There are many fantastic reasons for going into business for yourself, including following your entrepreneurial dream, flexible hours and being your own boss. For me, I love to support small local businesses. A business owner can delegate unwanted tasks (woo-hoo) but unfortunately you cannot escape ultimate responsibility of Business Ownership. A Business Owner has the most to gain and lose from its activities.
By understanding basic financial reports and understanding how they are generated, the Owner can ensure that the pendulum swings in their favour and really drive key aspects of their business. The saying “What Gets Measured – Gets Done” encompasses this point. There is nothing to lose and everything to gain by teaching yourself or undertaking a course in BUSINESS OWNER ESSENTIALS.
Conversely, if a business doesn’t satisfy its compliance obligations, it will incur penalties and undergo immense stress. The key is to know enough to ask the right questions when required.
I can hear you – “I don’t have a brain for numbers” and “I have a bookkeeper for that”.
With the increased use of Commercial Bookkeepers, BAS Agents and Accountants and the regulation of the industry, many owners are enjoying the benefits of a much higher quality service. The benefits of outsourcing your bookkeeping are numerous but there are still risks involved.
In a small business employees and contractors often take on a much broader and all encompassing position. Whilst there are no hard and fast rules about the roles of each profession it helps to understand what the qualifications and experience of the accreditation means to you.
There are many types of accreditation's for accountants; however they all have one thing in common. They must be an accredited “Australian Tax Agent” with the Tax Practitioners Board. Financial Statements including a Profit & Loss and Balance Sheets often have a different set of rules than Tax Rules. A Tax Agent must understand the Tax Rules, and the implications of different entity types and different tax types.
A good accountant will support the BAS agent and Bookkeeper in correctly applying the regulations, and guiding transactions related to the entity structure and will be experienced and well networked in small business issues.
A great accountant will understand your business
and apply context and practical solutions to the issues you experience and communicate them to the Business Owner in a way that can be followed through. A great accountant will also use business context and experience to validate the bookkeepers and BAS agents work.
A BAS Agent is also accredited by the Tax Practitioners Board and is required to have a solid understanding of GST, Payroll and basic Business Structures. The role of a BAS Agent is to prepare and calculate BAS values, oversee Payroll and Payroll Compliance. The Tax Practitioners Board has some good information on this.
A good BAS Agent will consistently apply the regulations to the business. They will also incorporate their business understanding and context to validate your numbers.
A great BAS Agent will be proactive in payroll and GST treatments to allow for planning and reporting to get positive outcomes, includes reconciliations to reduce the risk of non compliance. A great BAS agent will regularly discuss the BAS, GST and PAYG issues with the Business Owner to keep them informed and allow for planning.
A bookkeeper is responsible for enacting and recording transactions, and to make sure that the business runs smoothly including bank reconciliations, debt collection, accounts payable and potentially extending into finance, sales and other areas.
A good bookkeeper will be consistent and apply their business knowledge and context to ensure that the end reports correctly represent the business.
A great bookkeeper will know when to ask questions, and have a good network of resources to find solutions.
BUSINESS OWNER - Responsible for Everything
As a Business Owner, is responsible for everything.
A good business owner is well informed and can understand a Balance Sheet, Profit and Loss and other key Management Reports.
A great business owner can use their business knowledge to motivate and empower their staff to make a great business
Hints and Tips
Look for accreditation of any externally (and internally) appointed people. Make sure you have a solid understanding of the roles each person pays and their impact on the business.
Use the information each person produces and discuss it so to encourage personal ownership and understanding of context and relevance.
By maintaining access, a little control and ownership of your information future proofs your business.
Use discussions with your employee to highlight what’s important. A good employee and contractor will be guided by and will feel empowered to know that they are making a difference in what is important to you.
Your administration team need to be included in general business matters, as they will be able to ensure the information and outcomes you are interested in are reported appropriately.
There are BUSINESS OWNER ESSENTIALS courses designed specifically to fill this gap. It teaches a small business owner how to look at the records of the business from an overview perspective to enable them to feel comfortable with the risks and opportunities it presents.
Empower yourself as a Business Owner and learn the Essential Skills of Monitoring your Business