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Part 1: Accounting

What does your role at AFS entail?

I have two hats in my role. The first is that I need to ensure my team delivers a quality product to our clients and provides value and relevance to their business. In this, I am no different to any other business owner.

However, where my role differs is in the product that we deliver. I get to work with businesses, both big and small, in achieving their goals. While a business may not have any formal goals written down, all business owners have something they want to achieve. It may be that they want to grow their business to improve profits to give them the flexibility to spend more time with the family. It could be that they want to build a business to be able to sell and fund their retirement. Or, they may have an idea they are toying with and want to see where they can take it.

The great thing about my role is I get to work with all these people, set out their goals and help develop strategies to achieve them.

Why should micro/small business owners employ the services of an accountant rather than trying to do it alone?

Accountants are more than the quiet person who sits in the corner pushing numbers on their calculator and telling you that you owe money to the tax office. The landscape has changed. Accountants are now a tool that should be utilised to help review your business and provide guidance. While you have the dream and the passion to drive the business forward, an accountant can offer an experienced hand to guide you and steady the ship.

Accountants get to see firsthand how businesses in your community and further afield work, the troubles they face and the burdens they carry. This makes them a  a remarkable resource.

How can small business owners streamline processes throughout the year to better prepare for EOFY?

The best approach small business owners can take is to look at their record keeping practices. That is, how do they keep track of what actually happens in their business? Some businesses still function well using a manual cashbook and maintaining receipts, others have embraced the cloud to have everything recorded and kept in a location where they can access from anywhere at any time.

For most businesses, some form of software provides the best option. The reason for this is that you can usually produce reports to help guide decision making as you go, rather than a big rush to find out the state of the business. Supporting documentation that is required can be kept can still be maintained in a hard copy, however, more and more businesses are now keeping softcopies of these documents and storing them in their accounting system.

If you are responsible for the data entry into the accounting software, make sure you have the necessary skills to be able to enter the data and correctly reconcile the accounts. If you don’t, get training from a certified trainer.

If you don’t have the time to look after the data entry, engage the services of a bookkeeper. Bendigo is spoiled for choice with good bookkeepers and they can make your job easier and are cheaper than having an accountant to the bookkeeping on your behalf.

What is cloud accounting?

With technology continuing to improve and move to the ‘cloud’, it was only a matter of time before accounting software made the leap as well.

Simply put, cloud accounting is using the internet to access your software rather than physically installing it on your computer. This offers many benefits;

  • It alleviates the need for the business to maintain expensive computer hardware to maintain their software
  • The information can be accessed from anywhere allowing you and your accountant to look at in real time
  • The software is regularly updated by the provider meaning you longer have to install updates such as changes to employee tax rates
  • Generally a monthly subscription fee is charged which works out cheaper than buying the software and paying for annual subscriptions

What should business owners look for in an accountant when it comes to serving their small business needs?

Firstly, they need to look for someone that has experience in your industry. While the basic principles of a lot of industries are the same, each have their own peculiarities. Experience matters.

Secondly, if you are going to trust the accountant to help guide you and your business, you need to set the ground rules;

  • What is it you want them to help with?
  • What will it cost?
  • What else can they do for you?

Be honest with your accountant, if you think they should be helping in other ways, tell them. The relationship needs to work both ways.

Finally, your accountant will play an important part of your life. So it is always best if you have an accountant you can get along with!

What is the most commonly asked question small business owners come to you with and how do you typically respond?

Where did my profit go? It’s a common misconception that whatever money you have left in the bank equals the business profit. Unfortunately this is not the case and it is not unusual that you may have to pay tax even if you have no money in your account! Sounds weird, right?

There are a lot of things that drain cash away from your business that don’t reduce your profit, such as loan repayments and the purchase of plant and equipment. It is important that the business owner understands how different transactions affect their financial results and therefore education is important.

Part 2: Small business in Bendigo 

Based on your experience working with many micro/small/medium and large businesses, what would be the one piece of advice you would give to somebody starting out in small business (from an accounting/finance perspective)?

Make sure you have a business plan. This doesn’t need to be a 100 page document, it may only be two or three. The benefit of doing a business plan is that it gets you to consider what is your business actually about, how are you going to attract customers, what do you need to sell your good/service for to make a profit etc.

A lot of people will overlook this step, because it is all in their head. However, a properly completed business plan allows you to focus on how you want your business to actually achieve your goals and provides a great resource to continue to look at and develop as things change and the business matures.

The business.vic.gov.au website provides a free template that you can use as a starting point.

What makes the Bendigo business community a unique space to grow a business in? How can small/micro business owners use this to their advantage?

Bendigo is a wonderful place. It has an amazing history built on gold, but even today is filled with gems. A world class new hospital will be opened at the end of the year, a phenomenal art gallery, the wonderful Ulumbarra theatre and thriving businesses. Add to this its location only an hour and a half from Melbourne, is it any wonder that so many people are drawn to Bendigo? Look around, how many other regional centres can boast what we have?

When I run into someone in the street looking lost, I like to provide guidance on how they can get to where it is they are going. But I always ask, what brings them to Bendigo? The answers are many and varied, but Bendigo is the place in Central Victoria to be.

For a small/micro business to capitalise on this, they need to identify their target market. Once you know who your ideal customer is you can develop a strategy to get your product or service in front of them.

What does AFS do to support small/micro businesses in Central Victoria?

AFS works with businesses to ensure they are getting the best advice and guidance when it comes to not only accounting, but business management too. We can assist you with cash flow and budgets, business structures, developing business goals, objectives and strategies, bank and finance submissions and more.

We are regularly running free events for small business owners focusing on topics such as business planning basics, keep your business on track, managing your cash flow, financial health check, review and improve your business and Planning for success. We see many small and micro business’ coming along to get free advice and an insight from our industry experts.

We’re lucky at AFS to have experts in a range of areas with valuable knowledge they can give to the community. Sometimes we even suggest that micro business’ don’t need an accountant if they can find a bookkeeper to suit their needs. Bendigo has plenty of good bookkeepers and if you set up a relationship while your business is developing, they can grow with you.

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