Why Regularly Consulting With Your Accountant Is Vital
We all don’t know what we don’t know.
Fortunately, there is a way of overcoming that. The solution lies in the fact that there are a whole lot of great people out there who intimately know what we don’t know.
These people are either specialists (surgeon or tax specialist) or general advisers (GP or account/business advisor) that have the expertise in their particular area.
Over the past 25 years, I have seen countless examples of bad business decisions being made simply because of lack of knowledge and expert advice.
I am talking about things like tax being needlessly paid or professional fees being incurred to rectify an issue that could have been properly addressed just by talking to an accountant PRIOR to entering in to the transaction.
Taking the time to talk to your Accountant or Business Advisor before setting up a shelf company on the Internet, signing the contract on that new car, or buying a business could save you thousands.
This is not theory, this is “in the trenches” every day stuff that we help our clients with time and time again.
If your accountant is any good, you’ll see her or him at least twice a year for a “coffee catch-up” at no cost to you. You’ll be surprised at what you’ll come away with from these meetings.
Let’s look at some specific examples…
As an example, for most people starting out in business, a business structure is a business structure and choosing the right one is not nearly as important as getting on with selling the widgets… or so they think.
A few years down the track though, when the business is in trouble OR the business is booming, the right business structure becomes very important to the business owner. At this point, it directly affects the well being of the business and ultimately, the well being of the business owner.
In this scenario, the one in trouble is looking to minimise risk and protect personal assets and the one that is prospering, is looking to gain flexibility with pre tax profits and capital structure to introduce new funds and expand.
My pet hate is companies forcing “employees” to set up a company so that they can become “contractors”. This is good for the company, but absolutely disastrous for the contractor. Sadly, I usually only find out after the event.
Another example is the humble car. Talking to your accountant can mean the difference between getting an up front GST refund on the new car on change over, OR having to pay the GST on the trade-in up front and only claiming the GST on the monthly finance payment on the new car.
This can make a huge difference to cash flow.
The really big one though, is buying or selling a business. Or, setting up a business with the intention of selling. Speak to your accountant before signing anything!
Speaking to your accountant will remove the emotion out of this transaction. Your accountant is in the box seat to help you see what the actual value of the business is, not what you believe or have been told. They’ve seen it all before.
The good news is: you are not alone
There are plenty who have gone before you and have a wealth of information to share and help guide you through the maze. Business setup, structuring costs and professional fees are now deductible in the first year. From July 2016, restructuring costs relief as a tax deduction will also be available.
There is good information readily available and it can save you thousands.