With the cost-of-living crisis upon us and a recession, perhaps, inevitable, many businesses are looking at where they can save costs. This is of course an important exercise but allow me to give you some advice: you should not be cutting back on using your accountant in a recession.
In time of financial hardship, your accountant is your greatest asset
However, before we get into that, let me say this. First things first: stay positive. Let’s not talk ourselves into a recession. We are not there yet. Instead, as small business owners – we have the power and the passion to make a difference – let’s work together, support each other, keep using each other’s services and trade out of this downturn.
Why you need an accountant now
When every penny counts, you need to be certain where every penny is, who owes you, who you owe, how you are performing now, what is on the horizon, how you are likely to perform tomorrow. This information will inform what you need to do with your finances to mitigate threats, maximise opportunities and of course, the holy grail at times like these, preserve cash.
A qualified financial professional will be able to help you in all these areas, for example they will be able to:
- Monitor your spend on expenses (we can show you how much you are spending and in what areas – you might be amazed when you see this and this is the first place to look for savings). “I spend HOW much on coffee each month?!!” < I have heard this more than once!
- Manage your available capital so you can leverage cash.
- Help you to truly understand where the profit is in your business so you can focus your effort in the right areas. (instead of relying on your gut feel).
- Provide advice about cash flow management.
- Credit control to get your cash in faster.
- Ensure you pay the right amount of tax (not too much or too little, you don’t want any nasty surprises further down the line).
- Business cost management – are you paying too much for the essentials in our business? Most accountants will be able to benchmark you against others in the same or similar industries.
- Create financial forecasts -this can include scenario planning, so you have different options open to you, based on whichever reality presents itself.
If you have all the correct financial procedures in place as above, this takes up management time. And if you’re not a specialist it will take you longer than it will take an accountant and, quite possibly, the result will not be as effective.
Maintaining the services of an accountant during times of economic hardship allows you to concentrate on what you do best: running the business and generating revenue.
Additionally, with professional management of your money, this is likely to mean there will be funds available to ensure that you can continue some marketing spend (keeping your name out there when maybe your competitors have gone quiet gives you the best opportunity to keep your business in good health) and thus, perhaps, even having funds available should an acquisition opportunity come along.
It pays to have an accountant during an economic downturn.
If you don’t have an accountant or if you aren’t getting this kind of services from your current provider, please do get in touch, I am here to help.
D&K Accounting, putting you and your profits first.
Telephone 01302 613515