As a small business owner, it has never been more important to have a professional accountant to advise you on matters of compliance, growth, and financial stability.
But no matter how much experience you have of working with an accountant, there will always be something you don’t know unless you ask. You shouldn’t wait for your accountant to give you answers unprompted, so in this blog post, we’re going to share the top 10 things you need to ask as soon as possible.
1. What information do I need to provide?
Knowing which documents and information you need to share with your accountant is vital to getting your relationship off on the right foot. Once you have the answer to this question, you can feel confident that you’re in good hands going forward.
It’s a good idea to ask this as early as possible too, as it will save you from scrambling around at a later date looking for important documents when tax season rolls around.
2. How can you help me prepare for tax season?
Speaking of which, tax season is the main reason people hire accountants. Of course, everyone wants to leave it to the accountant to handle everything, but in order to get the most out of working with a tax professional, it’s important that you appreciate that it’s not a one-sided battle.
You will be responsible for providing your accountant with certain documents and information, and by asking how exactly they will help you prepare, you can be sure that you’re retaining the correct invoices, receipts, and statements throughout the year.
3. How can you help me grow my business?
Although ultimately it’s up to you to put in the work to grow your business, a good accountant should be able to pinpoint available opportunities.
But first, you need to find the right accountant. To help you find one who understands your business and your industry, ask for specifics on how they can help support the growth of your company from the outset. Clearly, you’ll want to make sure they excel in tax and finance, but you’ll also want reassurance that they can help you optimise and organise the way your business runs.
4. Am I making any mistakes?
A key feature of any working relationship is honesty. It’s important to know where you might be going wrong, and for your accountant to feel comfortable and confident enough to tell you. Small mistakes left unchecked could produce devastating results, so instead of waiting for someone to suggest a fix, ask your accountant for advice.
They’re there to help you within the scope of their expertise, and they will be only too happy to point out areas for improvement.
5. Are there any special considerations for my particular line of work?
Some industries do not experience the same accounting issues as others. To guard against this, it’s vital that you ask your accountant for their specific view, based on their experience of working with different types of businesses.
Their insight can help you to make the best decisions for your business and create a more personalised working relationship with your accountant. If you’re a small business, make sure you know your accountant has experience in dealing with businesses of that size, so that they can plan accordingly, and help you achieve realistic goals.
6. What business expenses can I deduct?
On your tax return, it’s possible to deduct business expenses, but not every business is created equal. You can deduct things like cars, office equipment, internet and phone bills, travel expenses, etc., so long as it’s a legitimate business expense.
Asking your accountant to clarify which expenses you can deduct makes your day-to-day life far easier. They can help you minimise your tax liabilities, and avoid potential penalties for claiming the wrong expenses.
It’s also a good idea to ask this question in order to ensure you’re working with the right accountant. If you’re working as a model, and your accountant mainly deals with pubs and restaurants, they may not be well-versed with the deductions associated with your industry, which could result in missed opportunities to save money.
7. Which laws and changes that apply to my business should I be aware of?
Every tax year, there are hundreds of changes. Knowing which ones apply specifically to you and your business can sometimes be vague, so your best bet is to ask your accountant to keep you up-to-date with the new and relevant rules and regulations.
This can help you monitor the political and legal landscape of your industry, and plan for cash flow challenges brought about by the need to invest in new software, equipment, or external consultants. You can also keep your colleagues and clients informed of any important changes that may affect them.
8. Are there any special ways I can save on taxes this year?
Just as every year brings new changes to tax laws, there will often be new ways you could save some money too. Talk to your accountant about the investments you’ve made, or any projects you have started. They will be able to advise you on whether anything you’ve done this tax year could potentially minimise your liabilities.
9. What options are there if I can’t afford my tax bill?
If you find yourself unable to pay your tax bill at the end of the year, it can be incredibly stressful. That’s why it’s a good idea to be proactive and ask the question of your accountant as early as possible. They can help you assess the various options available to you, as well as budget and plan for what you can and cannot afford.
10. How do you store the documents I send you?
In this modern era of privacy concerns and online security, it’s always a good idea to understand how your important documents are being stored when sent to your accountant.
If you’re a small business, chances are all of your documents will be kept within the accountant’s office, usually in paper or virtual folders. Often, they are scanned and kept on your accountant’s server (encrypted so that no-one without the appropriate access can get to them), while hard copies are either filed away or returned.
Remember, financial documents need to be kept for several years by law, and some of your older documents may need to be sent to storage, as there will never be enough room to keep everything under one roof! Different accountants store documents in different ways, so it’s always a good idea to ask before you hand everything over.
Do you have questions 11, 12, 13 or more? Ask us – we’ll have the answers. Contact us today to speak to one of the team.