We all know the general consensus that people dread visiting their accountant like they dread visiting the dentist..
but it doesn’t have to be all pain and no gain…Here are some tips to take the sting out of a necessary business function, and using your accountant as a service provider to its maximum potential. Gone are the days when you only heard from your accountant when they were chasing cheques or an audit was due. In today’s difficult climate your accountant can play a pivotal role in your company’s success. So for those of you starting up a business, here is a checklist of what you should expect, and if your not getting it… its time to make some changes.
What is the Role of the Accountant?
• Operational – dealing with the day to day financial transactions of the business.
• Strategic – involved in long term investment decisions of the business.
• Advisory – as needed sounding board to bounce ideas off.
You should be able to go to your accountant with ideas, queries, thoughts and opinions. Their job is to advise and assist. Remember- a successful business is a successful client for them so they should be taking an active interest above the mundane details. Starting up a business from scratch is a tricky concept, and many ventures do not make it past the starting line because of certain technicalities. Your service providers are hired to take the weight off the creative centre of your business – you.
Understanding the Needs of Your Growing Business.
Company structures change from year to year, and start-up companies often get bogged down by the legal aspects of the development stage. Your accountant should be on hand to take this burden off your shoulders, so you can get on with growing and prospering. This includes the statutory burdens of increasing legal responsibilities on directors and owner/managers as a company expands, taxation and reporting legislation, as well as the practical needs of real-time accurate financial information on business performance, costing and pricing of products & services, risk and return on incremental growth and investment.
People start up a business because they are passionate about an idea, product or service. Your accountant should take the headache out of your finances so you can focus on that great product and getting it to market.
What can the Accountant do for your Business?
Your accountant should provide you with monthly/quarterly accounts, detailed margin analysis, and comparisons against budgets. Timing is important, some businesses are seasonal and their accounts and budgets will reflect this. As well as these core documents your accountant should provide you with capital investment information, and deal with banks and other lenders on your behalf. And of course, dealing with the revenue and the CRO (company registration office) to ensure the smooth growth of your company.
Start to see your accountant as an integral part of the business, build working relationships with those that have the resources you need and don’t be afraid to question each and every aspect.
Working With Your Accountant
How do you build these functional relationships so you can get the information you need?
Here are the steps you can take:
• Insist on full jargon-free explanations of all financial information no matter how small. There is no point leaving a meeting confused by the terminology, and it is far better to ask your accountant these details rather than admit to a prospective partner that you do not know the lingo!
• Be clear about what the key cost and income drivers are within the business and ask to have a simple financial recording system to monitor these key figures.
• Be willing to keep detailed records of all transactions in the business.
• Be willing to set annual / quarterly targets and monitor progress with your accountants help
• Provide the accountant with accurate stock/WIP figures for management accounts.
Include your accountant in the early stages of the decision making process to avoid later conflicts, and keep the accountant informed of all developments or changes within the business. Accountants know their figures and they know the rules, follow their advice but let them know your end goal and where you want the business to be. If you want an efficient system to continue into the successful growth of your company, invest time and resources now in a full recording systems for your financial information and have your costing and pricing structure reviewed regularly to adjust any changes.
By following these simple steps you and your accountant should be able to work together to ensure the success of your start-up business. An accountant can be a business partner for life; it should be a long-term collaboration so choose the right one for you and get the most from their services.