As an accountant, pursuing work with SME firms can be extremely beneficial. The experience gained from working with a smaller firm can be easily applied to a larger firm, making for an excellent learning opportunity. Additionally, sticking with a smaller business as it grows into a larger, more successful one is impressive, netting you valuable professional connections and additions to your portfolio. In order to maximize the positive benefits you can gain from working with them — as well as providing them with guidance in your capacity as a most trusted advisor — here are some accounting strategies for SME firms you can adopt or suggest to those running the show.
Focus on a Few Talented Individuals
When it comes to finding qualified employees, smaller businesses won’t have the same amount of assets as larger firms. This may make it harder for them to allocate resources in order to hire the most experienced and capable individuals for key positions. However, positions such as product management are ones that your SME clients should definitely devote a healthy chunk of resources toward.
If the firm you are working with is centered on product development, a capable product manager is directly relevant to the success and profits of the company. For example, one study conducted on SME firms in Canada found that having a capable product manager improved their firms through superior financial forecasting and sales support. A product manager can make or break a product, and a product can make or break an SME firm, so devoting some extra capital toward finding an exceptional individual to manage a product line can yield big dividends. This can be accomplished by suggesting this course of action to the company’s board, or by advising them to consider budgeting out a larger paycheck for such a highly valued position.
Some small business owners may decide to hire a sole practitioner or accounting services firm that specializes in small businesses. A qualified accountant or CPA can assist in many ways outside of managing day-to-day finances. CPAs’ tax knowledge is crucial and they can help with developing a good business growth strategy.
Most of the Big 4 Accounting firms in the US require accountants to get their CPA certification. This process is difficult, and it can take months of preparation to finalize the process. However, many firms find that accountants with their CPA are more qualified and can be more beneficial to clients, especially small businesses. Because of this, an SME may need to allocate more time and money toward finding a qualified CPA. Rest assured, this investment will pay back dividends over time.
Aim for Global Business
A terrific benefit to living in the modern era is the ease with which individuals can make connections and conduct business on a global scale. The advent of high-speed Internet, wireless phone communication, and affordable air travel has made our world smaller, in the best possible way. Even if you are an accountant for a small or midsize firm with only a handful of employees, you can still help them conduct business all around the world.
Seeking out accounts in these countries, even if they are very far away from the SME’s headquarters, can be extremely beneficial to its bottom line. As an accountant, taking the initiative by establishing contact with international markets and conducting research on them is the best strategy for this scenario.
Stay Lean in the Beginning
The first five years are the toughest for any new business. Often, SME firms won’t pull a profit in this initial time frame, and a large portion of funding will go toward paying staff. Because of this, many new businesses fail and go bankrupt in this first short span of time. As a most trusted advisor you can help your SME client avoid this fate by showing them ways to run the organization as cheaply as possible while not compromising its ability to function.
If there is an aspect of your SME client’s business that only sees a high level of activity seasonally, such as data input, you can advise them to focus on hiring short-term employees during times of high volume and only keeping a few over the long term. According to accounting.com, owners may want to hire a temporary staff at certain times of the year, in order to accommodate seasonal volume. Talented workers may be worth keeping after the season, which also makes this strategy an excellent long-term plan for finding quality employees.
Another way to stay lean involves taxes and reporting to the IRS. It may be tempting to modify aspects of the SME’s tax setup as a business, but the best practice in the beginning is to maintain a low profile. This can be accomplished by declaring the business a sole proprietorship and filling out a Schedule C form for the SME’s taxes.
Innovation typically comes most often from smaller companies, even if they don’t stay small for long. Something about the energy and hunger of being a small business can often result in brilliant, paradigm-shifting ideas. Many seasoned professionals know this, and will seek out promising SME firms in an attempt to capitalize on the potential next big thing. Because of this, there are many opportunities available for the accountant serving a small or midsize business. All that you need to do in order to reap these benefits is seek them out.