Every investment must have a financial return. That is what indicates whether a business is profitable. With what you invest in your accounting, the same thing happens; you must receive a financial tax return accountant. Today I will talk to you about that.
Entrepreneurs often candidly delegate finances to third parties. It is the right thing to do, but they also neglect the control that is not delegable, at least the control of the desired results. How do you know if what you spend on your accounting is productive? I will talk about that in this article.
Entrepreneurs are generally neither accountants nor financiers. And that is very good. Perhaps they would not be such good entrepreneurs if they were experts in accounting or finance. And a financier with more than 30 years of experience is saying it. But they must know how to supervise the finances of their company.
The first thing that the entrepreneur must be clear about is that he must not be dazzled by the growth of sales or the other mirages of growth, such as the purchase of property, new facilities, purchase of machinery, and so on.
Today they employ more than two hundred people, sell more than a million dollars a month, have several warehouses with their own facilities and are now moving to the second generation.
But… they don’t know what happens to the company, the company sells more but there is less money, inventories are growing, they rotate less, more than 25% of accounts receivable are more than 60 days in arrears. They fear they will have trouble paying providers again. They only know how much they sell and how much is in the checking accounts.
My argument was the following, and my wish is that you are not in the same painful situation:
- “In the Financial-Accounting Area, you currently spend more than sixty thousand dollars a year, including social security, accounting, billing and collection employees, external auditor and others.
- They do not know how much additional money they could be risking due to errors in accounting records and tax returns. If there are errors, you will pay, not your accountants.
- But there is something worse that may be happening to them: they do not know if the company is financially healthy, they do not know how much each business is earning, they do not know what is being done with the money. They don’t know it every month, they don’t know it every week.
- As I mentioned, companies grow and become increasingly complex. What used to be controlled with a “notebook” now requires taking a leap to the next level.
- They don’t know how much money you came in last month and what it was spent on. And the worst part is that their own accountants don’t know how to answer that question either. “
- But, that happens to many entrepreneurs of quite large companies, it is a general bad.
- Many entrepreneurs see a lot of money go through their accounts, but “feel” that there is less money left than before.
- It is actually very simple to know if what you are investing in your accounting is worth it. And this works if you spend only five hundred dollars a month, ten thousand dollars a month, or as I usually find in clients who request the financial diagnosis, more than thirty six thousand dollars a year. If you need any help in any case you must be hire tax accountant melbourne experts.
You’re wasting your money if you don’t get:
- Every month, in the first ten days, the managerial Financial Statements, of high quality, with reliable and useful information.
- Every month a summary of the status of all your formal duties: tax returns, tax projections, tax exposure, contingencies, etc.
- Every week accounting reports that tell you how the money is being handled in the cash flow, how are accounts receivable, accounts payable, inventories.
- Accounting departments spend many hours organizing and filing accounting documentation, preparing tax returns, and other daily tasks. It is usually a lot of work. And that is very good.
- But … if the businessman does not receive quality financial information that helps him to know if his company is healthy and if it is profitable, then he is wasting the money that he spends on his accounting.
- How is your company regarding this? Do you have the accounting up to date? Do you receive financial statements every month? Do you really trust the information your accountants provide?
- And one more thing: How do you know today if your Financial Accounting Department is really efficient? Maybe you need a Diagnosis. Do not you think?
Now go and tell us your experiences. Many entrepreneurs complain about this, but there are solutions to improve it.