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BizReport : Research archives : January 22, 2016

Top 3 tips to improve SMB, accountant relations

A new survey from AccountantsWorld indicates more than half of small business owners spend fewer than 10 hours each month on accounting work; less than one-quarter spend between 10 and 24 hours per month on this kind of work. So it's no wonder that there is a disconnect between what SMB owners think their accountants know, and what they actually do know. Here are three tips to improve that relationship.

by Kristina Knight

Start working with the accountant from the moment the business opens

"Many business owners contact accountants after an event or situation occurs, often asking for a quick fix or patch. Rather than calling an accountant just to do their taxes or prepare financial statements, small business owners should work with their accountant from the start for all financial aspects of their business," said Dr. Chandra Bhansali, Co-Founder & CEO, AccountantsWorld. "Entrepreneurs who work closely with accountants using cloud-based software are often alerted of any potential problems ahead of time. Make sure your accountant is proactively monitoring your important business drivers and key performance indicators rather than just crunching numbers."

Always ask questions

"While an entrepreneur may understand the ins and outs of his industry, he may not understand the numbers fueling the business, such as tax deductions, deferred compensation, cash flow, budgeting and projections. Business owners should ask questions and work with their accountants to better understand the financial health of the company. Accountants using cloud-based solutions can pull real-time data and work with managers to find areas of growth and balance expenses. This also helps protect and better prepare business owners from any unexpected changes," said Dr. Bhansali.

Create a business plan and budget before opening the doors and continue that practice for every year of business

"While consistent loss that results in the depletion of cash is a primary reason for business failure, so many profitable business also fail because of cash flow problems. These can result from many reasons, including slow recovery of accounts receivable or the cyclic nature of the business. Managing cash flow is as important as keeping the business profitable. Work with your accountants to prepare budget and projections to understand the periods of when cash availability might become an issue. Plan how you are going to handle that situation and discuss viable solutions with your accountants. Furthermore, talk to your accountants about ways to increase income and reduce costs to increase your profitability," said Dr. Bhansali.

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Tags: AccountantsWorld, small business, SMB tips, SMB trends

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