Why every business should take reporting seriously
Having your accountant do your reporting might cost you a little extra, but there are a number of serious benefits to having an experienced professional look closely at important business figures.
Gone are the days when a business can be run out of a shoebox. Many of my clients often ask “why do I need MYOB?” And the most simple response is – for reporting purposes.
You can still drop a bag of receipts off to your accountant, full of invoice dockets and purchased items, and we can put a tax return together for you, but the main reason we prefer to use software like MYOB is for reporting purposes. Without reporting, how can we track your business? How do you know how your business is going? How do you know what everything is costing you? And, ‘in your head’ isn’t the correct answer!
If you want to see how your business is going and where it’s heading, you need to look closely at your figures and decipher what it is they’re telling you. Remember, each balance sheet and profit and loss tells a story about your business.
Most businesses don’t consider themselves big enough to require their accountant to do reporting for them, but it’s important to at least look over the items yourself to determine how your business is going.
Most reporting can be done along with your quarterly BAS. It might cost a little extra to get your BAS as well as report or some advice prepared on any items that need to be looked at. But why not invest a little extra cash into this? How will you know if you are having cashflow or tax issues if you aren’t looking at what the figures are telling you?
Businesses need to remember that profit is one thing, and cashflow another. Technically, if you make $100,000 in profit you should have a similar amount in the bank. Do you? Unlikely, because cashflow is a better indication of what you will have in the bank. You have items to pay for that aren’t part of the profit and loss and you also have non-cash items in your profit and loss that you haven’t physically paid cash for. All these items add up and quite simply can’t be accounted for in your head. This is where MYOB comes in – we use it to capture all this data and then analyse it.
Running a business is stressful, and it’s important to take advantage of anything you can. Look to your accountant and business advisor for help, as that’s what they’re there for.
Put simply, your accountant could potentially save you thousands of dollars in tax, repayments and expenses just by having the information in a format that can be easily analysed.