5 questions every small business owner should ask their accountant

At Adams Accountancy, we think a good accountant is your company’s GPS – we’re not just here to tell you where you are, but to help you find the best route to where you want to go. In this blog, we’ll share the five most powerful questions you should be asking your accountant to unlock growth, save money, and keep your business running smoothly.

1. How can I improve my cash flow?

According to the Insolvency Service, 25,158 businesses went insolvent in 2023. Although there are several reasons for these failures, late payments are a huge factor for many businesses. It’s like having a healthy heart but no blood flowing through your veins – your business simply can’t function without good cash flow.

When you ask us about improving cash flow, we don’t just look at your bank balance. We dig deeper. A construction company we work with in Sevenoaks was always struggling with cash, despite having plenty of work. By drilling into the detail, we helped them spot that their payment terms weren’t working and their materials purchasing wasn’t aligned with their project schedules. Simple changes to both transformed their cash position within a few months.

What to ask next

• ‘What payment terms should I be setting for my different types of customers?’
• ‘When should I start conversations about late payments with clients?’
• ‘How much cash buffer should my business keep?’
• ‘Could invoice financing or similar options work for my business?’

2. Are there any tax deductions, credits or reliefs I’m missing?

Tax rules change more often than the British weather and missing out on legitimate claims and deductions is leaving money on the table. One of our new clients, Sam – a local physiotherapist – was amazed to discover she could claim for her professional development courses and some of her car expenses. She’d been missing out on these expense deductions for years before she asked this simple question.

Your accountant should be proactively spotting these opportunities, but it never hurts to ask specifically about:

• Recent changes in tax legislation that might benefit your business
• Industry-specific deductions you might not know about
• Strategic timing of purchases and expenses for optimal tax efficiency
• Minor deductibles like trivial benefits and annual party allowances

What to ask next

• ‘What records should I be keeping to make it easier to claim these deductions?’
• ‘How can I plan my big purchases around tax years to get the most benefit?’
• ‘Could my research and development work qualify for special tax relief?’
• ‘What expenses am I currently missing receipts for that I could be claiming?’

3. How can I prepare for future growth?

Growth is exciting, but it’s also when many businesses stumble. Thinking ahead can help you avoid issues with profitability and cash flow down the line.

A client running a successful online shop in Dartford came to us planning to open their first physical store. By asking about future growth early, they were able to create a realistic budget, forecast cash requirements, and plan for everything from shop fitting to staff costs. They opened their store last month, and because they planned properly, they’re already exceeding their targets.

Your accountant can help you:

• Create realistic growth forecasts
• Plan your funding needs before they become urgent
• Structure your finances to support expansion

What to ask next

• ‘At what point should I consider bringing in additional staff?’
• ‘How do I know when it’s the right time to move to bigger premises?’
• ‘What financial benchmarks should I hit before expanding?’
• ‘Should I be putting profits back into the business or taking them out?’

4. Is my business structure still suitable?

Your business structure should grow and change as your business does. We recently helped David, a freelance graphic designer save over £4,000 in tax by switching from sole trader to a limited company at exactly the right time. But timing is everything – make this change too early or too late, and you might not see the benefits.

This question can start discussions about:

• Tax efficiency as your profits grow
• Protecting your personal assets
• Making your business more attractive to investors or buyers
• Planning for bringing in business partners or family members

What to ask next

• ‘What would trigger the need to change my business structure?’
• ‘How would bringing family members into the business affect my structure?’
• ‘What would the practical day-to-day changes be if I switched to a limited company?’
• ‘How would a different structure affect my personal tax position?’

5. What metrics should I be watching?

Running a business without watching the right numbers is like trying to drive with your eyes closed. But with so many possible metrics to track, which ones really matter?

One of our restaurant clients was obsessed with their total sales figures but wasn’t tracking their food costs properly. When we helped them focus on their gross profit margin instead, they discovered some of their most popular dishes were losing them money. Small menu tweaks later, and their profits increased by 15%.

Your accountant can help you identify and track the metrics that really matter for your specific business, such as:

• Gross profit margins
• Customer acquisition costs
• Stock turnover rates
• Break-even points

What to ask next

• ‘How often should I be reviewing these numbers?’
• ‘What tools can help me track these metrics without getting overwhelmed?’
• ‘Which metrics are most important for my specific industry?’
• ‘What changes in these numbers should prompt me to contact you?’

Quick self-check: Which questions matter most for your business right now?

Take a minute to tick off which of these situations sound familiar – it’ll help you know which questions to prioritise when you chat with us!

Cash Flow Check ✓

• Finding yourself checking the bank balance more often than usual
• Sometimes struggling to pay suppliers on time
• Notice your busy season isn’t matching when your cash comes in
• Have customers regularly paying late

Tax Planning Check ✓

• Made significant equipment purchases this year
• Working from home some of the time
• Using your personal vehicle for business
• Planning any big investments in the next 6 months

Growth Check ✓

• Thinking about taking on (more) staff
• Considering moving to bigger premises
• Looking at expanding your product/service range
• Finding yourself turning away work

Business Structure Check ✓

• Profits increasing year on year
• Thinking about bringing in a business partner
• Worried about personal liability
• Planning to sell the business in the future

Financial Metrics Check ✓

• Unsure which numbers really matter for your business
• Want to understand your profit margins better
• Need help with pricing decisions
• Want to compare your performance to similar businesses

Scoring:

1-3 ticks: Book a quick chat with us to explore these areas

4-7 ticks: Time for a proper sit-down to plan your next steps

8+ ticks: Let’s get a strategy meeting in the diary – there’s lots we can help with!

Not sure about any of this? Don’t worry – that’s exactly why we’re here. After all, every business owner started somewhere, and there’s no such thing as a silly question.

Get strategic with your finances

Remember, your accountant should be more than just someone who helps with your tax return once a year. We’re here to be your financial sounding board, your strategic advisor, and sometimes even your voice of reason when you’re planning big changes.

These five questions are just the start of the conversation. Every business is unique, and the best advice comes from regular, open discussions with your accountant who understands your specific situation and goals.

Book a free, no-obligation chat with our friendly team – we’ll even make you a cup of tea (and biscuits). Whether you’re worried about cash flow, planning for growth, or just want to make sure you’re not missing any opportunities, we’re here to help. After all, no question is too simple, and it’s always better to ask than to wonder ‘what if?’

Don’t like online forms? Give us a call on 01322 250 001 and we promise to answer.