You need financial advice...why is your accountant oblivious05th February 2020
“But…. Why didn’t my accountant tell me that!?”
My client couldn’t understand it.
He had recently launched a business which was growing quickly.
But while the money was flowing in….
…He had no business experience, and was quite clueless about basic financial matters. (He would be the very first to admit it.)
How to separate personal and professional expenses, how to extract income from his business, how to set aside money for tax….
He was struggling with all of it. And the small accountancy firm he was using didn’t help him at all.
Even though this client is far from typical for us (we specialise in companies turning over £1-£10 million), we sat down together and ran him through some basic financial management concepts, to help him keep his finances in order and start making sense of them.
It only took a few hours….
So – as he so rightfully asked - why had his accountant not done this?
The answer is important because many business owners could use extra financial information and insight to help them run their companies better…
…Including leaders running million-pound companies. (Perhaps you can relate?)
Yet they, too, rarely get the advice they need from their accountants.
That’s why company owners so frequently complain that their accountants are not “proactive” enough.
What they really mean is, “We need help improving our company’s financial position and sorting out basic financial issues, and can’t figure out why our accountant seems oblivious!”
Last week, I gave you one explanation for why this happens. Accountants specialise in looking backwards, to what you’ve done in the past. If you want advice about what to change financially in the future, you need a finance director.
Here’s another answer.
My client’s accountant – and likely, yours – is focused on the traditional financial tasks which are legally necessary for your company.
Doing your VAT return, producing annual accounts and filing with Companies House are the statutory obligations every company must fulfil, by law.
But they don’t add a shred of value to your business.
In fact, these tasks are practically commodities at this point. They can be done by junior staff and every accountant in the world offers them.
That’s why so many accountants charge very little to handle these routine jobs on your behalf…
…Giving them even less incentive to help you out with the financial tasks you are not legally obligated to do, but which will actually drive your business forward!
I’m talking about things like producing management accounts (to help you decide where to develop your business), cashflow projections (which help you stay afloat), budgets (that help you plan ahead), reporting back to your board, helping you make better decisions by weighing the financial implications of your moves, and so on.
These are the things you * should * be doing, as opposed to the things you * must * do.
And they’re certainly the things which larger companies and corporates put their energy into, because they give them a competitive advantage.
But because they are nothing to do with compliance, they’re beyond the purview of the vast majority of accountants.
If you want those things, you need a finance director.
Just drop me a line or give me a call today on 01279 647 447, to discuss how we can help your company grow from £1 million or £2 million to £10 million or more, all by managing your finances to a world-class level.
You will never again have cause to ask, “Why didn’t my accountant tell me that!?”
PS. Here’s an easy test to help you judge whether your accountant is proactive enough.
Do you feel they add significant value to your business?
If the answer is ‘yes’, then that’s fantastic – you’re with the right people.
If the answer is ‘no’ or ‘I’m not sure’, then get in touch today, and let’s talk about how we can help.