Sonia Answers FAQ Around Business And Accounting

As with any industry, we get our fair share of questions. With so many other areas of business being easy to manage yourself, accounting tends to look quite daunting. Our best advice for new entrepreneurs who want to get started with a solid foundation is to work with your accountant. You don’t need to figure it out by trial and error on your own, this can lead to some expensive learning curves! Your accountant is there to work alongside you so that you understand your business’s finances and feel empowered to make the right decisions. Here are some of the most common questions we are asked.

Question 1: What are the basics of accounting?

An accountant is defined as: “A practitioner of accounting or accountancy, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.” The purpose of accounting is to ensure your business funds are managed in a way that feeds growth and prosperity. In order to understand your business’s accounting, you’ll need to work with your accountant to understand your revenue, expenses, assets, liabilities, profit and loss statement, balance sheet, and how to work your statement of cash flows. Learning the difference between a debit and a credit is also essential.

Question 2: What type of accountant do I need for my business?

This is a uniquely individual question since there are many different types of accountants. Selecting the perfect professional for your business depends on your business goals. A Chartered Accountant or CPA is usually the best fit as they are trained, experienced and qualified to give tax, accounting, business growth and cash management advice.

Question 3: Should a small business hire an accountant?

Yes. Regardless of how small or large your business might be, you still need to deal with the collection of funds as well as the analysis and reporting of finances. An accountant doesn’t need to be an ongoing service you have to factor into your budget. Rather, utilise these services before tax season (so you know how to prepare for tax season), during tax season, and when you need specific help with specific tasks, like improving your finances, setting up new protocols for improved cash flow or advice on how to grow your business.

Question 4: Do I need a bookkeeper or an accountant?

A bookkeeper is skilled at gathering your financial data while an accountant is the one who can make sense of it. An accountant is crucial for businesses that want to take control of their finances and grow, while a bookkeeper is someone who maintains business records. In short, an accountant is able to plan, strategise, and assess while a bookkeeper can follow the protocols that are put into place to make this happen. Do you have the financial structures in place to keep your business prospering? Do you need a hand with the actual implementation each month? If so, you need an accountant. Do you want to put measures in place that will direct funds into your business to establish growth and prosperity? If so, hire an accountant.

Question 5: What is the easiest accounting software for a small business?

There are so many wonderful technological advances these days. One of the easiest accounting platforms that I highly recommend is called Xero. Xero handles bank reconciliations, payroll, invoicing and expense management plus much more with ease.

If you would like specific advice tailored to your business and circumstances, Accounting Heart offers affordable service packages where you can work with Sonia one-on-one to help you get your business where you want it to be. Book your FREE Discovery Call to find out more.

Disclaimer: This is general information only and is not advice of any sort. No warranty or representation is provided by Accounting Heart Pty Ltd as to the accuracy, currency or completeness of the information contained in this blog. Readers of this blog should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and / or other advice as may be appropriate having regard to their particular circumstances.