As the end of the financial year (EOFY) fast approaches, you may have started to think about bringing in a professional to help you through.
A good accountant can not only help you with your current requirements, but can also assist with ongoing planning to make tax time less of a headache. A good bookkeeper will provide you with ongoing support throughout the year, as well as backing up your year-end processes.
But how do you find the right financial professional for your business, and what should they be looking out for this EOFY?
What sort of help does your business need?
Every business is different, so business owners will have varying needs. Before you start looking for a financial professional, be very clear on your requirements.
Are your EOFY needs straightforward, or are you looking for more wide-ranging assistance? Do you see this as a one-off experience, or do you need ongoing help?
According to Kate Blecich, a business advisory improvement director at accountancy firm HLB Mann Judd, there are a number of signs your business may need to enlist the services of a financial management professional.
“Some signs include issues with cash-flow management, including being constantly under pressure for payments and collections, or the right information being provided to action decisions,” says Blecich.
If this is something you are grappling with, it may be time.
Do you need a bookkeeper or an accountant?
Once you’ve decided that you need to hire a professional, you need to find someone who is well suited to your needs.
Ms Blecich says that this can differ depending on what your business objectives are. You may need a bookkeeper, an accountant or both.
A bookkeeper can implement business management and accounting software and systems, facilitate payroll, enter data, take care of petty cash, keep records, and reconcile bank accounts. If your bookkeeper is a paid employee or registered BAS Agent, they can prepare and lodge activity statements, payment summaries and taxable payment annual reports with the Australian Taxation Office (ATO).
If your bookkeeper is a registered tax agent, they can do all the above as well as prepare and lodge tax returns.
In addition, many bookkeepers spend a good deal of time time implementing and improving business and management systems for their clients.
For more strategic business advice, an accountant might be the way to go.
Like a bookkeeper, an accountant can prepare your tax returns (provided they are a registered BAS or tax agent), but they can also provide business advisory services that can help you grow your business.
Most accountants have a Bachelor degree (in accounting, auditing, business, finance or taxation), and can get further qualifications by completing the requirements to be a Certified Practising Accountant (CPA) or by becoming a Chartered Accountant.
Blecich says that an accountant can start discussions prior to 30 June so that actions can be taken to improve the “year-end position.”
“The new year may start on 1 July from a financial perspective, but having your 2016/17 budget already locked in and targets being discussed will be imperative to their successful implementation,” she says.
“An accountant can also ensure that all information is discussed and as much as possible is collated prior to the end of the year,” she says.
Blecich says that accountants are also able to discuss trends and opportunities for the next year.
Questions to ask before taking the plunge
Once you have decided to hire a financial professional, Blecich says one of the most important things you can do is ask your prospective accountant to provide case studies and other forms of examples of their work.
“Ask about industry expertise required for the outcomes the business owner is hoping to achieve,” she says.
“Also, ask about networks and introductions that may be available through the accounting relationship.”
As EOFY approaches, consider whether the financial professional has:
- the skills and expertise to perform the tasks expected of them,
- experience with similar businesses
- makes customer service a priority
- is transparent about fees, and
- has the appropriate professional indemnity coverage.
EOFY red flags
Each tax year is different, but Ms Blecich says that there are some key things businesses can do at EOFY.
- Check to see if your startup costs can be immediately deductible.
- For business owners with thresholds under $2 million, check if the prepayment rule applies to you. This is where you pay 12-month subscriptions or expenses in advance and claim an immediate deduction.
- Don’t forget that small businesses are able to deduct assets costing less than $20,000.
Finding the right professional
Blecich suggests asking business owners in your network, or family and friends if they have any recommendations.
Looking online is a good way to locate either an accountant or a bookkeeper.
“Google some keywords. A proactive accountant or bookkeeper would have a website to draw your attention to their expertise,” Ms Blecich says.