Category: Small Business

The Importance of Hiring a Great Accountant

Posted on by KWD

Many business owners, particularly those who manage small businesses, ignore to see the importance of hiring an accountant. They only realize their importance in the following situations:

  • Renewal of business permits and licenses
  • Filing of audited financial statements and income tax returns, and
  • Government agencies audit

Oftentimes, they hire an accountant when its already too late. Hiring a great accountant has many benefits. Small business owners usually find it costly to maintain a retainer to do the tax preparation and bookkeeping for their business. But what they don’t usually know is that there are many monetary as well as non-monetary advantages of maintaining one. This article reviews the importance of hiring a great accountant in business, no matter how small it is. Following are some of the key benefits of hiring an accountant:

Organized Record of Financial Data

Most business owners want to focus their energy and time operating and growing their business. As such, often times their personal and business financial documents are mixed up. Having unorganized financial documents creates headaches and stress to business owners as they don’t know if they are profiting or losing. This is where the help of an accountant proves to be invaluable. A great accountant can help you maintain an organized record of filing of your business’ day to day financial records. This is generally known as bookkeeping. When the business has an organized and systemized record keeping of transactions, it saves the business owners time worrying about whether they are profiting or losing. Furthermore, they don’t have to worry about how to organize all the receipts they need to file and record.

Financial Analysis

A business accountant analyzes the input and output of the business, including operation costs, revenue, and invested capital and then comes up with executable strategies to make sure that the business remains profitable. He/she also advises proprietors on the business’ feasibility as well as further trends.

Reporting

An accountant prepares financial reports for the business within the required time. They complete accurate financial reports. These reports play an important role in decision making about the business’ various operations. Apart from this, the reports also serve an interactive purpose for internal as well as external audits.

Supervisory and Managerial Role

The role of accountants in every business is extremely important as they utilize their knowledge, skills, and expertise to keep the organization staffed by working on mechanisms of suitable hiring and management of staff. On the monitoring and supervisory aspect, accountants come up with systems capable of monitoring inputs as well as financial reports handling in the business.

Businesses that hire the services of a great accountant generally enjoy the following benefits:

  • Well-kept and organized information.
  • Rapid growth due to enhanced financial credibility, management, and strategies.
  • A lot of free time to invest further.
  • No disputes with employees as payments and terms are duly served.

Save Time to Focus on Business Growth

It can be quite time consuming to keep track of your business financial data, recording, as well as filling it, particularly if you are not used to it. With the help of an accountant, you can save a lot of your time to focus on the growth of your business rather than worrying about keeping an organized accounting record and tax deadlines.

Save Money

The possibility of future penalties is high if you don’t have an accountant. There is also the risk of interest on government reports that are incorrectly filed. With the help of an experienced accountant, you can save cost on these future charges and penalties of correcting your tax returns and accounting books on time.

Peace of Mind

The last but not least benefit of hiring a great accountant is that you will have peace of mind.  When you have a skilled accountant who efficiently does the tax compliance and record keeping, you don’t need to worry about someone coming to your business to do Audit. With the help of an accountant, you can be confident that you have the records to show that you are complying with all of the accounting and government reportorial requirements.

Final Word

Accounting is a very important aspect of any business, no matter whether it is a small business or a large enterprise. As a business owner, your top priority is to keep your accounting in proper order. If you have trouble maintaining the accounts yourself, then it is highly recommended that you hire an account to handle the accounting aspects of your business. Not only will this give you peace of mind, but you will also have more time to perform other tasks to run your business efficiently.

The Benefits of Having a Great Business Mentor on Your Side

Posted on by KWD

There are a very few successful people that are truly “self-made”. Mostly every success story is linked to someone that helped the person along the way. Although this is not always the case, most of the time the person that helped was a mentor. Understanding the benefits of having a great business mentor is something you need to think about.

Basically, a business mentor is an individual who is there for you to guide you in the right direction. He/she gives you direction through their experience and listens to your ideas. Mentors have years of experience in the field and they have gone through the problems that most new business owners will go through. They share that experience with you so you don’t have to go through those problems. In this way, a mentor can help save you a lot of time, money, and frustration.

