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James Solomons

Accounting, Business & Technology; Advocate, Entrepreneur & Educator

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Small Business

Partnership model to keep ‘falling away’

First published on Accountants Daily – 11th October 2016

https://www.accountantsdaily.com.au/professional-development/9593-partnership-model-set-to-keep-falling-away

While the partnership model remains “old-school attractive” in the industry, it is becoming increasingly less appealing to younger accountants with different career and lifestyle priorities to the previous generation, Xero’s head of accounting and director at Aptus Accounting and Advisory, James Solomons, told AccountantsDaily.

Mr Solomons is finding that younger accountants who are eyeing more senior positions are thinking either “I’m going to go my own way, or stay an employee”.

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Five resolutions to kick off the new financial year

Cloud software can help you track which customer segments are spending most, influencing where your marketing focus should be as you expand in the new financial year.

The flurry of activity that is EOFY should have died down by now, making it the ideal time for small-business owners to take a retrospective look at how their business performed over the past 12 months and how they can take their business to the next level in 2016-17. Just as we set resolutions when the clock strikes midnight on 31 December, it’s a good idea to look at our goals for the new financial year to help grow profits and strengthen the business.

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6 practical steps to introduce advisory services in your firm

The next phase of the accounting industry — where accountants become true advisers to their clients and not just data hoarders — is very much underway.

But it’s often difficult to know exactly where to start, and what changes to make to help that transition. Having made that change myself in recent years, with a practice of 150+ business clients and growing, here are some practical tips for any firms looking to fundamentally change the way they approach advice.

Let the technology do the heavy lifting
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Get Connected Edition #6 is out !

Thanks for tuning into Get Connected Edition Six !

 

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Ten big challenges facing small businesses in 2016

10 challenges and tips to help overcome them for SMEs and their advisers

 

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Get Connected Edition #5 – v2.0!

Welcome to Get Connected 2.0 ! Edition Five

 

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This weeks edition of Get Connected – #4

Get Connected Edition Four ! Thanks for tuning in !

 

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Taking stock (of your business) halfway through the financial year….

As first published in the Sydney Morning Herald on Feb 3, 2015 http://www.smh.com.au/small-business/finance/taking-stock-halfway-through-the-financial-year-20150203-134xzj.html

It’s the halfway point of the financial year, and the start of the calendar year. School holidays are over, and business is picking up again. Now is the perfect time to step away from the frantic day-to-day of running your business, take a few moments to do a health check, and see how you are tracking against your ambitions. Here are nine quick ways to gauge your success halfway into the financial year:

Personell success

1. Employee growth

Have you grown your small business headcount? Our latest data shows that the 158,000-plus small businesses using Xero in Australia have increased their payroll significantly in the last six months, a great metric for growth. If you haven’t been able to hire more full time staff, have your part-time or casual staff increased the number of hours they are logging? If this is the case, and business is picking up for 2015, it might be worth sitting down with some of your casual or part-time staff and discussing whether they would be interested in taking on a full-time role.

2. Employee satisfaction

Are your employees happy? If you are not measuring this, it’s a metric I recommend you start to look at now. There are various ways you can do this, but the main difference between them is that you can do it either anonymously or directly. What will determine which method works best for you and your employees is the size of your business. If you have just a few staff, anonymous happiness surveys generally won’t work too well as they can seem insincere. In a small business, engaging with and listening to staff is the best way to measure their satisfaction and progress. Ultimately, you need to make a judgement call on whether your employees are happier now than they were six months ago. If they are, you are on the right track!

3. Quality of work

Has the output of your team increased? Are you producing more, are you more efficient? Although measuring productivity will vary across different businesses, as a business owner you should outline a number of measurable areas to which you can ascribe each employee’s productivity. If the quality and productivity of your work is increasing, then you are well on your way to having a successful 2015!

The bottom line

4. Monthly cash flow

Is your monthly cash flow increasing? If it is the same or less as it was six months ago? Have you been able to reduce overheads? Or are there things you can do to increase monthly cash flow for the next six months? This is probably one of the quickest ways to check your business is on the right growth trajectory, so keep checking in on this figure.

5. Getting paid faster

Are you getting paid faster by your customers, clients, or suppliers than you were six, 12 or 18 months ago? Using online invoicing through Xero can help you get money in the door more quickly. With tracking, payments integrations, and automated follow-ups, technology can help you get paid and grow faster. We analysed data from 16 million invoices and saw small businesses reduce average time to payment from 48 down to 33 days. Although it’s a metric not measured by many small businesses, time to payment can make a huge difference especially if your business is operating on credit.

