How these 3 common misconceptions about accountant affect your business

Many small business owners assume that a healthy business will remain healthy – despite overwhelming statistics that suggest that 80% of businesses fold within 5 years.  Just like you take your car for regular servicing, it’s just as important that you remain proactive and give your business a warrant of fitness. 

You pay your mechanic to diagnose problems with your car before they become serious or cost more to fix (or even worse – potentially dangerous).  Equally, when problems are evident with a business, much bigger issues (and potentially threatening the business’ existence) can be averted. 

My team and I at Business Advisory Accounting & Tax Services pride ourselves on being more than accountants.  For many of our clients, we provide monthly management accounts to help them perform their own “business health checks” and help them project cash flows and profits.  Correctly timing some financial transactions can affect a company’s bottom line quite dramatically.

Another misconception is that using an accountant is expensive.  A small business, operating under the benefits of a limited liability structure, should be able to have monthly management accounts, annual financial statements and tax returns prepared for less than the cost of a latte & biscotti in a swanky Auckland cafe. 

Isn’t it worth investing less than $5 a day to eliminate the hassles and stress of maintaining your books?  Wouldn’t your time be better invested growing your business, rather than crunching numbers?  It’s well known that businesses that do not use an accountant are more likely to be “selected” for an audit.

The final misconception is that business owners think that they can do their own accounting.  And in many cases, they aren’t qualified to do so.  I know that as New Zealanders we are famous for our DIY approach.  But there are some tricky jobs that are best left to professionals. 

I wouldn’t attempt to build a new extension on my home, so why would a builder handle their own book-keeping?  The person who carries out the same job, day in-day out, will have the proper training, skills and tools and complete the work more efficiently.  My extension would probably fall down or leak after the first storm.  At the same time, the builder’s business may be “leaking” cash or is unprofitable. 

Just as I may not detect a small leak in my roof for a while, a small business may “leak” cash and it may be too late to fix.

I hope this article has dispelled a few common misconceptions about accountants.

If our monthly management accounting service sounds like something that you might be interested in, Mark Gwilliam can be reached at 09 449 0417.