Page 20 - Retail Pharmacy March 2021

18 BUSINESS THROUGH INNOVATION FINANCE TBACK TO THE FUTURE Show me how to add value to my business. Overall, to have an effective relationship, wo decades ago, I wrote and associated goals, as well as your a letter to the editor of plans. As your plans change, make Business Review Weekly your accountant aware, as this may in response to an article have a significant effect on the financial published in that journal. The article strategy employed. • discussed the role of accountants with small businesses in general, primarily focusing on criticisms from business owners about the accounting profession. Most comments related to the price of accounting services. Some also referred to accountants being difficult to contact (as they were so busy). Other complaints were that the accountant often neglected to contact them. So, a wide range of experiences. My letter offered a few suggestions that I felt could help improve the situations of business owners, based on my experience on the other side of the fence. A short time later, I was invited by the then editor of Retail Pharmacy to contribute an article based on my original letter to BRW. The key points from this first article are presented below, proposing how to fine-tune the relationship you have with your accountant. While a few years have passed and accounting is a much more technologically based profession, the sentiments are still valid: Communicate your individual needs. Do you need quarterly reports on profitability during the year to avoid any nasty tax problems, or can you determine your tax position from your own observations? Are you totally confident in your point-of-sale system, or would you like independent management reports to compare with those generated by yourself? Would you like to prepare your own cashbook on your computer, or can you use your time on more profitable activities, etc? Discuss your short, medium and long term goals together. The more background your accountant has, the better quality advice you’ll receive. They must be aware of your current activities The cost of accounting fees isn’t the biggest issue. Some advice may be invaluable. For instance, you may save thousands of tax dollars when negotiating a finance deal for business purchase or evaluating a lease decision on a shop-fit, computer and vehicle. Another example concerns capital gains implications on purchase or sale of a business or rental property, considering CGT rollover concessions. Never say ‘I only want you to do my tax’. Tax compliance work is only one of your needs, but there are areas where your accounting dollar can have greater returns – for example, cashflows, business plan, finance applications, financial planning and investment advice, etc. You would never ask your doctor to treat one of your ailments at the exclusion of all others. Your finances are no different! Be organised and pay attention to detail. This will reduce any unnecessary time spent attending to routine tasks (such as reconstructing lost or inaccurate records) and allow accurate management reports and tax returns to be prepared on a timely basis. Further, it should also help avoid any surprises at tax time. If you’re not satisfied, say so. You have the right to be critical, but don’t expect someone to be able to read your mind. When a customer walks into your shop, you rely on their input to provide the correct solution. So, tell your adviser: your accountant must be intimate with your business and your specific needs. This will help generate new ideas, and means that they’re better equipped to review your financial affairs regularly. As there is far more emphasis on the need for strategic business and financial planning these days, you must be aware of what you really want from your professional and personal life, then ensure you’re on track to achieve your goals. Your accountant should be the person in the best position to advise you on all aspects of your financial strategy. Significant changes over the years have impacted small business and their accountants. Additional tax compliance requirements, such as GST, STP and compulsory superannuation, require accounting data to be processed and reported on regularly. Technology has empowered even the smallest business, so they have access to relatively inexpensive and reliable bookkeeping software, but this requires direction to harness the power. Also, financiers frequently require regular management reporting to demonstrate ongoing financial performance as part of their lending covenants. Reading my original article again, more than 20 years later, I feel it still has the same relevance today. By Neil Featherstone. Director Pinn Deavin Neil Featherstone is a director of Pinn Deavin, a leading accounting, management consulting and investment firm. Neil has been advising pharmacists since 1984. Inquiries: neil@pinndeavin.com.au or 02 8525 3700. • • • • • Keep it simple and tell it like it is. No nasty surprises. Don’t be a stranger. Be more involved with my major financial decisions. Help me pay less tax and grow my assets. Accountants specialising in Pharmacy www.pinndeavin.com.au Neil Featherstone (02)85253700 Neil Featherstone 30x190.indd 1 RETAIL PHARMACY • MAR 2021 19/1/05 8:38:24 AM 2019-1-11_PinnDeavin_StripAd_Proof.indd 1 11/1/19 1:26 pm