Searching for Financial Advice for your Business – The do’s and don’ts

For any business owner, getting the right financial advice when starting or growing your business is pivotal to company success. Most entrepreneurs who have started their own business focus on landing the deals to generate income, but getting the right financial advice is just as important as landing those deals. Entrepreneurs tend to be “the jack of all trades” and make the mistake of not consulting with an experienced high level company financial adviser (such as a financial manager or financial director) which could cause major headaches down the road.

Searching for financial advice for your business?

THE DO’s

 1.     Separate your bank accounts

The first thing your financial adviser should tell you is to set up separate banking accounts for your business. Don’t ever mix your business and personal accounts. This has massive tax implications and one should never operate the business through personal bank accounts or credit cards as the consequences could be dire.

2.     Consult an experienced company financial adviser for tax requirements

Always consult an tax advisor or experienced accountant. Find a registered financial adviser to prepare your annual tax returns, give you tax planning advice, setting up and applying for VAT numbers and certificates and a myriad of other tax related activities. Whilst you might be able to prepare and submit your tax returns by using SARS E-Filing, you could save yourself lots of money by having a preliminary consultation with an experienced financial adviser regarding how to benefit the most from tax legislation for your particular business. Taxation structures for private individuals and companies are completely different and change all the time. If you don’t have a company financial adviser employed full time you can engage with specialised financial advisers such as financial managers or financial directors on a part time basis who can set up structures for the business moving forward.

3.     Sales agreements and contracts

The common misperception in business is that you only need a legal representative to look over financial agreements and sales contracts. This is not the case. One should engage the services of an experienced chartered accountant or financial manager as they will be able to accurately advise you on these contracts and agreements and the financial implications thereof.

4.     Securing of funding

When any business is looking for funding they will need accurate and up to date financial reports, income projections, profit and loss statements and forecasts based on realistic budgets. An experienced business financial adviser will have had years of experience in securing funding and the necessary know how on the documentation needed when applying for funding through a variety of channels. Part time financial directors will have built up a relationship network with venture capitalists, banking institutions and private investors that you could leverage.

5.     Automate your accounting and extract the right financial data

An experienced business financial advisor will be able to offer advice regarding what accounting systems best suit your business. They will have used most, if not all, accounting packages and will be able to extract and interpret meaningful data from your existing system or oversee and manage the process of moving from one system to another.

THE DON’TS

1. Don’t think you have to do it all yourself

2. Don’t appoint a business financial adviser such as a financial manager or financial director purely on what they tell you. Check references and verify experience.

3. Don’t think you can’t afford to engage with a high level experienced financial manager or FD! There are companies that outsource these high level execs on a part time or interim basis. Their experience is invaluable to your business but bear in mind they are not book keepers or low level accountants, the outsource option allows business owners access to reputable FM’s and FD’s on a basis that is affordable to the business.

4. Don’t be afraid to seek help.

 

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