Archives for August 2014

9 Reasons Your Accountant May Be About to Fire You

August 21, 2014 by Georgette Rowland Osborne

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You're Fired

I am going to show you how, without possibly even realising it, you could actually be the reason you don’t have a better relationship with your accountant.

I am going to give you a little reality check, so you can decide whether it is your accountant you need to change or your attitude.

To download the audio file to your computer, please right click on this link and choose save link as, or save target as, depending on your browser.

If you would rather read while you listen or you prefer to just read without the audio or video, we have provided the full transcript further down the page for you.

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Transcript

If you watched my video “Is it Time to Fire Your Accountant?” I gave you some red flags to be aware of so you can move on with a clear conscience.

If you haven’t seen that one, make sure you do.

In this one I am going to show you how, without possibly even realising it, you could actually be the reason you don’t have a better relationship with your accountant.

Coming up, I am going to give you 9 tips you can use to decide whether it is time to change accountant.

Today I am going to give you a little reality check, so you can decide whether it is your accountant you need to change or your attitude.

How many times have we been dissatisfied with a supplier or service? Replaced them with another supplier and then in no time found we are dealing with the very same issues that caused you to change suppliers the last time.

Maybe the problems did not begin and end with the supplier. Because most people are professional, they are loathe to call us out on our crap, so we can continue on oblivious to the consequences of our actions.

Changing providers even for the better is a hassle, so if you have an opportunity to resolve, why not take it.

Some things to watch out for are:

1. Your accountant has to remind you over and over to provide your paperwork. And when you do, it is at the last minute and then there is a mad panic to meet tax or compliance deadlines.

2. You don’t do or have any proper bookkeeping or record keeping system so the accountant has to start from scratch or unravel a tangled unfinished mess.

3. You contact your accountant at all hours of the day and night and expect an immediate response.

4. You try and get services or advice over and above the initial agreement for free. If you catch yourself starting conversations or emails with the words “Just a quickie…” “Or I hope you don’t mind…”, check how often you do it. Are you taking the ……

5. You rarely pay your fees on time, even though you mean to. Maybe you need an instalment plan.

6. You have successfully negotiated a lower fee but still want to receive higher fee service.

7. Deep down you resent or don’t value accounting fees anyway so no matter who your accountant is, they have their work cut out trying to impress you.

8. You don’t follow advice, but still complain or stress that things are not working out.

9. You keep changing accountants and it is always “their fault”.

You can hold your head up now; lightning is not going to strike you where you sit.

I just wanted to highlight that there are 2 sides to every coin and it does us no harm to check our own perception, expectations and behaviour from time to time.

You are just caught up in your world, just like the rest of us.

Plus being an entrepreneur is no walk in the park, it is hard work.

If you recognised yourself in any of those, don’t despair, you are not a bad person.

Just promise me the next time you catch yourself cursing out your accountant; even if it is just in your head.

Maybe stop, count to ten and think about how you may be contributing to the situation.

And in the words of Dizzy Rascal “Fix Up, Look Sharp”

Is it Time to Fire Your Accountant?

August 21, 2014 by Georgette Rowland Osborne

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Fire Your Accountant

How do you know you are getting a good service from your accountant? If you are not happy with your current accountant:

Are you right about them? Are you misinformed? Or are you just plain picky.

Well I am going to give you 9 tips you can use to decide whether it is time to change accountant.

To download the audio file to your computer, please right click on this link and choose save link as, or save target as, depending on your browser.

If you would rather read while you listen or you prefer to just read without the audio or video, we have provided the full transcript further down the page for you.

Be a part of the Financial Gym Inner Circle for Free and be amongst the first to get:

Updates on ways to improve your day to day business money and productivity issues
Real life stories
Free video tips and tutorials
Downloads and templates to keep and use in your business

Click here to subscribe to my mailing list

Resources and Items Mentioned

Check out Resources – Georgette Recommends page

Transcript

How do you know you are getting a good service from your accountant? If you are not happy with your current accountant:

Are you right about them? Are you misinformed? Or are you just plain picky.

Coming up, I am going to give you 9 tips you can use to decide whether it is time to change accountant.

There are some amazing accountants and accountancy firms out there, but they are not all created equal. Forget whether they are experts in tax, or compliance or any other service for that matter.

What you need also need to be looking at is how they interact with you. Business person to business person.

Be aware that even if your accountant messes up, the buck still stops with you. So if your accountant files your returns late or there is later found to be an inaccuracy. It is you who are legally responsible. And any financial penalties or fines have to be paid by you, not them.

