Auckland Accounting Firms – The Same Or Different
Most people think that one accountant is much the same as any other. After all, they all work with the same tax laws and regulations so there can’t be much room for flexibility or creative thinking.
All that is true but there are two types of accountant you need to know about.
The biggest group is those accountants who simply offer compliance services.
First, there are those accountants who simply offer compliance services. For many people simply having your annual accounts produced and having your tax assessment made is enough. They may also file your actual annual tax return for you. However none of this actually adds any value to your business.
The much smaller group is those that offer business advisory services. This can take the form of scenario planning which is showing how your business might perform under different circumstances. These could include raising prices, reducing sales volume, the change in net profit or how your debtor days affect your ability to negotiate better terms with suppliers.
Without going through these different planning methods, your business is unlikely to ever make significant improvements to the bottom line. Even worse; your business could be heading for a major problem like cash-flow drying up because you have expanded too fast. So it is important to find an accountant that can offer business advice.
This sounds like a good idea, working with someone who is an expert with financial numbers and reports but again not all business advisors advise. Plenty of accountants claim to offer business advice yet few actually do so.
One of the problems for many accountants is that they do not get out to see businesses operating and to fully understand the demands of the market on a business. Knowing how to interpret a financial report is one thing but actually understanding what makes a business better or how a local market operates is a different thing all together.
One of the keys for small business owners is that the accountant should understand local markets. Almost by definition, a small business operates in a small market, often a very localised market. If your accountant lives 50 miles away, it is unlikely that they know what is happening in your locality.
Another great benefit a good accounting firm can bring to your business is a network of powerful and worthwhile connections. A good business accountant will have strong local relationships and be able to make introductions for you to other local businesses that you may not know.
Three keys to choosing an accounting firm
First, look for a local accounting firm close to your small business so that they can understand your local marketplace.
Secondly ask the accounting firm what sort of local networks they have.
Finally, does the accountant really understand the concept of providing business advice or are they just saying so to look better? Check what improvements they have been able to bring about for other businesses.