Have you outgrown a year-end-only accountant?

Most owner-led businesses start the same way: a bookkeeper keeps the records, and an accountant prepares the tax return and the year-end accounts. For a long time, that's exactly right.

Then the business grows. More staff, a second site, bigger contracts, a loan, a partner who wants a distribution. And somewhere along the way, the questions change from "what did we make last year?" to "what's happening now, and what should we do about it?"

That's not a criticism of your accountant. Year-end accounts and tax returns are a specialist job, done to deadlines, and a good accountant does them well. It's just a different job from running the numbers every month. Asking your tax accountant to be your monthly finance function is like asking your GP to run the ward.

Six signs you've outgrown year-end only

1. You find out how the year went months after it ended. By the time the accounts arrive, the decisions they should have informed have been made.
2. Your monthly P&L changes when the accountant gets to it. Profit jumps around during the year and moves again at year end.
3. You can't say which part of the business makes money. One P&L for every site, service line or team, so the strong ones quietly fund the weak ones.
4. Tax, super or payroll tax bills arrive as surprises. The amounts aren't set aside in the monthly numbers, so each one lands as an event.
5. "Can we afford it?" gets answered by the bank balance. The next hire, site or vehicle approved on feel.
6. You've asked what you can safely take out, and the answer was "let's see at year end".

If three or more of these sound familiar, the business has grown a need your current set-up wasn't built for.

What the second job looks like

The gap isn't more tax work. It's a monthly finance function sitting between your bookkeeper and your accountant:

• the month closed and the numbers proven, every month, not once a year;
• a short report by the 10th that says what changed, why, and what to do;
• a cash forecast for the next 13 weeks;
• someone to think through the big decisions with the numbers in front of you.

Your accountant keeps the tax and the year end, and gets a cleaner, locked file to work from, which usually makes their job faster too.

Find out where you stand

The quickest way to know is to look at your own file. Our free Financial Health Check is a read-only look at your Xero: a score out of 100, your top three priorities and what each is costing you, and a 30-minute call. Nothing in your file is touched, and nothing changes with your accountant.

General information only, not tax, legal or financial product advice. Your registered tax or BAS agent handles tax and your activity statements.

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• Why your business needs a cash buffer, and how big
• Will you have enough cash in eight weeks' time?
• How much can I safely take out of my company?
• Is your month actually closed?
• Profitable, but no cash: where it goes
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