Following are some benefits of having a great business mentor:

Expert Advice

The best thing about having a great business mentor that has experience in your industry is that they can give you a more reliable, specific advice. Because of their years of experience, they know the issues that you are facing, and how to deal with those issues in a quick and efficient way. The important thing to remember is that you are getting a sound advice. The mentor’s job is not about telling you what to do. They can simply offer advice on the basis of what they know, and what they have been through in the past. Every situation is different, so it is up to you to decide how to deal with each situation based on what you know as well as the advice that your mentor gives you.

A Different Perspective

Another benefit of having a business mentor is that they can act as a sounding board for your ideas. Your mentor can offer a different perspective that might help you to adjust or clarify those ideas so that you can present them to others. Apart from this, your mentor can also act as a sounding board as you try to determine what the best reaction is to a certain situation that you are currently facing. You may be in a position to deal with a difficult employee, and your business mentor can hear how you want to handle the situation. Your mentor will be able to play “devil’s advocate” to make sure that you are fully prepared before you meet with that employee.

Connections

Since your business mentor has years of experience in your industry, they are likely to have many connections within the industry as well. As your business grows and develops, your mentor may be able to introduce you to people that you wouldn’t be able to meet otherwise. Those connections could lead to promotions and/or opportunities that may not be available to your competitors. As a business owner, your connections are extremely important to the life of your business. Those connections become the suppliers or customers that will help your business to be profitable.

Emotional Support

You may be alone as a business owner, but your entrepreneurial journey doesn’t have to be isolated. Your business mentor can fill the gaps by offering emotional support. This is one of the most critical roles of a great business mentor. As your grow in your business as well as in your personal life, it is helpful to have someone who can ask you the difficult questions regarding how you are doing as a person. They can question you on whether you are making time for your family, how you are treating others, and most importantly, how you are doing ethically.

Developing Confidence

Restoring enthusiasm and confidence on the part of the business owner is the endgame of business mentoring. By encouraging, teaching, and assisting, a mentor can turn a burnt-out business owner into a fireball of productivity. As a business owner, when you realize that your business is not a ball and chain which requires 60 hours of your time every week but a vehicle that can significantly improve your own life and develop real equity, you will become far more productive.

These are just a few of the key benefits of having a great business mentor. But you should keep in mind that nothing is guaranteed. You still need to work hard in order to make sure that your business is successful. However, with an experienced business mentor by your side, your probability of success will certainly increase tenfold.

Admin Ideas to Improve The Efficiency of Your Small Business

Posted on by KWD

As a small business owner, you don’t have any time to waste. There are a million things on your mind and a million things to do, and simply not enough hours in the day. But you can relieve some of that pressure, increase efficiency, and maybe save some time by implementing some key time management techniques.

Following are some admin ideas and tips that will help you save time and increase your small business management efficiency:

1. Always Have a Daily Plan

While living by a plan may not exactly seem glamorous as a small business owner, it is one of the best ways to be efficient and stay on top of everything. It is recommended that you start out your day listing down your goals and plan accordingly, and then prioritize those goals. You won’t find yourself wasting as much time when you have got things down on a list with a specific plan to follow.

2. Delegate

Admitting that they cannot do everything themselves is probably one of the most difficult things for small business owners. While it may be a bit scary to give up control and rely on others, it is a necessity. Learning what and how to delegate can be a great time-saver and helps your business to be relatively more efficient. And delegating does not only work for tasks, when it comes to putting together strategies and answering some of the important questions you face as a small business owner, you can ask other people to help you out.

3. Prioritize

There are lots of tasks that go into managing a small business, but not all of them require the same amount or level of attention. Every business is difficult and focuses on different areas. For instance, a brick and mortar store may decide to prioritize sales and advertising strategies while an online business should probably expect to prioritize social media use and article writing since the owner has to gain website traffic as well as build credibility. What’s important is that the priorities of a business be detailed out and clear to everyone involved.

The key to successful prioritization is being able to differentiate between tasks that are urgent and non-urgent as well as important and non-important tasks. The tasks that have a tangible impact on your business’ success are important tasks, while urgent tasks are those that have an impending, firm deadline, with consequences if that deadline is missed.

4. Automate

Technology is an amazing thing. Small business owners these days are extremely lucky that they live in an era in which modern technologies and innovations that can help them manage their businesses more easily are popping up on a regular basis. Automation of certain tasks can help drastically reduce the time and effort required. For example, by switching to online scheduling, you can reduce the time it takes you to schedule your staff by up to 80%. Not to mention, you also get rid of your pen-and-paper schedules and spreadsheets. Nowadays, there’s probably a software solution that can help you simplify just about any business process, from running your payroll to posting on social media.

