With over 170,000 accountancy members, CPA Australia knows a thing or two about the industry. A recent study by the global membership organisation found a positive relationship between the involvement of management accountants and strategic effectiveness, highlighting the benefits of including accountants in business management processes.
Here are 8 significant reasons why accountants are essential in every business, big or small, to promote growth:
You can take calculated risks
Due to their knowledge, experience and proficiency in financial analysis, accountants can present a number of effective strategies to grow your business. They can weigh the pros and cons of these strategies and advise you on the most appropriate ones to adopt, helping their clients to avoid problematic situations.
It’s a universal truth that nobody enjoys doing their taxes. If you find tax gruelling and difficult to manage, or it’s just one of those things you can’t get your head around, an accountant can manage this arduous process on your behalf. Additionally, an accounting professional will be better placed to identify any tax savings that might be available to you, therefore allowing you to reinvest in other areas of your business in order to promote growth.
Identifying key performance indicators
Based on your business’s finance portfolio, an accountant possesses the skills to identify what is working well in your business, and what might be setting you back. Sometimes things can go terribly wrong before you even realise it, but experienced accountants can spot it and correct it before it manifests. Furthermore, by highlighting the good processes in the business, they can also suggest ways to improve it further.
Cash flow projections
By having an understanding of cash flow within the business, an accountant can explain where money is coming and going, where it might hinder the business, and even cause potential problems. After seeing it all mapped out, a business owner can then make an informed decision about where to direct finances so they can continue to grow. Of course, most business owners likely manage cash flow forecasting themselves, but an accounting professional can add a new perspective and will likely see areas of opportunity/threats that the layperson might not.
An experienced accountant should draw comparisons with other businesses in the same industry to highlight similarities and differences between them and the company they are advising. Based on their findings, they’ll highlight what they are doing well and what might need to change. For example, if a product’s sales margin is low, the accountant would find out what similar products are priced at and if they are much lower in comparison, they would suggest changes to increase margins and profitability.
Although you might not be considering selling your business, it is useful for you to know how much your business is worth on a regular basis. This will help you set goals in succession planning so that when the time comes, you can leave the company in experienced, trustworthy hands.
Expansions and mergers
Before expanding the business or going into a merger, an accountant would be useful in determining how financially viable it would be before making any commitments. They can also ensure the process goes smoothly so you are freed up for other things. Which leads me into the final point.
Having someone cover all of the financial aspects of your business frees you and your employees up to focus on other areas. It improves your efficiency as a business, which will not only promote fluency and growth, it will also show your potential clients that you are dedicated to developing strong relationships with them because you are not preoccupied with managing finances.
So there are 8 reasons why accountants are critical to the success of any business. This is of course just the tip of the iceberg and every business’s situation is different, but there can be no doubt that accountants can deliver exceptional value to promote business growth and profitability.
If you would like to see how Clinked could help improve your business operations, book a demo with one of our team now, and you’ll receive a personalised tour of what we offer.