“It’s not my fault”

Just won’t wash with the authorities.

So you can’t afford to be complacent about the service you are getting.

But it is not just the practical things that should be red flags, there are more subtle things which you are probably aware of on some level; but do not feel are serious enough to make a fuss about.

See if any of these apply to you:

1. Your accounts, tax returns, benefit declarations etc are filed late despite the fact your accountant had everything they asked for ages ago.

(Though if you are the give information at the last minute in a shoebox person, then my friend, you only have yourself to blame).

2. You deal with different people each time, who have to familiarise themselves with your business before you can move on, so causing a delay in getting your questions answered.

3. If you deal with one particular accountant, they ask you the same questions again and again, showing they clearly are not interested in your business besides doing the paperwork.

4. You are charged on an hourly basis.

In a world where value for money is more important than ever, hourly rates promote inefficiency. Why should slower service cost you more?

5. You are quoted a fee for the year but you get additional bills that you were not expecting. So you avoid asking for help; in case it ends up costing you more money.

6. Your accountant doesn’t explain what your numbers mean in a language you understand.

And closely related

7. Your accountant makes you feel stupid.

8. If you do find yourself in hot water with the tax office your accountant doesn’t have your back and leaves you to it.

9. They are unaware or are unwilling to explore of new trends in business that could improve quality & efficiency e.g. cloud technology, virtual services. – This one is very common in the finance industry.

This is by no means an exhaustive list. You can probably come up with others that I haven’t mentioned here. I am just using the most common complaints that I get from the hundreds of businesses that I have dealt with over the years.

So if after that you think “You know what, I am getting a raw deal here”, do something about it. Even if it is just tactfully bringing any concerns you have to your accountant’s attention.

It could be that it is you who is actually not being a good client.

WHAT?!!

Go watch my video 9 Reasons Your Accountant May be About to Fire You……..If you dare

2 Vital Financial Tasks Business Owners Love to Ignore

August 18, 2014 by Georgette Rowland Osborne

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To download the audio file to your computer, please right click on this link and choose save link as, or save target as, depending on your browser.

If you would rather read while you listen or you prefer to just read without the audio; we have provided the full transcript further down the page for you.

Business owners are Jacks and Jill’s of all trades, especially in the start-up phase. Budget? Forget it, start-ups don’t have cash to spare. That being said, there are two main financial scenarios most business owners tend to ignore.

Insurance

It won’t happen to you…until it does. If I asked you what is the largest business asset you will ever own, what would you answer be?

Your office building?

Your employees?

Your retirement account?

All of those answers would be incorrect.

The biggest asset your business will ever own is the ability to earn income. Much of that income potential rests firmly on the shoulders of the CEO or company founders. Protecting that fact is easily ignored. Three main ways a business’s biggest asset can be threatened?

Disability or death of a key employee.
Lawsuit or legal liability.
Natural disaster.

An entire blog post could be written on each bullet above, but the main idea is pick up your phone and call an expert to explore what types of insurance policies your business should have in place.

Bookkeeping

As a savvy entrepreneur, you have better things to do than bookkeeping…or do you? Knowing when to spend, and how to save, is vital to company success. Sometimes new business owners simply do not know – what they do not know. Business tax laws are complex and highly specialized. It is such an easy thing for a business owner to ignore. A trusted tax advisor is the key to company tax strategy. Compiling business income and expenses into measurable categories allows accounting professionals to give recommendations for growth. The entrepreneur is responsible for translating those recommendations. The best news is bookkeeping delivery is changing and the following delivery modes may fit your business best:

Traditional face-to-face help: Let’s admit it; sitting down with a “numbers person” can be comforting. However, entrepreneurs are willing to pay for that comfort. Start-ups however must minimize first year expenses or risk failing. Professional face-to-face consultations can be costly and threatening to precious cash. Living the life of a lean start-up means innovation, not tradition. Many accounting professionals now offer online services to stay competitive. Technological strides enable entrepreneurs to push the boundaries of tradition and save.

Freelance bookkeepers: Freelance bookkeeping experts can be virtual or local, but both options are less costly than traditional bricks-n-mortar accounting firms.

The rise of freelance bookkeeping talent is cost-effective and efficient. Freelance accounting help is 80%* cheaper than traditional face-to-face help. Cost set aside, freelancers are also far more productive and can be located globally. A freelancer can be working while the business owner sleeps. National freelance websites allow entrepreneurs to capitalise on expertise not found locally.

