With changes in technology, there have been changes in the roles different advisors will provide to your business. From bookkeepers to accountants, from CFO’s to business coaches and financial planners, each offers a different skillset. Knowing how best to utilise each and when you need them is key to getting the best advice for your business needs.
Historically, bookkeepers did the data entry into your accounting system and reconciled the bank accounts. Today, with automated accounting systems, the time required to do the data entry and reconciliations is a fraction of what it used to be. The good news is that this means the time and cost of bookkeeping has significantly reduced. To counter this drop in workload, bookkeepers may offer additional services such as BAS preparation and lodgement, budgeting and cash flow forecasting and debt collection.
When you think of your accountant, I suspect that you think of tax returns and possibly BAS returns, and generally all things tax related. They will prepare the annual financial statements and do whatever is required to ensure you comply with both tax and ASIC (company’s legislation) requirements. But accountants may also offer a wealth of other advice and services including budgeting and cash flow forecasting, monthly management reporting, business advice, business exit strategies, business structure advice and the list goes on.
These used to be the realm of the bigger companies, but there is a growing group of CFO’s who are either virtual or part-time who work with small to medium sized businesses. CFO’s come in all shapes and sizes in terms of their background and qualifications. Some are accountants, some are engineers, some are ex-bankers, some come from corporate backgrounds but they all start from a base of management reporting and advice. The benefit of having a virtual or part-time CFO in your business is the insights they provide from drawing on their extensive experience. They are looking into your business from outside it and seeing what you miss as you’re too close to your business.
This is another group that has diverse backgrounds. When looking for a business coach, look at their credentials and background. You want your coach to have been down your path before you. That is to say, you want them to have been in business and built a successful business in the past, that way you know they’ll know about the bumps and hurdles along the way and how best to navigate them.
Financial Planners or Advisors
Financial planning is a whole separate industry that encompasses personal insurances (life, trauma, income protection, total and permanent disability), and investment advice (superannuation, share investment advice, wealth accumulation). Financial planners will do financial modelling to determine how much money you will have in retirement and in doing so prepare extensive budgeting and cash flow forecasting. This is more about your personal income, expenditure, assets, and liabilities than your business numbers, although it will include your income from the business.
Each one of the five different advisors have a role in your business. When you’re in start-up phase I highly recommend that you do your bookkeeping yourself. It’s a great way to get a basic understanding of how your business cash flow and profit is determined and the lessons you learn in doing the bookkeeping will stand you in good stead into the future. The one advisor you do need to have from the get-go is an accountant. Look for one who specialises in start-ups to make sure you are set up correctly.
Once your business is up and running and it’s time to start delegating some of the admin work off your workload, find a bookkeeper to take over from you. Once you’ve got that in place and you’re wanting to grow your business to the next level, consider working with a virtual or part-time CFO to provide the insights and education around your financial reports. For help growing your business and dealing with the other aspects of
For help growing your business and dealing with the other aspects of business that aren’t financially related, like building teams, marketing your products or services, opening a second location, and so on, find yourself a business coach who has done what you want to do and learn from them.
In behind all this, you should have a financial planner, if only in the early days to ensure that you have appropriate personal insurance in the event of a calamity. As you build up the business and accumulate surplus funds, your financial planner can assist with a wealth creation strategy and provide advice on superannuation.
Every successful business is supported by key advisors who each play a different role in advising the business owner. Have a look at who is supporting your business and make sure you are getting the right advice from the right advisors.