6 Topics Small Business Owners Should Discuss With Their Accountant

How often do you seek out your accountant’s advice on other areas of your business excluding taxes? Small business accountants are savvy financial advisors who can assist you with more than just filing tax returns, and regular meetings with your outsourced accounting service provider can help you keep on top of your financials.

You need a professional partner who understands small businesses and can offer you strategic financial advice, help you to manage growth, ensure you’re in compliance, uncover potential business issues, and keep you on track. You need a strategic financial partner who is in close contact, asking questions and ensuring that they understand your business intimately.

If you haven’t already had the following discussions with your small business accountant, it’s time to discuss the following topics.

Financial Health

At its heart, this question is all about cash flow. With the help of outsourced accounting services, you should be proactively monitoring your cash flow, finding ways to increase your cash flow and reduce costs. Understanding your cash burn is a foundational financial exercise—without a deep understanding of your cash burn, you’re setting yourself up for trouble. Your outsourced accounting provider should support you with day-to-day budgeting to lower your cash flow, helping you refine your accounts receivable and accounts payable systems, and maximizing your pricing strategy—to name just a few tasks that greatly impact your cash flow.

2. Growth

If you are planning any major changes to your business, it could affect your valuation—and your tax liability. Inform your accountant of any liabilities or changes in status including:

  • Expanding into new locations
  • Adding or making changes in staffing
  • Merging with or acquiring companies
  • Positioning the business for acquisition or sale

3. Break-Even Point

This refers to the level of sales required to fully cover general business overhead, and it is the point where you start to move into profit. Depending on your business, you might break this down to a monthly, weekly or daily break-even point.

Make Better Business Decisions Today. Bookkeeping Services Starting at $199/month

It is not as simple as it might seem, since some costs vary with sales volume, whereas others are fixed. Your small business accountant in Phoenix will be able to analyze your cost structure and let you know the level of sales required to break even. Depending on your business, if your average transaction value is predictable, you will even be able to break this down further into units required to be sold. If you don’t know these numbers, consider hiring outsourced accounting services to do some work on it for you.

4. What Drives my Revenue?

If you ever think (or if your accountant ever suggests to you) that you need to increase sales, do you know where to start? What are the key drivers of your revenue? In many businesses, revenue can be broken down to this formula:

Number of Customers  x  Transaction Frequency  x  Average Transaction Value = Revenue

It may or may not be this same formula for your particular business. Ask your accountant where you should focus. Your accountant might tell you to concentrate on one or more of the following areas:

  • Retaining existing customers
  • Generating new leads or inquiries
  • Converting leads to new customers (or new jobs)
  • Getting existing customers to buy from you more frequently
  • Analyzing your pricing strategy
  • Looking at ways to sell more on every transaction

There are a variety of strategies to look at including pricing. Far too many businesses have little knowledge about the impact of pricing on their sales. For example, if your small business is offering to discounts to people who don’t ask for them, or are making assumptions about what will happen if they increase prices, you may be leaving money on the table.

5.  Risk Management.

Nearly 75% of small businesses don’t have a plan in place to protect their business from operational disruptions—either planned or unplanned.1 Broach the topic of continuity planning with your accountant and ask for input on ways you can mitigate risk in your business. Questions that you should be prepared to address include:

  • Are insurance policies up to date?
  • Are stringent compliance, security and privacy standards being met?
  • Is the company protected against fraud?
  • What internal controls are in place to protect the business?

5. Are there any industry-specific tax regulations that I should know about?

Some tax regulations affect only specific industries, such as freight tax in the shipping industry, food tax in the restaurant industry, and tax on trade-in value in the automotive industry.

Industry-specific grants, subsidies, regulations, and corresponding deadlines and changes can greatly impact your business. Talking to an accountant with industry expertise can help you avoid paying taxes you don’t have to pay.

Final Thoughts

It’s easy, as a small business owner, to get so busy in day-to-day operations that you don’t take the time to plan for the big picture. As you make the most of those regular meetings with your accountant, you should see positive change in the way you organize and handle your finances. For any small business owner, that’s a great step toward a healthier business.

Limitless Investment and Capital’s Outsourced Accounting Services In Phoenix

Limitless Investment and Capital is a specialized accounting outsourcing firm since 2013, providing skilled and experienced accountants at economical rates. We are proactive accounts helping small businesses understand their financials to make better business decisions. We have strong functional outsourcing expertise in end to end accounting processes covering daily accounting activities, month-end, and year-end account finalization processes, employee reimbursements, payroll processing, management reporting, and financial analysis. Schedule a FREE financial consultation today.

Schedule a Free Financial Analysis Today