How to get the most out of your accountant

In the second of a three-part series about running your own business, we look at how basic finance skills are vital, even with an accountant on-side.

One of the biggest headaches for any business owner is managing the books. There are only 24 hours in the day and managing your receipts and reviewing your tax structure are jobs that can easily get lost in the shuffle.

For many of us, bookkeeping and taxes aren’t strengths and outsourcing your accounting is a smart way to relieve some of the pressure and frees up time to do the things you love for your business.

Although your accountant will do the fiddly stuff, you still need to know what is going on.

This will help you get the most bang for your buck and will prevent a night scrabbling through a shoebox of receipts hours before self-assessments are due.

Michelle Fox, Director of Fox Accountancy Services (Manchester) Ltd encourages clients to gain basic finance skills so that they get the most value from her services.

Client know-how makes better teams

“Encouraging clients to gain a decent knowledge of bookkeeping, and dabble with the very basics of accounts and tax legislation, makes the business process much easier – and our working relationship smoother.

As accountants, we are the professionals, always on hand to give advice and turn our skills to pretty much anything. But, if clients want the best value for money, it’s a great idea to invest in learning some basic skills of their own.

To be fair, even if they don’t do any of the work, but they have the knowledge, it helps. They have better understanding of what I need to do my job, and a rough idea of how to present it, and that can go a long way.

One prime, and often missed, reason for taking the time to learn some basics, is that HMRC will no longer accept the “oh I just left it all to my accountant” excuse. They expect the trader to take some responsibility for what they sign their name to.”

And there’s the cost factor

“If a client understands the basics, they can use that money to invest in a more involved accountancy service, such as tax planning, which could be deemed money better spent. We accountants want our clients to flourish.

We want them to succeed in business and be our clients for a long time. That’s why I always advocate entrepreneurs developing their skills more widely, so they understand how businesses function.

Most businesses are born of a great idea. These ideas are the seeds and, to grow, you need business skills. Your accountant is here to help and, like most things in life, working as a team brings better results.”

Top 4 questions to ask your accountant

It’s important to know what to ask your accountant. Michelle has prepared her top four questions for any business owner.

1. To get prepared for tax season, what tasks do I need to do in advance of the deadline?

Preparation, preparation, preparation. This is the only way to survive the tax season with minimal stress. Speaking to your accountant at least six months before the deadline, about a strategy to decide what needs to get done and when, will save you a headache down the line.

2. Can you set me up with a simple bookkeeping system?

A simple spreadsheet, or some guidance and training with bookkeeping software, can cut fees long term. Getting your accountant to personalise your system with you, means you are both on the same page. Simple tweaks can save a lot of analysis work at the year end, and save money.

3. What is unique about my industry that I need to consider?

A home cleaning business will have different considerations to a tour guide operation. The nuances of each industry will have an impact on the kind of expenses you need to manage and the paperwork you need to file. This is a good opportunity to discuss whether VAT registration or incorporation might be an appropriate option.

4. How do I reduce expenses without compromising on quality?

Learning how to provide great value to your customers at the lowest cost possible is the key to making profit. Many small business owners are often unclear about how much their businesses cost to run, let alone how to reduce these expenses. Your accountant will help you identify the best way to tighten this up. And the discussion of expenses can also lead you to talking about items you can claim for that you might not have thought of, such as mileage and working from home allowances.

“I always recommend clients watch the HMRC webinars which are geared to the small business. I send links, copy articles, and encourage reading of the HMRC guidance emails – and that’s just as a bare minimum. AAT offers a Level 2 Award in Accounting Skills to Run Your Business.”

Check back in next Wednesday for part three of the series.

For further guidance and advice on running your own business, read last week’s blog here.

AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.