Software programs: QuickBooks and Sage (in the UK) have traditionally been the the most well-known option for business owners. Other options include Xero, FreeAgent and FreshBooks.

Kashoo, Mint.com and PayPal also offer extensive transaction reporting free of charge.

DIY accounting software is difficult to use. Entrepreneurs need every bit of cash, but making sure bookkeeping software is properly utilized is vital.

As an entrepreneur, you owe it to your success and the success of your company to stay proactive. Admitting you procrastinate in certain financial areas is the key step to fixing the problem. Don’t go it alone, seek the help of a qualified professionals to make sure you have covered all your bases.

Be a part of the Financial Gym Inner Circle for Free and be amongst the first to get:

Updates on ways to improve your day to day business money and productivity issues
Real life stories
Free video tips and tutorials
Downloads and templates to keep and use in your business

Click here to subscribe to my mailing list

Resources and Items Mentioned

Xero
FreeAgent
QuickBooks
Sage
FreshBooks
Mint.com
PayPal

Why Listening to Your Accountant Could Send You Broke

August 12, 2014 by Georgette Rowland Osborne

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Why Listening to your accountant

I’m going to share with you a very common piece of advice ironically given by the more proactive accountants that may seem great from a tax point of view, but can totally mess up your cashflow.

To download the audio file to your computer, please right click on this link and choose save link as, or save target as, depending on your browser.

If you would rather read while you listen or you prefer to just read without the audio or video, we have provided the full transcript further down the page for you.

Be a part of the Financial Gym Inner Circle for Free and be one of the first to get:

Updates on ways to improve your day to day business money and productivity issues
Real life stories
Free video tips and tutorials
Downloads and templates to keep and use in your business

Click here to subscribe to my mailing list

Resources and Items Mentioned

Check out Resources – Georgette Recommends page.

Transcript

Today I am going to share with you how a very common piece of advice often given by accountants (ironically the proactive ones) which makes complete sense from a tax point of view can totally mess up your cash flow in the short term.

Oh boy am I going piss off a few accountants today?!

Yes your advisors are the professionals, but it is you work in your busy on a daily basis, so you will always know things about what is going on that they don’t.

Your accountant may be giving you advice that is based on your past performance, but have no idea what is happening going forward and create a financial problem you can avoid.

So what is this piece of advice you should be wary of? Allow me to demonstrate.

Accountant – “I have looked at your figures so far and you are making a lot more profit than expected”

Client – “That’s good isn’t it?

Accountant – “Yes that’s great. The only thing is that means you have quite a bit of tax to pay”

Client – “Oh no, I want to keep the tax bill down, what can I do?”

Accountant – “Well luckily you have not reached the end of your financial year yet so you have time. I would suggest you spend some money before then to reduce your profit.”

Now you may be asking why on earth that would be a problem.

And you would be right.

After all to get this advice in the first place would indicate 2 very positive things:

1. You have a proactive accountant who doesn’t wait until your financial year has passed to tell you what you should have or could have done.

2. The less tax you have to pay the better.

Well yes, but I have seen people spend ten grand on a piece of equipment to avoid paying two grand in tax. This is a very simplistic example just to make a point so don’t get hung up on the actual amounts.

Now while this may actually reduce your tax bill, depending on what method you use to buy the item, it may also reduce your available cash.

Don’t even get me started on the implications of going down the credit route.

Now if your business is:

flush with cash and the expenditure doesn’t affect your day to day money requirements
or the item you are buying is something you really do need and would have bought anyway
or it is something that will help you make more money

Then what the hell, spend away.

But if spending the money will affect your ability to cover your day to day running costs then it is a different story altogether.

The basis of the advice is based on what your advisor gets from your profit and loss report.

A profit and loss report may show you how much profit you make but it does not show you your cash position.

It does not tell you how much of the money you made has actually been received by you
It does not show you how much of it you are unlikely to receive due to bad debt clients
And whether you have enough money on an ongoing basis that can comfortably cover your normal expenses let alone any additional purchases.

Some of this your accountant can determine from your balance sheet but that is still only a snapshot in time.

Historical time at that.

So to use my oversimplified example:

You spend ten grand on a vehicle or piece of equipment and yeah you slash your tax by two grand. But you are still eight grand down in your cash at bank for an item you may not actually need or want.

Now I know as a matter of principle you may well resent giving the two grand to the revenue, but personally I would rather do that and keep my other eight grand in the bank.

So FESS UP or MESS Up lesson for today.

“Don’t prioritise avoiding tax over saving money”