6. New clients or customers

There are two ways to grow a business: earn more revenue from existing customers, and add more customers. Have you been able to add new customers or clients in the last six months? If not, what can you do to attract more in 2015?

7. Efficiency

Have you been able to reduce overheads, or increase your profit margins? Whichever measure you use to track efficiency, if you want to grow, it should be increasing. The financial year half-year mark is the perfect time to look back over your expenses and outline a number of areas on which you can cut back. Even cutting back on small incidental expenses incurred over the past six months can make a big difference to your bottom line.

Goals

8. Business targets

I hope you have set some ambitious, but achievable goals for your business for this financial year. If so, are you at least halfway to achieving them? If you haven’t set goals, now is a good time. If you’re planning on creating some for the latter half of this financial year, make sure that they’re SMART — specific, measurable, agreed-upon, realistic and time-based.

9. Personal goals

Growing a business and creating jobs can be very fulfilling. However, it can take its toll on the business owner. Are you hitting your personal goals too? If you are not leading a happy, healthy lifestyle, your business will end up suffering in the long run. Look after yourself and your loved ones.

The importance of your Accountant in an ‘Automated World’

Should I Sack My Accountant?

As featured on LifeHackerAU..http://www.lifehacker.com.au/2014/12/should-i-sack-my-accountant/

A lot of people ask me if accountants are going out of business.

As the head of accounting of a company that allows small business owners to easily do many of the things their accountant used to do, as well as being an accountant in public practice, it is a question I get asked frequently. A more pointed question however is “Do I see much of a future for accounting professionals in this automated world?”

Some people even ask me if they should sack their accountant once they’ve got Xero up and running in their business.

My answer is always the same – absolutely not! Thanks to the efficiencies created by cloud accounting the opportunity for accountants and their clients to work closer together has never been greater.

The role of the accountant is changing. Instead of just focusing on historical financial numbers (although these remain important for things like tax and keeping track of how a business is performing) many accountants also provide valuable advice about how to run and grow your business.

There are several milestones in the lifecycle of your business when you should get the input and advice of an accountant.

The first is when you start out. You should consult your accountant on the best business structure for you. The reasons for this are many. The right structure can save you tax each year as well as when you sell your business. It can also ensure that your business and personal assets are appropriately protected from creditors or if legal proceedings are brought against you. And it is important when taking into account what you might want to do with the business in the future whether that be selling it or passing it onto your children.

Your accountant should also review your business plan. We’re all a bit starry-eyed when we start a new enterprise, so having an impartial business advisory specialist cast their eye over your plan and the assumptions you make can save you a lot of time and money later on. They can draw on their experience to spot pitfalls you might have overlooked. For instance, they might think you’ve underestimated your costs or question how you’re going to meet your sales projections.

You should also ask your accountant for help before you apply for finance, make a major investment or put your business on the market.

But it’s not just milestones you need your accountant for. You should also ask them for advice on the day-to-day running and growing of your business.

Some accountants have set themselves up as ‘virtual CFOs’. They do the same sort of strategic and advisory work a chief financial officer would do in a larger company, but because it’s for only a few hours a week or a month it’s affordable for a small business.

The rise of cloud-based accounting software means your accountant can easily examine your business’ real time financial data from anywhere and at any time, not just at the end of the month or the quarter.

They use this information to advise you on how to improve your business.

Broadly, they can act as an advisor and sounding board for any financial and administrative issues.

More specifically, they can help you analyse your financial data and performance, and identify growth opportunities by providing insights on cash flow, pricing, inventory and other financial measures. Your accountant might, for example, notice that you have a lot of stock that’s selling too slowly and advise you on how you can better manage your inventory to free up the cash that’s tied up in stock.

You should also work with your accountant to set targets for your business. They can advise you on which KPIs you need to grow your business, and help you formulate a plan to hit them. And they can set up real-time cloud based reporting systems to track your performance against these KPIs and targets. This is invaluable to not only measure your success but also to highlight any areas of concern.

They can also look at your business processes to ensure you’re doing things as efficiently as possible. A lot of accountants have access to benchmarking data, which will help you compare your own profitability and efficiency with other businesses in your sector.

Finally, even if your tax affairs are very simple, it’s still a good idea to get your accountant’s advice. They’ll be up to date with the latest changes in the tax law and know about all the deductions available to you to help minimise your tax bill.

While your accountant can look over your finances remotely using your cloud software, it’s a good idea to have regular face-to-face meetings with them as well so you can go over any issues and problems in detail as well as brainstorm and explore new ideas to help your business grow.

You should think of your accountant as an important partner in your business. The more time you invest in the relationship, the more your accountant will learn about your business and the more valuable their advice.

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