5. Outsource

The idea behind outsourcing is pretty simple. Take a task that you don’t have time to do or don’t want to do and pay someone else to do it. Outsourcing is an excellent way to offload some of your administrative burden and often have the task carried out by a professional more quickly and proficiently as opposed to handling it in-house. While it’s not always quite as straightforward or simple as that, outsourcing is still one of the best ways to reduce your workload and free up valuable time which you can then spend elsewhere. To proceed, first identify what business tasks you want to outsource. Then, start to identify potential agencies, contractors, or service providers to take on the work you would like to outsource.

6. Ease Up on the Meetings

If you schedule a lot of meetings with your staff, then ask yourself how important they really are. The time spent preparing for the meeting, holding it, and then responding to various questions afterwards can add up fast. That’s why it is recommended that you only stick to important meetings.

 

While dealing with administrative burden can be quite challenging, regardless of whether or not it’s a small business, it is by no means an impossible challenge. A few small changes in how you think about and tackle your small business administrative tasks can make a huge difference to your efficiency and productivity, leaving you more energy and time to focus on growing and improving your business.

Good Debt and Bad Debt

Posted on by KWD

What’s the Difference Between Good Debt and Bad Debt?

Let’s talk about debt! While some of your debts might be considered an investment, others are not. It is important that we can recognise and discuss the differences between where your debt is best distributed and how it can affect your ability to secure finance for bigger projects such as starting your own business.

Purchasing a home, new business or car are all essential debts for making your life more comfortable and profitable, right? While they seem like reasonable expenses, there are a few crucial differences in the way lenders view these transactions.

For a lender to secure you a loan, they must carry out a detailed inspection of your existing debt, they will then weigh up what they consider ‘good and bad,’ and base their decision on these factors. Because of this, you must know what debts are favourable and which will hinder your access to further finance.

Bad Debt

When we look at your debts from an investment perspective, we must assess their value based on their financial return. For example, let’s look at buying a new car – it looks great and feels fantastic, but realistically it will only decrease in value over time. Because of this, new car loans are often considered risky and a ‘bad debt.’ Debts like these will affect your ability to secure new loans and finance because of how your money is tied up, here are some more examples of bad debt:

Credit Cards

Credit card debt has to be the biggest killer for your credit. Designed specifically to purchase smaller items, the debt that occurs is most highly avoidable and unnecessary.

While it may be tempting to put that holiday or new pair of shoes on your credit card, you must keep in mind these expenses will not provide you with any appropriate benefits. Serving a ‘quick fix’ towards the growth of your finances, credit cards tie your money up over a long term period, and offer you no financial profitability or gain.

High Interest Loans

While getting a personal loan can seem like a necessary step in acquiring what you need, it’s important to understand how their high-interest rates and long term payment plans can affect your ability to secure other funds.

For example, if you are thinking of starting your own business and accessing the finances to make it happen, your other loans will greatly affect your eligibility for securing funds. If these loans are tied up in items that don’t contribute to your affordability, you are limiting your new business venture and its buying power.

Good Debt

Our relationship with debt in New Zealand needs to be refined, which means understanding where your money is best spent and what loans will advantage your financial position. A great example is getting a student loan to complete your Master’s degree at university. Yes, this loan will cost you money in the short term, but it will also increase your earning potential in the long term. Similar to this example, creditors view these loans as ‘good debt’:

Morgages

Securing a mortgage to buy a new home is a great way to build equity and secure other credit avenues based on its inherent value. Mortgages taken out on your home or rental properties are considered very ‘good debt’ and can actually allow you to make more from your money.

One of the great benefits of attaining a mortgage is the low interest rates you will pay throughout the loan and your properties potential to increase in value over time. Securing this type of debt will enable you to access greater pools of resources, making further investments in business ventures or property straightforward and secure.

Buying a Business

Buying a business is another example of ‘good debt,’ with similarities to attaining a mortgage, this investment has growth potential, as it will generate income over time. With low-interest rates and asset finance available, getting your business up and running for success is an excellent way to secure low-risk debt.

Owning and operating a business can provide you with a steady cash flow that will pay off your loan and provide you with an asset-rich investment, all of these factors make a ‘good debt.’

If you are wanting to secure a loan to start or grow your business, talk to the team at Spinach today. We can provide you with comprehensive loans and business advice that will maximise your opportunities to grow your financial portfolio.