When a business owner is looking to hire staff to help run their business they usually have a set criteria that the potential employees must meet. They want staff that is going to be loyal, enthusiastic about the Company, and willing to learn all the ins and outs of the business as it relates to them.
The Company owners know that there has to be enough staff on hand to make sure the Company is fully operational. One business area that often lacks the expertise that is vital to the business is the accounting department. Yes, there may be staff on hand to do the accounts receivables, and the accounts payable, and that is enough to keep the company functioning at the administrative level.
Then it is common practice on a yearly basis to gather all of the figures together and run off to the accountant for the tax preparation. This professional does his job and if necessary prepares the financial statements to complete the tax returns. This is really appreciated by the business person as tax time is always such a hassle.
At this time the accountant will normally ask the client to review the financial statements and the tax returns. These documents are somewhat complex, and in many cases the individual giving their approval really doesn’t understand the details of the figures before them. The main focus goes to the profit and loss statement, and as long as the business is turning a profit then the Company owner is happy.
It might be well worth taking the time to gain a further understanding of these papers because they really depict the status of your business.
What the figures say….
Your expenses:
You can look quickly at your list of expenses and chances are you going to focus on the bottom line. Your accountant looks at each figure that led to that amount and can instantly see where you highest expenses are and perhaps advise you as to where you may be able to reduce these.
Your liabilities:
You know that you have accounts payable, and perhaps mortgages to pay, but what more can your accountant tell you about these? This individual is a financial expert and as such may be able to make suggestions to you that would reduce those liabilities or reduce the burden to the company that they are creating.
Your equity:
Your equity may not be actual money in your pocket but it is vital to the stability and growth of your Company. Once again you could glean some sound advice from this expert as to the best way for you to draw yourself a wage with the least amount of taxes.
Now this all sounds great, but unfortunately if you are only making use of this information at tax time, you now have to wait a full year to see the results of any of the suggestions that you implement. However, this doesn’t have to be the case if you decide to include your public accountant’s services on a more frequent basis. Adding the accountant to your employee’s roster as a consultant can be of significant benefit to your Company by keeping you informed as to its ongoing progress, rather than its yearly progress.
