Talking Cents

A few useful questions to ask your small business accountant

It is your accountant’s responsible to analyse your financial performance each year with you. The key point here is ‘with you’. Get them to point out key ratios such as days locked up in receivables and inventory, gross profit percentage and others. Not only that but ask them if your financial statement is good, average or bad. So what if they tell you your gross profit is 38%? Raise a few more questions as such what are the trend are like, it is increasing, declining or remaining as well as what is his or her insight of why the trend is happening.

Also query your accountant about the benchmark statistics, it is equally important as other data. Comparative data according to industry has become more readily available than ever. Australian Taxation Office (ATO) has plenty of data for a variety of industries and your accountant can easily access on their websites. They can compare your business to the benchmark and you both can have a meaningful discussion regarding actions that are has to be taken to fix weaknesses as well as building on strengths.

Your accountants generally work with a handful of business clients, some of their clients are very successful while some just do alright. So one useful question you can ask your accountant is that according to their observations, what are the top factors that make their clients successful? In all the surveys, accountants are ranked as the most trusted business advisor. By asking for their views, you are gaining deeper insights which you could probably pick up one two pointers to improve on your small business in Sydney or Melbourne.

Do make the most of the relationship with your accountant. Accountants should ask questions and so do owners. Another successful client is another achievement for the accountant’s portfolio so I am sure they don’t mind helping your business.