You’re an expert when it comes to crunching the numbers and helping your small business clients achieve their financial goals, however big or small. Having a strong relationship with your clients, understanding their needs and aligning these with the appropriate strategies are some of the key skills to being a good accountant.
One of the best ways to achieve a successful relationship with your clients is by asking the right questions to really understand and guide your clients onto the right financial pathway. In our guide we explore some of the crucial topics that you need to bring up with your small business clients.
Working closely with your clients, you already have a good insight into what their current financial position is and their financial capacity. It’s important to use these details and get a grasp of what their future business plans are.
If there are major plans that they have in place to expand, you need to alert them of how this may affect their valuation as a business and any changed tax implications. Let’s take a look at some of the factors that may impact a small business’ financial position when they are looking at expanding:
- Changing their business location– this may mean a change in liabilities and assets if they are looking at purchasing a new premises, changing their lease payments etc
- Employing more staff– this is going to affect areas around things like tax brackets and super
- Merging or acquiring another company– this could create changes to their current business structure and needs to be reassessed to ensure the most effective set up is in place
Managing inventory correctly is something that is of particular importance for businesses that operate in sales and reselling of goods. They need to be aware of any applicable sales tax rules and regulations, something which can change often and needs to be closely monitored.
Some of the things you can discuss with your clients include:
- Check that the processes they currently have in place for restocking and ordering are maximising cash flow
- That all unsold inventory is accounted for and tracked
- Making sure sales tax is being calculated and collected correctly
Another area of your client’s business that you need to need to have a chat about is their risk management plan. While it is exciting to have ideas for growth and expansion, you need to also make sure that they have some form of protection in place for when things don’t go to plan.
Other than being able to provide strategies to keep them financially sound, these are some of the other areas of risk management you can check with your clients:
- Are they meeting all the correct compliance, security and privacy regulations required by their business?
- Are there safeguards in place to protect them from potential issues of fraud?
- What safety measures is the business taking internally to protect it from risks?
Talking to your client about types and levels of business insurance they may want to have in place is one step you can take to help your clients with their risk management plan. No matter what type of business they are running, there is always a degree of risk. Some of the key types of insurances they may need to look at include:
- Public Liability insurance*
- Professional Indemnity insurance*
- Business Insurance* (Contents, Building, Portable Equipment, Machinery Breakdown etc.)
- Personal Accident and Illness insurance*
Going beyond the business as usual kind of chats with your client, discussing their financial plans for the future can sometimes involve some outside the box thinking. Focusing on topics that you may not generally discuss or review about their financial situation may evolve into some new strategies to guide their financial plans.
- Delve into strategic decisions like what could be done to improve cash flow
- Get them thinking about their future financial situations like retirement and wealth management
- Consider any other major investments, charities and gifting that may be in the pipeline
Tax laws and rules
The ever-changing tax rules and regulations in Australia can be hard to keep up with, so spending some time to review and educate your clients with what they need to know is worth-while. Areas to focus on may include:
- Asking them how confident they feel about the processes they have in place to follow and comply with regulations
- Explain any new laws or changes to regulations which impact their business
- Run a internal review to assess for any red flags which may trigger a tax audit
Ways to help improve revenue
Understanding your client’s financial position and being able to assist with solutions to increase their overall revenue is definitely going to put you in their good books. Ultimately you want to be able to see your client’s business grow, and by providing some of the following tips you can help make it happen:
- Ask them to work on retaining existing customers, this will assist with the long term financial position
- Invest in putting energy in generating new leads and enquiries
- Make sure these leads are converted into new opportunities to generate cash flow, i.e. new customers or projects
- Increase sales from existing customers
- Assess the pricing strategy regularly
- Think of ways to sell more with each transaction
- Make sure they have a solid knowledge of pricing and the impact of discounts and price increases on the bottom line
Instill good accounting basics
Make life easier by educating your clients on the basics of good accounting habits they can implement in their day to day business operations. These are some simple tips that you can suggest for them to start doing:
- Use accounting software to manage their finances. There are plenty of user-friendly options out there that can even sync up with your own accounting system, making the transition and sharing of information effortless, especially at tax time
- Encourage them to keep digital copies of their receipts and statements.
- Have regular contact with each other, don’t just leave it to tax time to speak!
Being an accountant involves a great deal of responsibility when you’re handling your client’s finances. While you are busy looking after them, it’s important that you have the appropriate types of business insurances in place to keep you protected.
At BizCover we offer a range of business insurance solutions tailored to suit your accounting business needs from some of Australia’s leading insurers. Visit us online or give us a call and experience insurance made easy today.
*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.