Advice from Accountant – How to be ready for EOFY
The end of financial year is typically a busy time for many accountants and businesses. However, Anil Lamba, MYOB Certified Consultant and director of Reliance Biz Services, says the key to a seamless transition is for business owners to work with their financial advisor throughout the year.
“Don’t wait until the end of the year,” says Anil. “Working with a financial advisor at regular intervals during the year can help a business owner identify any issues that could arise at the end of financial year, such as incorrect transaction dates, foreign exchange rates or inventory.
“It is easier and quicker to find mistakes over a short time period than waiting until 12 months has passed. We once had a client wait twelve months, and then it took us three days just to correct his mistakes. That was an expense he could have avoided by getting us to go over the books more regularly.
“As well as correcting mistakes, your financial advisor can show you what you are doing wrong to avoid making the same mistake in the future. We suggest meeting with your financial advisor every two months – meeting regularly, saves our time, and our clients money in the long run.”
It also provides more value for clients. Anil says working with a financial advisor can help a business owner identify the key elements of their operation that can make all the difference to their success.
Anil first established his business over a year ago, after working within a chartered accountancy practice since moving his family to New Zealand a decade ago. A trained accountant, Anil started working with MYOB soon after arriving in the country – finding clients got a great deal out of the software, and each evolution of the product bringing more opportunities to work with business owners.
After deciding to start out on his own, Anil says his new role gives him the opportunity to work with a select range of clients on business development and management. “I work closely with business owners and managers to identify what difference they can make within their business to improve systems, cash flow and profitability.”
Anil says his work has seen him involved in everything from evaluating margins on stock to helping to renegotiate terms on commercial loans – all with a focus on improving the financial position of the business. “It comes down to getting the basics right: looking closely at your inventory to find out what is bringing the best return, managing cash flow, talking to creditors and ensuring you can meet all your costs from month-to-month.
“Staying on top of debtors is very important. If someone can’t pay one month, why would they be in any better position to pay when they owe you for three months? I believe it is better to lose a customer than lose your money continuing to supply goods or services to someone who can’t pay you.”
Anil’s common-sense approach has helped many of his clients find areas of simple improvement in their performance, which have transformed their whole operation. “As an example, I was working with a business owner who had to close his shop every time he went to see a client. By working on a simple cash flow projection, we identified how he could afford to hire a staff member to cover his store, allowing him to make those sales calls while still trading, and doubling his turnover.”
Anil says working with a financial advisor can provide a new perspective on a business. “Everybody can’t be good at everything. Often people go in to business to do what they are good at, but lose sight of the financial aspects – it doesn’t help to be a great salesperson, if you can’t get paid by your customers.”
Since establishing his business, Anil has moved a quarter of his client-base onto MYOB LiveAccounts, MYOB’s online solution, which offers 24-hour internet access to your accounts, wherever you are, and real-time collaboration with accountants and advisors. Anil says one of the key reasons for his recommendation is the automatic bank reconciliation provided by the online solution, which saves both him and his clients considerable time. “LiveAccounts is very, very accurate and time-effective.”
Convenience, service, and above all value, are what Anil believes should be at the heart of the relationship between a business owner and their accountant or financial advisor – values that will set them apart for a business looking for advice and support. “As advisors, our job is to add value, not just charge for a service,” said Anil.
Six Steps to a Happy New Financial Year:
- Select a trusted financial advisor with an interest in your business and experience in your industry.
- Cut your bills down and ask your financial advisor for an annual plan, with regular meetings.
- Ask your financial advisor to help analyse your business performance for areas of improvement, such as profit margins, debtors and credit management, and inventory.
- Work as a team – your financial advisor can help with the information needed for a bank loan and can help provide the level of transparency – and credibility – needed for a successful application.
- Keep records as automated as possible, and keep your data entry up-to-date.
- If accounting is not your strength, ask for help – don’t just guess! If it’s garbage in, then it will be garbage out.