Are you getting value for money from your accountant?

Like any profession, the standard of service provided by accountants and prices they charge vary greatly across the industry. So how do you know as a salon owner if you are getting value for money, asks salon consultant, Ryan Fox. Management information It’s really important to have a handle on your finances whatever business you are running so your accounts information should form part of your regular management information along with sales figures, salon and staff performance KPI’s, client behaviour data and marketing campaign reviews. It’s good practice to look at it quarterly, so ask you accountant to provide quarterly profit and loss figures to help you monitor cash flow and expenses. This ensures you always know what’s coming and you don’t get any nasty tax surprises like thinking you can take a dividend, only to find out you have a corporation or personal tax bill that wipes it out. Your money Try not to lose sight of the fact that much of your own money is tied up in the business. Research suggests that around three quarters of a salon owner’s net worth is tied up in their business. You may or may not be great at managing your personal finances, but your accountant should be offering you tips and advice to help you manage your business finances and explaining ways to be tax efficient. Keeping the books Having the correct financial information at your fingertips is crucial to your success in order to make profit, but if you want correct information from your accountant, you need to send it to them on time, so they can keep your bookkeeping up to date. If you have a separate bookkeeper then make sure they are working in harmony with your accountant so they are not duplicating work. If you are doing it yourself, ask yourself is this the best use of my time? Set up a regular schedule Set up a regular weekly, monthly and quarterly schedule that covers what you need to do terms of gathering and sending figures to your accountant. Ensure you get to know which reports from your Salon Management System give you the correct financial data then stick to the schedule. It’s difficult to chase your accountant for information if you haven’t supplied it on time and it’s important for profitability to be on time to avoid fines for late submission of records or payment of tax. Build relationship with regular contact Make sure your accountant keeps in regular contact and is available even at busy times of the year, like the end of January (Personal Tax return date) and March/April (End of the Tax Year). If you’re organised they should respect that and get back to you quickly. Regular contact not only keeps you both in touch with how the business is doing, but also creates trust and is a great opportunity to discuss ways to improve the profitability of the business. Industry specific knowledge It’s a good idea to find an account with specific industry knowledge as the advice you get will be much more precise, as they know it works in your situation Set price We all know the one about accountants putting on the clock when you call them. Although it is sometimes valid to be charged for extra help, ensure you negotiate a set price package for your core accountancy needs so you are paying for results, not time. Ryan Fox is a hair and beauty salon consultant who improves salon performance through training and innovation and offers an accountancy service specifically for hair and beauty salons. For further details visit www.umbrellaconsulting.co.uk