The 7 Mistakes Made in Choosing an Accountant & How to Avoid Them
- Seeing your accountant as just another service provider.
If you saw them as trusted advisors or a business partner, you would be able to access their tremendous business knowledge for your benefit. If you just want to pay as little as possible for a specific set of services that is exactly what you will get. Too many accountants think price is the leading issue with their clients and do not think about the value they can help build in a business.
Not only is it good to check the value and quality of your current services, it is not good to choose on price alone. A proactive and hands-on accountant has the potential to seriously improve your business.
- Not having your internal systems in good shape.
Poorly trained staff leads to chaotic bookkeeping which results in the accountant spending time sorting out the problem rather than helping you improve your finances. It also leads to higher fees.
If your accountant is suggesting that you should look at improvements in your systems or to get a health-check or a data spring-clean you should either listen to them or get one who will suggest this.
- Looking backwards when you should be looking forwards.
Many companies use their accountants solely to provide historical accounts. While we can often learn valuable lessons by looking back, it’s really not the most effective use of your accountant’s time. It is sometimes called raking over the old leaves.
A results-driven and commercially aware accountant will focus your attention on looking ahead. This will include setting sales and cost targets, defining goals and putting in place structured plans to help your business move forward positively.
Areas you could explore with your accountant may include tax saving strategies, strategic business planning, sales lead qualification, margin improvement, overhead reduction and plans to maximise your profits.
If your accountant doesn’t offer these services to support the financial wellbeing of your business, it could well be beneficial to source a more visionary and strategic firm – one that will be with you every step of the way.
- Missing out on your accountants added-value services
In today’s highly competitive business environment you need far more from your accountant than the basic legal compliance of making sure your accounts are prepared and filed on time. While the compliance services are essential, many business owners miss out on these added-value services for fear of them costing too much or, more likely, not understanding their true value.
With most owner managers and directors focusing their attention on the core business, it’s essential to know that there is someone else on board who will not only watch your back, but will also flag up potential new business opportunities, take advantage of tax breaks as they happen and actively protect the assets of your company, whilst intelligently optimising its wealth.
It’s these qualities that can improve your performance, create tangible results and add measurable value to your bottom line, if this sounds like the sort of support your business could use – and are not getting at the moment – it’s worth carrying out some research to find an accountant with sound commercial intelligence and business acumen who will keep you on the right track for profit.
- Using a firm that is too big for you.
Big name national firms can appear to be the smart choice for a discerning and ambitious business. However, all too often a large firm can suffer from ‘client distance’ issues. You may you end up dealing with different people who do not know you well enough to understand your business and what you want to achieve, it’s unlikely that you will get the best service from them.
Some national firms promote a local presence, when in reality they are merely a regionally branded arm of a nationally focused super-practice. You will often find that a truly local accountant who possesses an in-depth understanding of your area and your competitors is better placed to serve you. And just because an accountant is bigger it doesn’t necessarily mean they can undercut smaller local practices.
Never take anything for granted – it’s always worth shopping around to find an accountant who offers your business exactly what it needs and never gets distracted from your business goals.
- Using a firm that is too small for you.
if you are successful in your chosen business, it’s highly likely that you will have grown since you first started. In all likelihood your needs will have changed significantly as your business evolved. Start-up and smaller companies often require very different services and advice than are needed by larger organisations.
Ask yourself these questions;
– Does your accountant have expertise in your specific sector?
– Can they manage change & control growth?
Of course, some accountancy practices can meet the needs of a wide range of companies, but if you feel that you have outgrown your current accountant, or they don’t possess the portfolio of services your business needs to progress to the next level, it may be time to think about an alternative practice which is better suited to your needs.
- Not having a clear financial plan for your business.
Clear financial planning is a prerequisite for every viable business. Whether you’re facing challenging times or are operating a profitable organisation, every business needs a solid framework of financial planning to guide it smoothly. It’s like having an up-to-date map and a compass when you are planning a trek.
Yet, when you’re busy, it’s all too easy to let this task slip further and further down your ‘to do list”. Even highly successful companies ignore a well thought out financial plan at their peril.
A supportive and proactive accountant will help and encourage you to build a financially robust ‘map’ to guide and protect your business. He can help you use the ‘map’ to build your business and your team while living within your financial resources.
So whether you’re experiencing rapid growth or your profits dry up, you’ll always have up-to-date and informative data at your fingertips to make the right choices when it counts.
If you don’t have access to informative and understandable management accounts to support your day-to-day business decisions, you could be exposing your company to unnecessary risk, dangerous pre-conceptions and decisions made in ignorance.
And if your current accountant hasn’t insisted on their preparation, perhaps it’s time to think about Change.
“Failing to plan is planning to fail!”.