Why traditional accounting models are failing businesses
A few weeks ago I asked you to share any difficult dealings you’ve had with your accountants.
Amongst the horror stories I received, one stood out as particularly shocking…
I’ll let ‘Ethan’ tell the story himself:
“We once received a County Court judgement for non-payment of an invoice. The first I knew of it was after it had been issued and I, as the director, was being contacted to make payment of the outstanding debt and the costs.
“I immediately queried why this was the first I had heard about it and was told all the papers had been served to the company’s registered office. This was at our former accountants who originally set up the business for us when we started, and filed our accounts etc.
“I then queried who had made the claim and been awarded judgement against us because I was unaware of any outstanding debts and was shocked to find out it was OUR ACCOUNTANT.
“The debt was paid, the County Court Judgement satisfied and the accountant changed.”
Can you imagine!?!?
It’s horrific, but to me it’s not completely surprising.
This is fundamentally about relationships. And unfortunately, many traditional accountants don’t have a close relationship with their clients.
They contact them a couple of times a year in order to get their accounts and taxes done. They may never have met them personally, certainly not after securing their business, or even had an in-depth conversation. It’s unlikely they understand much about the company, the market in which they operate or their goals and challenges.
In fact, they hardly know them.
Of course, this doesn’t usually have adverse results. Most accountants are honourable people!
But when you’re just a name on a sheet, it’s easier for miscommunications to occur, to do the minimum necessary…
…and to treat your clients poorly, for example by taking them to court and then not forwarding the correspondence (!).
The reason this happens is clear. Accountants that operate according to a traditional model have an incentive to build up a very large client base, but do comparatively little for them. Annual accounts and taxes, their core work, are technical tasks that involve looking backwards, at what happened in the past; they do not require deep familiarity with the business.
At Insight Associates, our operating model is different.
We have a small number of clients with whom we work very intensely. We take a hands-on approach to managing your finances, speaking to most clients on an almost daily basis in order to ensure your invoices are processed, your payments are made and that everything is in order and correct.
Through this work and through our onboarding process, we get to know your business intimately. This allows us to add a huge amount of value, helping the business owners and senior team understand your financial position and make better financial decisions for the future.
And we provide all the financial insights necessary to do this, from monthly management accounts to cashflow forecasts. This is about helping businesses understand what’s coming up over the horizon – not just understand what happened six months or a year ago.
Although we are an outsourced finance department, our clients typically regard us as part of their in-house team. Close relationships are at the core of what we do – it’s what makes it possible for us to add so much value.
Imagine having a finance department that works closely with you, providing daily support and insights to guide your financial decisions. That’s what we offer at Insight Associates. Our intimate knowledge of your business enables us to anticipate needs, prevent issues, and drive growth.
Don’t settle for a distant relationship with your financial advisor. Experience the difference of working with a team that knows you well and truly cares about your success.
Reach out today to schedule a consultation and discover how Insight Associates can transform your financial management experience. Simply email us or call us on 01279 647447 to find out more.
Warmly,
Garry
