With school back this week and the January ‘kid-work’ juggle over (yeehah!), the return to a regular routine is the perfect time to review the key players in your trade business, including your accountant. If you’ve been complacent, channel your new-year motivation into making some changes.
While we’ve previously covered the 4 topics to discuss with your accountant, the purpose of this article is to provide a reality check about why you’re probably not getting the most out of your accountant. There are 5 reasons you’re stuck with a crappy accountant. It starts with you.
Mistake #1. You’re blind to your financial status
Money management is not in the toolkit of most tradies. You’ve become a tradie because you’re good with your hands and couldn’t think of anything worse than sitting behind a desk all day. That’s why you hired an accountant. The thing is: you’ve got to keep your eye on the money ball.
Many tradies in business we speak with don’t know anything about their financial situation. Turnover is totally different to profit. How can you make more profit, if you don’t know your numbers? You pay your accountant for financial advice and expertise, are you poking them for information?
Being blind to your financial status is a killer of good trade businesses.
Mistake #2. You don’t know your numbers
Let’s dig deeper. If you got asked right now how much profit you’re making, could you provide an accurate answer? If you got asked right now how much debt you’re in, could you give a detailed response? The only way to navigate the peaks and troughs of business is to know your numbers.
The earlier you can identify any financial wobbles in your trade business, the earlier you can work with your accountant to come up with a plan of action. When you’re meticulous with your financial details, you can mostly steer clear of any disasters and learn from your mistakes for next time.
Mistake #3. You’ve got no idea what questions to ask
TAFE taught you all the rules and regulations in your trade, the money and business stuff — not so much. There’s some key financial data and questions your accountant should know, you’ve just got to ask for it. Based on our own experience, we’ve developed these questions to ask your accountant.
When you set up your next meeting with your accountant, have these eight questions handy to help have an informed discussion. In this resource, you’ll also find an accountant audit checklist. By completing the audit, you’ll be better equipped to know whether your accountant is right for you.
Mistake #4. You’re cranky with the cost
Think of your accountant as an investment not an expense. Hiring an accountant based on price alone may come back to bite you. While spending a fortune doesn’t guarantee an accountant is right for you either, your aim is to get the full benefit of having an accountant in your corner.
Mistake #5. You haven’t outlined the role
Setting expectations is everything. If it appears your accountant has nothing to help you, reflect on whether you have clearly outlined the role you want your accountant to play. A standard tradie request is: BAS, PAYG and end-of-year complete.
Ideally, you’ll want your accountant to also help with:
- analysing your numbers
- Forward forecasting
- dashboard design; and
- financial advice.
Mostly, tradies are stuck with crappy accountants because they don’t set expectations or know what expectations to set. Don’t let this be you. Download Lifestyle Tradie’s Accountant Advantage resource to learn how fellow trade business owners, Andy and Angela Smith, would handle it.