Number 1: How often should we meet?
The answer to this question should be glaringly obvious to your accountant. At least once a month! Your accountant is your first business advisor you have. They are the first ones to assist you in starting your business, running your business and ensuring that you run your business as legally sound as possible. They should know the value that a monthly meeting has for your business and should make themselves available to meet with you to discuss your previous months’ financial performance at a minimum.
Number 2: Can we arrange for a fixed monthly fee that includes all possible costs?
Many accountants only charge their clients whenever work is to be completed or when it has already been filed with the authorities. Although this might be a great policy to abide by, it is not very forgiving on your cash flow. You might just receive an account (however much justified) that will give you sleepless nights. Ask your accountant to calculate the total cost of all your SARS and CIPC returns that need to be completed as well as all legally required accounting work like your annual financial statements. Then ask them to add some consulting time to the bill and convert the total to a monthly figure. This will allow you the breathing room to pay off the account over a 12 month period, lessen the burden on your cash flow and allow you to budget better.
Number 3: Can you give me examples of business decisions that I need to consult you on?
Accountants are smart people and they are even smarter when it comes to tax planning. They are the perfect business advisors to consult when making business decisions as they know what the tax impact would be of a specific decision. Want to buy a new bakkie? They know that a Club-Cab or a Cab-and-a-half is the best buy for VAT purposes. Want to buy new machinery? They know where to go ask for the best loan terms and interest rates. Want to reduce your debts as quickly as possible? They know which liabilities to pay to reduce your debts quickly and easily. Just ask them!
Number 4: What are your most successful clients doing right?
One of the biggest advantages that accountants have without realizing it or capitalizing on it is the huge amount of business data they possess. From their client base, they can tell you which industries are struggling at the moment, which ones are soaring, which ones have the best profit margins, which ones have the most risks involved and what their top clients are doing right to make money. Don’t be shy to ask your accountant what their best clients are doing right and how you can implement those strategies.
Number 5: What is my break-even point?
Yes I had to include a financial question. This question is so critical that I will include it every time I get asked about accountants and their advice. Your business’ break-even point is that point where your monthly income just covers your monthly expenses and you make no money but you don’t make a loss either, you are just able to keep the doors open. Every business owner should ask this question to their accountant at least every 6 months. Yes that is often, but how quickly does your business model change when you pay off debt, or when you buy a new bakkie or new machinery? Every time you make an important business decision, this number changes and so does the income you need to generate to cover the expenses. Make sure you are on top of things!