanding what the numbers mean.
Ask for key ratios, like your gross profit percentage, and an assessment of the big picture, drawing comparisons with past performance as well as trends in your industry.
Also ask for any insights your accountant might have into the reasons for new or surprising developments, and what you can do to correct areas where your business is falling short – as well as what actions you can take to continue any positive trends.
3. How can you help me grow my business?
Your accountant should be prepared to offer professional advice to help your business expand and grow over time.
Scaling a business can be tricky as it requires a company to do everything it must to keep their customers happy while adapting to change – such as new staff and new systems to accommodate a greater volume of customers.
Financial systems may need to change as your business expands; likewise, your company’s financial management may need additional support as you transition to a larger company.
Ask your accountant how you can best work together to facilitate smooth, sustainable growth with minimal disruption to operations, and for tips on how to successfully scale based on past experience with other small business clients.
4. What are your most successful clients doing?
Chances are your accountant serves as a trusted advisor to a number of clients – and therefore, will have plenty of experience for clients who have faced the same issues as you.
Neglecting to ask your accountant about their clients’ success stories (and also the pitfalls to avoid) is a missed learning opportunity. Even if a business has little in common with yours – operating in a different industry, or as a seller or products versus services – there’s value in learning what yielded impressive results for another company.
If numbers are not your jam, you need to find an accountant or BAS agent where that is what they live and breathe. Feed off them, sponge off them, soak up their knowledge. That is what you pay them for.