The quality of the information you provide for your accountant can enhance, or limit, their ability to help you, explains Sarah Daly.
For many business owners, their accountant is their most trusted advisor. Usually, your accountant is the one person who really understands your business and is your first port of call for advice on everything from dealing with the bank and Revenue, to raising finance, growing the business and planning for succession.
However, your accountant relies to a great extent on the information that you provide to him or her. So, if that information is incomplete, inaccurate or out of date, it can have a significant impact on your accountant’s ability to help you. This is one of the reasons why many accountants encourage their clients to hire a bookkeeper or outsource their accounting to specialist service providers like GroForth.
Timely, accurate financial information
To understand your business and plan ahead, you have to be able to access accurate, up-to-date financial information. Unfortunately, the busier you are, the harder it becomes to keep on top of day-to-day administration. Orders can flying in the door faster than ever before, but unless you are raising invoices and getting paid in a timely manner, you could find that you are running out of cash.
It is an easy situation to fall in to, particularly in growing businesses where the volume of transactions is increasing week on week. The invoice that you were half-way through raising when you were interrupted by something urgent never gets completed and you don’t get paid. Let things like this slip and it becomes much harder to manage your business because the information you have access to is incomplete, inaccurate or out of date.
Outsourcing your accounts and bookkeeping
Accountants are all too familiar with the panic business owners experience ahead of filing deadlines when transactions and/or documentation is missing or anomalies are discovered that cannot easily be tracked down and resolved. This is why many accountants recommend that their clients outsource their bookkeeping or accounting to service providers like GroForth.
Outsourcing means you don’t have to worry about day-to-day record-keeping and reconciliations as the service provider looks after these tasks for you. Typically, tasks like data entry of sales and purchases, bank and VAT reconciliations, debtors lists, and so on are looked after by the outsourced service provider. Another advantage of outsourcing is that it can save you money as you don’t have to pay salaries and provide training or equipment for an in-house bookkeeper.
How realtime information helps your accountant
When it comes to helping your accountant help you, the cloud-based accounting solutions like Xero and SortmyBooks that are used by many businesses today make it easier than ever to access real-time information about a business. Sharing this information with your accountant can enhance their ability to provide timely, relevant advice.
By allowing your accountant to see the accurate state of play, they can get to grips with the ‘big picture’ and advise you on how to address potential problems like late payments, spot opportunities, and plan ahead for the future success and growth of your business. However, the information that your accountant can extract from your accounting system is only as good as the information that you put in. This is why it is so important to keep on top of day-to-day record keeping.
In our experience, growing businesses often spend money on marketing every month but hesitate to spend on accounting. This can be a missed opportunity as it can affect your ability to make the right decisions for your business. So, next time your accountant suggests outsourcing your bookkeeping, don’t rule it out on cost grounds. It’s a tax deductible expense that could actually save you money!
If you are thinking about outsourcing your finance department and would like more information about GroForth’s services, get in touch.