All businesses want to be profitable, so it is understandable that they work hard to keep their costs down. After all, every penny spent on overheads comes off of a firm´s bottom line.
Profitable businesses keep their overheads low
If a company typically makes a 10% profit on the products and services they sell they would have to sell something worth $100 in order to make $10. That can be hard to do, especially if what you sell has a low per unit cost. Therefore, spending even $10s more than they need to is understandably something business owners want to avoid
This approach makes good business sense, but not when it leads to you cutting corners to save money. One mistake a lot of company owners make is trying to do their own accounts.
They figure that filling out a few spreadsheets is something they have the skills to do themselves, so why pay someone to do it for them? On the surface, this looks perfectly logical, but when you dig a little deeper it actually turns out to be a flawed argument. Read on and you will soon see what we mean.
Save yourself time
The problem is that filling all those spreadsheet takes time. Even a business owner who runs a small company will have to spend at least 5 or 6 hours a month doing their accounts.
This is precious time that you could better use serving your customers, or marketing your business to make more sales. If you are doing nothing else spending this time doing your accounts will not do any harm. However, if your business is busy you are much better off employing someone to do this work for you.
An experienced accountant will work faster than you can and have access to the best tools. Therefore, you will normally be pleasantly surprised at how little you have to pay them to complete the work, on your behalf.
Tap into your accountant´s business experience
Which brings us to another important point. Over the years, your accountant will have worked with many other companies. They will have built up a lot of experience about how companies work. This is something that you can tap into, and use to improve the way you work.
Understand your business better
A good accountant will do far more than simply keep your accounts. They will also provide you with a set of reports that you can use to better understand and protect your business.
Profit and loss reports
As an example, every company owner can use profit and loss reports to make themselves more profitable. It is not enough to simply know which product or service you sell the most of. Far more important is which of these make you the biggest profits. It is these that you need to focus on selling more of. If you do this you will make far more money with less effort.