Country manager at Xero New Zealand
When paying for a barista to make our coffee or a hairdresser to look after our locks, most of us don’t think twice, and though it’s highly unlikely we’d try fixing our own teeth when we get a cavity, Kiwis have got a DIY attitude when it comes to running small businesses.
Research by Xero found that three out of four SME owners won’t pay an expert to manage their payroll, and one out of four won’t use an accountant or bookkeeper.
This might save money in the short term, but could be costing SMEs heavily over time, through mistakes and potentially missed opportunities.
Not having an accountant or bookkeeper eats into the time SME owners could be spending on developing their business and looking for opportunities that could result in growth.
The DIY finance approach is a false economy and can leave SMEs trailing behind their competitors. There are good reasons for hiring an accountant or bookkeeper, or adopting accounting software, and SME owners shouldn’t shy away from advice, even if it’s once a year.
From a business plan to company formation, loan application to government audit, an accountant can make life easier for you at each step.
You may think you can’t afford an accountant or bookkeeper, but think about how long it would take you to do certain tasks (such as taxes), and ask yourself, is that a good use of your time?
This doesn’t mean you need to employ an accountant full-time or hire one on a retainer basis. Sometimes just a couple of hours of their time will be enough.
Let’s say it takes you 10 hours to do your taxes, and your time is worth $100 an hour. That’s a cost of $1,000 to do your taxes yourself. And there’s always the risk you’ve made errors – especially if you’re multi-tasking like most SME owners.
But if you get an advisor to look after time-consuming tasks like that, it’s highly likely they will cost less per hour than you would pay yourself. Not only will you free up time to generate more revenue, you’ll have peace of mind that an expert is taking care of those details.
If your accountant or bookkeeper uses cloud-based accounting software, they’ll be able to share your business accounts with you quickly and easily.
Delegating your company’s financial affairs isn’t always easy, but you won’t regret it. Some of the most successful business owners in the world are experts at delegating work to the right people – so try to embrace this for 2018.