The Bookkeeper’s Crucial Role
As small businesses experience cost escalations while running a business, your bookkeeper plays a crucial role in proactively preparing and equipping you with essential financial strategies to navigate cost increases effectively.
Anticipating Cost Increases
According to the Australia Small Business and Family Enterprise Ombudsman (ASBFEO), a significant proportion of small businesses struggle with financial sustainability:
43% of small businesses failed to turn a profit in the previous tax year.
Three-quarters of self-employed individuals earn less than the average total weekly earnings.
These statistics underscore the urgent need for strategic financial planning. Small businesses can survive and thrive by implementing strategies despite impending cost escalations.
Enhancing Value Through End-of-Year Analysis
Beyond basic financial reporting, your bookkeeper provides actionable insights into your financial data through comprehensive end-of-year analysis. This includes identifying trends, patterns, and areas for improvement that can drive growth, cost savings, and risk management.
Budgeting and Forecasting Support
Your bookkeeper assists in setting realistic financial goals and creating forecasts based on historical data. They regularly review and update these forecasts to track progress and make necessary adjustments, ensuring your business remains successful.
Tax Compliance Strategies
Utilising their expertise in business compliance and regulations, your bookkeeper helps develop effective tax compliance strategies. They keep you informed about changes in tax laws, deadlines, and lodgement requirements to ensure your business stays compliant and minimises tax liabilities.
Analysing Payroll Obligations
Your bookkeeper assesses the impact of pending increases in national minimum wages, award rates, and superannuation contributions on your total employment costs. They provide insights into employee leave entitlements and the financial implications of pay increases to help you manage payroll effectively.
Leveraging Analytical Reports
Using analytical reports, your bookkeeper empowers you with data-driven insights. They compare current performance to previous periods or budgets, identifying variances and trends that inform future decision-making and enhance business strategy.
Delivering Finalised Accounts Insights
Through finalised accounts, your bookkeeper offers clear indications of performance movements in sales, expenses, profits, and wages. This information enables you to make informed strategic decisions that drive business growth and profitability.
Understanding the Breakeven Point
Your bookkeeper can explain the significance of the breakeven point, which is crucial for determining the sales or revenue needed to cover all costs and expenses. At that point, total contribution is equal to fixed cost, and neither a profit nor loss is made. This understanding guides decisions around pricing, costs, and revenue targets to optimise business operations.
When There’s a Problem
If a significant drop in profit is identified that could lead to financial challenges, your bookkeeper acts swiftly. They promptly inform you and recommend consulting with a financial expert, such as an insolvency practitioner, to diagnose issues and develop recovery plans. This proactive approach ensures your business stays resilient and adaptable in tough times.
By leveraging the expertise and guidance of your bookkeeper, you can effectively navigate increased business costs and secure long-term financial success for your business.
Enquiries: sue@symmetrii.com
Source: The Institute of Certified Bookkeepers
