The BIG Questions To Ask Your Accountant!

I’m sure your accountant will be only too happy to answer the questions you’ve got about your finances.

But here’s the thing…

Do you know the RIGHT questions to ask them? 

Which is exactly what we’re going deep into, in today’s blog!

Accountants have a wealth of knowledge and can be a hugely valuable part of your team, as the financial expert (or one of them ) within your business to help you actually make sense of your numbers.

But what if you don’t really understand what you’re meant to be asking them at all?

Especially if your accountant doesn’t proactively help you and is just there to do your accounts at the end of the year!

Maybe you’ve been using the same accountant for years and years, ever since you were a sole trader, when all you needed was someone to complete your tax return.

But as your business has grown – and you now need someone to act more as a financial controller – your loyalty means that you’re not quite ready to walk away from your old accountant yet. Or you don’t want to move away from using them (maybe your accountant is your dad’s best friend and you’d never hear the end of it if you left!).

The main thing is that you want to be getting the best value from your accountant, whatever you’re paying them to do and however much you’re spending.

Because accountants are NOT just there to fill out a tax return at the end of the year. They’re there to use their expertise to look at the numbers in your business and help you to become more successful, more profitable and to help you maximise your tax efficiency, in a legal and ethical way.

So what types of things should you be asking your accountant about? And how often?

Well – most business owners have a meeting with their accountant once a quarter, to look at what’s going on within their business.

If you only speak to your accountant at the end of the year, it means that by the time they get your paperwork and prepare your accounts, you’re having that conversation when you’re already halfway through the next year. Which means it’s too late to implement any recommendations they make anyway. You’re only getting the benefit of half of a year’s worth of advice.

But more than that – if there’s something that you’re doing in your business that you really shouldn’t be (because it’s impacting on your profit or your tax position), the sooner you know about it, the sooner you can change it.

Which is why keeping in touch with your accountant regularly helps!

If you’re using online accounting software – like Xero or QuickBooks – it’s pretty easy for you and your accountant to be able to keep on top of your numbers, so you have a reasonable idea of what the figures look like as you go through the year.

If you’re not using something like this already, it’s always worth speaking to your accountant about which software they use or even just using a simple spreadsheet.  

And then you can arrange to check in with them once a quarter, so you have a clear picture of:

  • Turnover into your business (the sales you make);
  • The cost to deliver the service (your fixed costs and your discretionary costs – all those other things you pay out for);
  • And your profit (the bottom line is always the most important number!).

What does that look like for this quarter?

If your business is seasonal, you might find one quarter looks very different to the next. But if you’re in a business where it’s pretty consistent throughout the year, you’ll be able to see at a glance whether things are on track (or not).

If you’ve set a target for a specific amount of money you want to pull out of your business each month – is there enough profit in your business for you to be able to do that?

If you’re looking to grow your business to a certain level, is your PROFIT (not just your turnover) actually increasing month on month? Or at least growing quarter on quarter, if you look at the average?

If you just wait until the end of the year, you’re not going to know. So it really is worth taking the time to have a look at these figures and to ask your accountant if there’s anything you don’t understand.

My accountant Nicole is just brilliant. I moved to her a couple of years ago, because my old accountant had retired. To be honest, I’d needed to leave for some time! But he’d supported me in the early days (when I didn’t know what I was doing with my paperwork) and out of loyalty, I didn’t feel like I could leave. As my business grew, I just wasn’t getting the monthly input I needed and my calls were never answered when I needed them to be.

Now, I can pick up the phone to Nicole or send her a message and get answers to quick questions as I go, which means she can support me and my business throughout the year. We have quarterly meetings so that I’m really on top of my figures. And she’s an expert at explaining things in a non-complicated way, which I suppose is why we get on so well (as well as her being absolutely lovely!).

So I’ve brought her into Magnetic Wealth™, so she can be an expert for my clients.

It means my clients have the skills and tools they need to go back to their own accountant and know which questions they want to be asking. And they can really understand the answers and exactly what’s meant to happening.

Basically – she’s acting like a financial translator! Everyone who joins Magnetic Wealth™ gets a 30-Minute Tax Blast Session with Nicole, so she can take an overview of their business and tell them the key things they need to know or any quick wins that she spots.

But on top of that, throughout the whole 6 month programme, she’s there to offer personal guidance and support. To do trainings and pop-ups, to make sure that ALL the little things that people need to know about are there.

I just feel it’s so important to connect my clients with experts who can really help them. And often experts I’ve worked with myself, because that’s the best way forward!

So what else should you be asking your accountant on a regular basis?

You’ll want to know about profit and turnover and any trends in the business – things that are going upwards or downwards. Be we also want to know about anything unusual or that looks strange.

It’s worth asking what other typical businesses of a similar type or turnover to yours spend on things. Do your accounts look typical for the type of business that you have? Of course, all businesses are different and quite individual, but there will always be some trends that can provide you with valuable insights.

Your accountant will also be able to advise you on the best time of year to buy new equipment for your business, so you can benefit from tax reliefs and other things that may be available.

They’ll be able to tell you about allowances you can use to reduce your tax bill; ways to structure your salary and dividends; and even whether you might want to consider paying your spouse or children or issuing alphabet shares to them, so you can take money out of the business in a more tax efficient way than just paying yourself a massive salary.

Accountants are tax experts so they know all these things. It’s definitely worth picking their brains and using their expertise!

The other advantage to meeting your accountant regularly – and something to definitely consider – is having a conversation with them around two months before the end of your financial year, to see if there is excess money sitting in your business that you could put into your pension.

Your limited company is allowed to pay into your pension (as an employer contribution as part of your salary package) and if you like, you can pay in up to £40,000 a year. If you’ve set up contributions to pay from your business into your pension each month, there’s nothing to stop you topping this up with a one-off contribution later in the year.

And the best time to do this is just before your financial year end, because then it will reduce your overall profit for the year and means your corporation tax bill will go down.

The only caveat is that if you need your profit to be at a certain level – like if you’re buying a house shortly and need to get a mortgage – then you’ll want to check with your financial advisor first, about whether putting a lump sum into your pension is going to affect the amount of mortgage you can get.

There are some mortgage companies that aren’t bothered at all! But others that will deduct this from the amount that they will lend you, so it’s always worth checking with a professional first.

So!

If you want to get TOTALLY on top of your numbers – with the support of me, an incredible accountant and group of specialist financial expertsI’d highly recommend you take a look at Magnetic Wealth™.

It’s a 6-month transformative wealth experience that will forever alter how you deal with your money, shifting you from dreaming of wealth to building it!

You’ll get private wealth-creation guidance, while being supported by other high-vibe entrepreneurs.

Step-by-step, you’ll lay solid financial foundations, upon which you can build stable structures of wealth – no matter what storms might come your way.

You’ll get SO clear on the path from where you are to where you want to be – and you’ll make giant leaps towards your goals.

And you’ll know exactly which numbers to track – and feel the very real excitement of seeing your net worth increase month by month , as you follow your plan!

Get all the details about Magnetic Wealth™ here right now.

It’s 100% NOT for everyone…

But if you’re ready to take control of all the money stuff and focus on building REAL wealth – rather than just making more money, but having little to show for it down the line – I’d love to support you on your journey!

Until next time,

Claire

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