So you are a successful entrepreneur. Your fledgling startup has gone from zero to hero and now you need an accountant and business advisor to support your growing business. Sometimes, success in business can be just as scary as failure. Having a rapidly growing business presents many daunting tasks for a young entrepreneur and it can be challenging to manage all the aspects of your business. From tax planning to business structuring, there are plenty of things to consider and a good accountant will have the answers to all of them. Here are five questions to ask prospective accountants to figure out if they’re the right fit for you.
Question 1: What is the most effective structure for my business?
A lot of the time, when people are newly getting into business and considering structuring, the main considerations are generally risk, asset protection, ease of introducing new investors and tax. Let’s face it, if you’re going out trying to start a business, it’s unlikely that you’re a risk-averse person. The ease of running a business as a sole trader or partnership makes it simpler to start out, and there is no problem with that initially.
Fast-forward a couple of years. Your initial risks have paid off and the business is now seeing significant success. The risk profile of the business may not be too much of an issue anymore, but your tax liability, payroll and governance structure are. This is why it’s important to be asking your prospective accountants structuring questions as early on in the process as possible. Effective accountants will be able to advise you on how best to structure your business to minimise your overall tax bill as well as reduce your risk.
.jpg "Lifecycle-Full-series-(1).jpg")
Question 2: What targets can I set for my business?
Motivational speaker and bestselling author, Zig Ziglar, said it best: “If you aim at nothing, you will hit it every time.” This is especially true for young entrepreneurs with growing businesses. Setting targets for your business is essential to give you a sense of direction and purpose, but also to allow you to look back at how far you have come.
Targets can include profit, revenue, and even personal income goals. An important target, depending on the stage and size of the business, is the ESG contributions of the organisation. This is a rapidly evolving area businesses now need to consider.
Moore Australia follows a straightforward five-step approach to developing effective ESG strategies. It includes Assessment, Strategy and Implementation, Measurement and Reporting, Assurance, and Optimisation. See our article here for more details on how we can help.
Question 3: How is my business really performing?
“Study the past if you would define the future.” Confucius isn’t usually too relevant in the modern-day accounting industry, but looking back is a valid way to see where your business is trending. If it’s positive, you need to highlight what is working and why, so you can replicate that. If it’s negative, you need to understand why and implement changes as soon as possible.
Having a qualified professional take a deep dive into your business’ performance over the last couple of years will likely yield results. Don’t be afraid to ask for some detailed analysis on your business.
The only way to stop ineffective strategies is by first being able to identify them.
Question 4: How often should you communicate with your advisor, and what is your preferred method of communication?
There is no right answer to this but setting clear expectations in the beginning of your business relationship will ensure that there are never any incorrect expectations when it comes to communication.
The relationship between you and your accountant relies on trust. This trust may take time to build, and effective communication will be key. Additionally, if there is something you’re unhappy with, you have a conversation that you can refer to. Being clear upfront will give both parties some accountability when it comes to communication and should lead to a smoother and more productive relationship.
Question 5: Are there any upcoming or recent tax updates that will affect my business?
The Australian taxation system is known to be dynamic. Constant changes and updates mean that, as a business owner, it is essential to stay up to date with the latest tax laws and guidance issued by the Australian Taxation Office (ATO). Failing to do so may result in financial implications that can significantly affect your business’ bottom line. This is something to keep in mind for companies, even outside of the usual corporate income tax. As an example, companies with a fast-growing staff may need to consider the implications of another fluid area of tax, Fringe Benefits Tax (FBT).
Fortunately it is relatively simple to stay abreast of all these changes, just by having someone in your corner who deals with it all on a daily basis. Our Business Advisory team have years of experience behind them and have provided tax advice to thousands of others.
Choosing the right accountant is crucial to the success of your business. By asking the right questions, you can determine if the accountant is the right fit for your business needs. A good accountant will be able to provide valuable insights and help you make informed decisions. So, take the time to find the right accountant and build a productive relationship that will benefit your business in the long run.