One thing I consistently hear from business owners is, “Why don’t I understand my accountant?” It’s often the polite question that otherwise translates into “What am I really paying my accountant for?” I frequently see accountants struggling to sell services that they feel would help their clients. Yet few business owners understand what they need in terms of effective business support. That makes the relationship hard work. It’s also expensive – wasted time, wasted money, wasted effort on both sides. What if you could get better support from your existing accountant?
The challenge, as a business owner, is asking the right questions and, more importantly, having your business needs understood. Business owners don’t know what accountants can do for them; accountants aren’t great at communicating how they can help businesses. Which means everyone is missing out. My own clients often bemoan that their accountant doesn’t understand their business and they don’t understand what their accountant and admit that makes them feel stupid or confused. If your accountant confuses you, you lose. Here’s a first step to winning and developing a better relationship with your accountant.
For many of the 5.4m UK business owners who cannot get their heads around their company finance, the challenge is finding the time to learn. It is one of the most crucial elements of running a successful business, no matter what size or shape. Especially if they are involved in the day to day running of the organisation too. Every day there are the distractions, firefighting problems and keeping the operations going. It’s easier to stay in the comfort zone of what you know. I wrote my first book “5-Minute Finance – A Business Owners Guide to Understanding Your Numbers” for a single client to help him get to grips with his numbers AND have a better relationship with his accountant.
Key elements the book focuses on is being time–friendly and accessible to people who do not have the background in accountancy training or an MBA. It translates the language of finance and takes anyone in a business through some of the basic elements of business accounting, explaining what the words mean and how to use them – from profit margins to cash flow and how to understand financial reports. It gives the reader more confidence with their understanding of their business numbers.
And it works – one client tripled his turnover in 3 years, focused on margin rather than revenue and mastered cashflow management. He also has a new accountant who he can have meaningful conversations with about all aspects of his business. The main gain is he has a depth of understanding of his numbers and data, enabling him to make more effective and timely decisions.
THE BIG QUESTIONS
Many business owners don’t see the value of value added services from their accountant rather than just compliance requirements because accountants are not great at communicating in a way that is easily understood. The big barrier is usually something referred to as “the curse of knowledge”. As an expert in their field, accountants can score 10/10 – their clients operate at 0/10 up to about 4 or 5/10. Bringing yourself to the higher level of knowledge doesn’t have to be hard – but the most successful business owners put some effort into learning their numbers.
The first step is finding out just where on the knowledge scale you are. Ask yourself (and your team) “How much to do you understand the numbers in your business?”
It doesn’t matter what the answer is, you can get help from wherever you are to get a better understanding. When I talk to my clients, I always ask about their accountant using the following checklist. How well would your accountant score on this?
Some Questions Your Accountant Should be Asking You:
- Are you paying too much tax? If yes, how much and why?
- Can you get a refund of any of the tax you’ve overpaid?
- Are you up to date with legal compliance? If not, how can I get up to date?
- How are your profit levels compared to other businesses your size?
- How’s your cashflow going? (How do you know?)
- Tell me about your business numbers – and what they mean?
- What is your business worth?
- How do you pay yourself?
- Are you on track to achieve your business and personal goals? (And what are these?)
As I always say to clients, if your accountant isn’t delivering, then YOUR big question is “What’s involved in changing accountants and getting the right support and answers?”
When you engage with your accountant at this level, you’ll have a richer, deeper relationship. You’ll also be better placed to have the next level conversations with them about the future. That’s going to be more interesting and value added for you and you’ll get more. From. Your accountant.
Christine Nicholson is an author of 4 business books, speaker, and multi-award-winning Professional Business Mentor (who happens to be a non-practising accountant). She was a global Top 50 Women in Accounting for 2020 for my work with finance teams. She’s been on BBC talking about business. She’s been helping businesses for over 30 years – along the way she’s worked with every type of business from software companies to taking over the running of a zoo.
Are you stuck in the day-to-day of your business with no time to plan for the future? A Professional Business Mentor is just the leverage you need to get out of the rut and flying. Discover how you can make your business worth more AND avoid leaving money on the table when you finally leave your business. Click here to contact Christine by email alternatively, you can book a call with the Business Mentor of the Year 2020, author and speaker. Who helps business founders get their businesses exit ready so they can enjoy a happier, richer future. She saves them THOUSANDS and increases the value of their businesses by MILLIONS.