All businesses are advised to have an accountant. In order to ensure you high someone with knowledge and experience, you must be prepared with a few key questions. Below are three essential questions you should always ask when working with a business accountant.
Would my business be able to survive an economic downturn?
We all know about the hugely devastating impact the recession had on a lot of businesses. Ask your accountant for an insight into the current financial position of your company. Would you be able to survive an economic downturn if one was to occur? If you have too much debt then your company may be in a risky position. However, too little debt means you may not be taking advantage of certain opportunities. It is a good idea for your accountant to present you with your debt to equity ratio. This will give you a good insight into how much of your business is being financed through debt in comparison to your own equity.
What Tax Opportunities Can My Business Take Advantage Of?
You want to be sure that your business is making the most of all tax opportunities that are available to it. Research and Development credit is a prime example of something that may be of a benefit to your company. There may be some local tax opportunities that your accountant can also enlighten you to.
How Can I Lower My Expenses Without Compromising Quality?
This is something all businesses want to achieve. You want to increase your profit margin as much as possible without compromising quality. It is a balancing act. Taking control of your expenses is paramount if you are to reach optimum profit levels. Your accountant will help you to assess areas where you are spending a considerable amount of money. For example, maybe you could move to a more cost-effective supplier like HW Part Store. You can then determine whether it is possible to lower your costs without having a detrimental impact on the quality of your products or service.
How Does My Business Compare With My Competition?
It is always important to have a good idea of how you are performing relative to other businesses in your sector. Your accountant should be able to provide you with benchmarks that are relevant to your industry and businesses that are of a similar size. They will be able to give you a good understanding of how you are performing in comparison. This is an effective way of highlighting areas that may need some tweaking, i.e. you could be spending too much on a certain aspect of your business.
Ask your accountant these questions to make sure you run your business as cost effective as possible!
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