When you start a business, it is one of the most simultaneously rewarding and stressful experiences. Keeping on top of finances, while running day-to-day operations and growing your business are all just some of the responsibilities that encompass running a small business.
Interested in expanding operations though? That endeavor requires ensuring that you are asking your bookkeepers the right questions on how your finances will drive long-term growth for your business. Here are a few questions to start the conversation off, and keep the momentum going.
1) How can I make my bookkeeping system more efficient?
Many small businesses find themselves hiring a bookkeeper without really engaging with them or asking their opinion. However, they see your business (and your revenue stream) from a different angle.
Ask them their views and feedback on current systems in place and what can be improved going forward. From opening a separate bank account to tweaking your account receivable process, they can advise you every step of the way.
The accounting process itself will likely need a great deal of iteration and change before establishing itself, so it is best to work with a professional throughout.
2) What is hampering growth?
Because they see your finances from a different perspective, your bookkeeper is also able to see your business in the long-term and what opportunities there are for growing your business.
They may be able to provide valuable insight on what is keeping your business from achieving sustainable, long-term growth and what measures should be taken to maximize growth prospects.
3) What are the best kinds of financial reports to understand my business?
Might sound a tad simplistic, but an important question to ask. Perhaps you already receive a few reports that you need to understand your profit and loss and that is it. But it is important to ask your bookkeeper if there are other reports you should be receiving to best ascertain the financial health of your business.
These reports help you know if you’re spending too much on the company credit card, what clients still owe you, and where all of your capital and liabilities are. There might be aspects of your finances that you are overlooking, so your accountant can help you design a financial report system that makes sense for your business.
4) How often should I be receiving these reports?
Once you have established what reports you need, and which ones make the most sense for your business, the next step is to establish the frequency with which you will need to see them.
For many small businesses that are just getting started, it will make more sense to start off on a bi-weekly or monthly schedule. Once your business becomes more stable and viable, you could switch the schedule to receive them monthly or quarterly instead.
5) What tax issues should I be aware of?
The thought of tax planning and, frankly, taxes themselves can strike dread in the hearts of many. However, much of that dread comes from not planning ahead and ignoring tax responsibilities like payroll taxes.
As your business grows and changes, so will its tax structure, and there might be loopholes available that you are not aware of that allow you to maximize tax deductions on your business tax return.
However, to ensure you are taking full advantage of tax benefits, it is critical to work with a professional beforehand to understand what is needed, what documents must be kept, and other important issues.
Many businesses tend to have an offensive tax strategy (i.e. working with a professional after problems have arisen) rather than a defensive strategy and that tends to be a mistake.
6) How can I improve my current financial operations?
You might have already discussed your accounting and bookkeeping process and how to make that more efficient - but what about the overall financial operations of your business?
Are things running smoothly, or are there gaps in the process that then hamper your bookkeeping? A business is the sum of many parts, and underperforming parts can slow overall growth which can be frustrating.
Ask your bookkeeper their thoughts about your financial operations, whether you are on the right track, and where they see room for improvement. They can advise on best practices, necessary accounting software, and industry standards from a different perspective, which can be extremely helpful.
Interested in learning more about our bookkeeping services and other small business accounting tips? Please contact us today.