Don't believe these 3 myths

25th May 2022

Last week I mentioned I’ve always had an interest in the Tudors.

I’ve learned an enormous amount about them...

...And I’ve also discovered that some of the things I believed for many years are absolutely untrue!

For example, Walter Raleigh didn’t introduce tobacco to the UK in 1586 - a fun fact I had learned as a child...

It turns out that British sailors had adopted the habit more than two decades earlier.

I also discovered that the common picture of Henry VIII as a huge, bloated man is extremely misleading. For most of his life he was considered handsome and athletic. It was only after a jousting accident which injured his leg that his health - and appearance - declined.

In short, Tudor history is full of myths...

...Which made me think of some of the legends which have taken root about my own industry, accounting.

Here are 3 beliefs which company owners commonly hold... But which are absolutely untrue:

1. “You can’t find a proactive accountant.” MYTH!

“Regular” accountants look at how your business has performed in the past. They prepare last year’s accounts, file last year’s tax return and balance last quarter’s books. If they work in-house, they chase last month’s invoices. That’s why they’re not proactive - they’re constantly looking backwards.

Finance Directors like me are also accountants but we have different duties... ...Our job is to take all that information generated by the “other” accountants and use it to help you make better decisions for the future. So if you think of “proactive accountants” as “finance directors,” you’ll be able to find exactly what you’re looking for.

2. “We need to manage our finances in-house. If we outsource our financial management, we’ll lose control.” ANOTHER MYTH!

If the people managing your finances in-house aren’t senior enough or competent enough, your finances will end up messy.

And if you have no idea whether your numbers are accurate, or whether you can afford a big purchase next month or whether you’re saving enough for tax, you’re not in control...

...Even if your bookkeeper or accountant is working right next to you.

On the other hand, you can outsource your financial management to an external team who come with enormous experience and turnkey financial processes and systems that keep your finances running smoothly.

They also give you reliable, timely financial information and help you make financial decisions with confidence. That’s true control - even if they’re not physically located in your office!

3. “Now that we’re bigger, our company needs more accounting support.”

OK, this one is partially true.

As you grow beyond £1 million or £2 million turnover there are certainly going to be a lot more transactions to process, bigger payroll and so on.

But it’s also a bit of a myth, because what companies passing this financial threshold need is DIFFERENT accounting, not (just) more of it.

As you face more complex decisions, you need financial information which smaller companies normally don’t.

I’m talking about monthly management accounts, which give you tailored, timely information about how you’re doing... And cash flow reports which ensure you never run out of money...

You also need lots of systems and processes to help you smoothly manage those larger volumes of transactions and payroll.

And you may need advice on issues which never arose when you were smaller, like how to invest your profits, how to arrange loans or how to deal with your bank manager.

That’s why most companies worry (rightly) that they’ve outgrown their accountant as they start turning over £1 million +.

They’re still getting the same accounting services they had when they were a £300,000 business... And that’s no longer appropriate!

Here at Insight Associates, we help companies around that size take a much more proactive approach to their finances, giving you all the information you need to maximise your profitability and growth - and helping you make brilliant financial decisions for your future.

Although our Outsourced Finance Department is based in Essex, we become an integral part of every company we work with, and help you feel in complete control of your business’s finances at all times.

The financial systems and processes we implement in your business are taken by corporates for granted, but we want to help you benefit from them even when you’re much smaller. Good financial management is a competitive advantage!

If that’s the kind of financial management you’re ready for, get in touch with me today.

Simply email or call us on 01279 647 447, and let’s arrange a time to talk.

Warmly,

Garry


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