Michelle Duford

4 questions you should ask your accountant

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Ideally, you and your accountant are more than just “adviser” and “client”. With your combined skills, expertise, and shared mission to support a thriving business, you’re more like strategic partners. The key to achieving success in any partnership is, of course, strong communication. At your next meeting, be sure to ask your accountant these four important questions.

1. What's my best strategy for increasing revenue?

Every business owner strives to improve profit margins – but the best way to quickly and/or sustainably grow revenue will vary from business to business.
When reviewing your financials, ask your accountant to pinpoint and suggest smart strategies for driving greater revenue. For your unique company that might mean focusing on new leads, encouraging customers to buy more frequently, incorporating cross-selling or up-selling, and/or re-thinking your pricing strategy.

2. How would you assess our financial performance this quarter/year?

It’s part of your accountant’s job to stay current with your company’s financial statements and reports (i.e. your balance sheet, income statement, profit and loss statement, and cash flow reports).
Some small business owners – especially those who lack confidence in their financial literacy skills – may only want to know the basics, in simplest terms. Let your accountant know you’d like a more thorough analysis of your finances when you next meet, and help understanding what the numbers mean.
Ask for key ratios, like your gross profit percentage, and an assessment of the big picture, drawing comparisons with past performance as well as trends in your industry.
Also ask for any insights your accountant might have into the reasons for new or surprising developments, and what you can do to correct areas where your business is falling short – as well as what actions you can take to continue any positive trends.

3. How can you help me grow my business?

Your accountant should be prepared to offer professional advice to help your business expand and grow over time. Scaling a business can be tricky as it requires a company to do everything it must to keep their customers happy while adapting to change – such as new staff and new systems to accommodate a greater volume of customers. Financial systems may need to change as your business expands; likewise, your company’s financial management may need additional support as you transition to a larger company.
Ask your accountant how you can best work together to facilitate smooth, sustainable growth with minimal disruption to operations, and for tips on how to successfully scale based on past experience with other small business clients.

4. What are your most successful clients doing?

Chances are your accountant serves as a trusted advisor to a number of clients – and therefore, will be privy to the inner workings of companies who are struggling and others who are thriving.
Neglecting to ask your accountant about their clients’ success stories is a missed learning opportunity. Even if a business has little in common with yours – operating in a different industry, or as a seller or products versus services – there’s value in learning what yielded impressive results for another company.
Alternately, you might ask your accountant how their clients overcame challenges similar to yours to help you brainstorm possible solutions.

Final Thoughts

Your accountant is an incredibly valuable resource for your business – and not just at tax time. Be sure to check in every quarter so you have the up to date financial info you need, and your accountant’s professional advice when it comes to making key business decisions.

Embracing Technology

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Embracing Technology

You might be wondering why an accountant would be writing about faxes (instead of taxes).  I was recently watching an episode a well known news program. 
In this program one of the people being  interviewed was discussing the Covid-19 Pandemic and some of the early issues. 
This article isn’t about the Pandemic, but it is about technology and how there is simple and inexpensive tools available.

The interviewee mentioned how they were trying to get Covid information to another party interested in compiling information early in the Pandemic sometime in January 2020.  The receiving party was a cash strapped entity and the only way they were able to receive information was via fax.  

First wow. 

The interviewee then mentioned how they didn’t have a fax machine because they hadn’t sent a fax in years. So they went a bought a fax machine.

Second wow. 

He then goes on to describe how the receiving party’s fax was so old it couldn’t receive all the faxes. 
So the sending company bought a new fax and shipped it out to receiving company. 

Third wow.

I suppose I should be focused on the pandemic and the types of things that were going on – but all I could think was – they are sending important information via fax?  And they went out and purchased two more fax machines so they could continue to do that?

My mind was racing – there are much better ways to securely get information to someone else without sending a fax. 

Certainly, the sender could have used a secure online fax service.

Or even better use almost any kind of cloud storage lets you send a secure link.  Some like Sync.com are so secure that only you and who you authorize can see your data.  Sync.com costs around $100 per year – much less than the two faxes machines that were purchased.

As I listened, I was saddened to hear that these two entities which combined have hundreds of employees weren’t aware of these two options, both much less expensive, more secure and much more convenient to use. 

My point of this story isn’t to embarrass anyone, it’s just to bring awareness that there are tools that aren’t just more convenient, but often times are more secure, reliable and less costly.

What about you?  What is stopping you from embracing technology in your business?

Small Business Accounting Challenges

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Small business problems

Small businesses have specific challenges and needs that are very different from larger more established companies.  Budget is typically a concern as small businesses and startups work to get their revenue streams established.  There is an additional challenge addressing the technical aspects of dealing with CRA – something many small business are just not able to do.

Here are some common issues:

  • Lack of understand of what is a deductible expense
  • Not understanding how GST works
  • Creating invoices that are not compliant with CRA
  • Recording revenue and expenses using Cash accounting methods.
  • Using old and outdated techniques in their business because of lack of awareness of better tools
  • Using the wrong business structure for their company (ie: incorporating too soon or too late)
  • Tracking vehicle expenses
  • Maintaining proper documentation for expenses
  • Missing or not understanding filing deadlines.
  • Not tracking personal injections or withdrawals of cash in their business
  • Using a personal account to run their business
  • Not registering for GST when required