7 things you could be missing without an accountant by your side

10 Sep 7 things you could be missing without an accountant by your side

For many people, an accountant is someone they speak to once a year, hand over a collection of documents to, and hopefully receive a tax refund from shortly afterwards.

But good accounting advice can offer much more than completing an annual tax return.

Whether you run a small business, work as an employee, earn investment income or have several financial commitments competing for your attention, having an accountant by your side can help you understand your financial position, make informed decisions and avoid opportunities slipping through the cracks.

Here are seven things you could be missing without professional accounting advice.

Tax Deductions You Didn’t Know You Could Claim

Tax rules can be complicated, and what you can legitimately claim will depend on your circumstances.

For an employee, this might include eligible work-related expenses, working-from-home costs, professional memberships, education or travel expenses.

For a small business owner, deductions could extend to equipment, motor vehicle expenses, insurance, professional fees, technology, marketing and other legitimate costs of running the business.

An accountant can help identify deductions while making sure claims remain appropriate and properly documented.

Better Tax Planning Before the Year Ends

There is a significant difference between tax preparation and tax planning.

Tax preparation happens after the financial year has finished. Tax planning happens beforehand, while there may still be time to make decisions.

For small businesses, this could involve reviewing expenses, asset purchases, superannuation contributions, cash flow and expected profitability.

Employees and investors may also benefit from reviewing deductible expenses, investment income and other tax considerations before 30 June.

Waiting until tax return time can sometimes mean the opportunity to act has already passed.

Understanding Where Your Money Is Going

Cash flow isn’t only a business issue.

Employees can earn good incomes and still wonder why there is little left at the end of each month. Likewise, a business can appear profitable on paper while continually struggling to meet bills.

An accountant can help interpret the numbers and identify patterns that might otherwise go unnoticed.

Sometimes relatively small changes can make a meaningful difference.

Knowing Whether Your Business Is Actually Profitable

Revenue and profit are two very different things.

A growing business might have plenty of money coming through the door but also have increasing wages, rent, stock, finance costs and operating expenses.

Regular financial reporting can help business owners understand margins, expenses and profitability rather than relying simply on the balance in the bank account.

That information can be invaluable when deciding whether to hire, expand, invest or change direction.

Choosing the Right Business Structure

Sole trader, partnership, company or trust?

The structure used to operate a business can affect taxation, administration, asset protection and future flexibility.

The cheapest or simplest structure when starting out isn’t necessarily the best structure as the business grows.

Having an accountant involved early can help you consider your circumstances and work alongside your legal adviser where appropriate.

Avoiding Expensive Mistakes

Missed tax obligations, incorrect records, forgotten registrations, poor bookkeeping or inadequate provision for future tax bills can become expensive problems.

Small business owners may also have obligations involving GST, PAYG withholding, superannuation and employee reporting.

Employees aren’t immune from mistakes either. Investment income, additional employment, side businesses and other sources of income can all affect someone’s tax position.

Professional advice can help identify issues before they become larger ones.

Having Someone to Call Before Making a Big Decision

Perhaps the greatest benefit of an ongoing relationship with an accountant is having someone who understands your financial circumstances.

Thinking about buying a business vehicle? Employing your first staff member? Starting a side business? Purchasing an investment? Increasing your salary? Selling an asset? Planning retirement?

These decisions can have financial and taxation consequences.

The best time to seek accounting advice is often before you make the decision rather than afterwards.

Advice Is About More Than Tax Returns

A good accountant shouldn’t simply tell you what happened financially last year. They can help you better understand where you are today and prepare for where you want to go next.

For small businesses, that can mean greater visibility over profitability, taxation and cash flow. For employees, it can mean understanding your tax position and making sure legitimate opportunities aren’t being overlooked.

The question isn’t simply, “Do I need someone to lodge my tax return?”

A better question might be:

“What opportunities could I be missing by not having an accountant by my side?”

If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.

This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.

(Feedsy Exclusive)