Some owners of small businesses may not get all the possible benefits from the accountant that they have hired due to the business owner's inexperience in working with accountants. Below are some questions that you should ask your accountant so that you can benefit more from your relationship with this expert.
How Can I Keep My Cash Flow Healthy?
Some businesses can collapse prematurely due to having an unhealthy cash flow position. For example, a business may collapse due to taking too long to collect payments for products that have been delivered to clients. A good accountant can study your business and help you to develop a cash flow model so that your business can thrive. For example. they can advise you to reduce the raw materials that you maintain in stock so that you can have more cash to attend to the business' daily expenses as you wait for the payments from your clients.
At What Point Do I Break Even?
Your accountant can also help you to know how many products or hours of service you should provide within a given time frame to break even. This break-even point is arrived at after considering several factors, such as your operating expenses (salaries and raw materials). You can then set performance targets that will ensure that you remain profitable. The accountant can also advise you on how to price your products or services so that you get a profit from each transaction.
What Special Considerations Affect My Industry?
Your accountant should have a detailed understanding of the industry in which you operate, such as technology. This knowledge will help them to make you aware of any special considerations that are given to people in that industry. For example, you may qualify for some tax exemptions that were instituted to spur growth in that industry. Asking this question helps you to enjoy such benefits.
What Is My Business Worth?
You should also ask your accountant to establish the fair market value of your small business. He or she can go further to identify the factors that make other small businesses in your industry more valuable than yours. This information can help you to adjust your business plan so that you get onto the path of improving the value of your business.
As you can see, your accountant should do much more than maintaining your financial records or preparing your tax returns. Utilizing them fully ensures that your business remains financially sustainable for a long time.