How Your Bookkeeping Business Can Help a Small Business Grow
Running a small business often means being mindful of the budget. If you want to work with small businesses, your ability to articulate and deliver value – beyond the obvious record-keeping – can make a difference. So, how do you describe your value proposition?
Start with these eight ways that your bookkeeping and accounting service can help a small business grow.
Timely transaction recording and accounting means more accurate data for making decisions. Regular review of transactions also makes it easier to correct mistakes. An invoice miscalculation by a supplier is easiest to correct if it’s caught in the same invoice cycle. Monthly reconciliations of cash accounts can identify a deposit error.
Outsourcing the accounting function allows the business owner to spend less time on the record maintenance and more time working on (and in) his business. That can accelerate growth. After all, the business owner’s efforts are best spent on rainmaking, service delivery, or customer relations, not entering receipts into a spreadsheet.
Many small business owners have an intuitive sense for their budget and would benefit from having it formally documented. Far from being a limitation and a static cap on the business, a great budget can be fluid and responsive to external circumstances. It’s a powerful tool to focus the business owner on what matters most. A great bookkeeper can keep the business owner grounded in reality, help forecast day-to-day (and month-to-month) needs; and ask difficult questions about setting aside reserves to cover unexpected expenses.
Cash flow budgeting in particular can make a difference in a business that has ebb-and-flow cycles or a long tail between client acquisition and receipt of payment. Expenses are not suspended in expectation of client payment, and careful planning can save the business owner the stress and expense of having to obtain an emergency loan to make payroll.
Actionable and meaningful reports bring numbers to life. By keeping data entry and bookkeeping up to date, your business owner clients arm themselves with the most current and relevant information for making decisions.
In addition to traditional profit and loss statements, great accountants also run business analytics and compare key ratios and indicators to prior periods and industry benchmarks. Thoughtful review and analysis of metrics can lead to conversations about business process improvement and better strategic decisions. As an accountant, you can help your clients take a lot of guesswork out of running a business.
- Avoid compliance issues
Federal and state compliance can be complex and may require local expertise to help small business owners avoid fines and optimize the use of their time and resources. An effective accountant can keep them focused, highlight potential risks, and help them strategize.
- Optimize taxes
Accurate reporting and careful planning can help small business owners optimize their taxes. An accountant who is well versed in tax planning and compliance is a powerful resource to small businesses.
- Get better loans
With current financial statements and a clear understanding of cash needs, small business owners can be empowered to use loans as a strategic tool to fuel growth. If a critical piece of machinery breaks down, getting a loan to repair or replace it within a week (as opposed to a month) can make a difference between staying afloat or running into the ground.
- Help prevent (or identify) fraud
A challenge for many small businesses is that the owner and a few supporting employees are forced to wear multiple hats. When one person is responsible for multiple functions within the same area (for example receiving cash, recording it, and reconciling bank statements), the risk of fraud is increased. By transferring the recording and reconciliation functions to a third party, the business owner is assured that another set of eyes can help prevent or identify payroll fraud, outright cash theft, or over-ordering.
- Business coaching
As an accountant, you have seen the inside of more businesses than any one of your small business clients. From business strategy to management, you are in a unique position to offer insights, ask questions, and shift the business owner’s perspective.