10 ways the right accountant adds value to your business

Blogs 18 Nov 2019

Nick Green of Unbiased.co.uk on why you should choose your accountant with care.

No-one needs reminding how useful an accountant is. Few CEOs have the time or appetite to handle the accounts themselves, and any good business plan needs solid financials too. Yes, you know an accountant is a must-have. What you may not appreciate is how much difference it can make to choose the right one.

What many entrepreneurs miss (bearing in mind nearly 60 per cent of start-up directors have never run a business before) is the fact that accounting isn’t just a chore. In practice, your accounting function should fit like a glove, touching everything that the business touches. That means choosing your accountant with great care, to ensure that what they offer is made to measure.

When a business can achieve that kind of fit, accounting is transformed from a routine task to a fundamental lever of your business. Here’s how the right accountant makes that happen.

Last but not least, the accountant who really ‘gets’ your business is the ideal companion to keep close. When you know they are covering the money side of things, and will caution you if you go too far, you can free yourself to think big and aim for goals that might have seemed too ambitious. Ultimately, the confidence that a well-matched accountant can bring is an asset in itself.

  1. Specialising in your business’s life stage

    As a small business, it’s only common sense to choose an accountant with a small business focus. However, your stage of development matters too. For example, an accountant may have worked with many long-established small businesses, but have less experience in the turbulent world of startups. Each phase of business growth puts its own particular strains on the company accounts, so you need someone who knows what to expect and how to respond. You may be encountering this phase for the first time – your accountant should not be.

  2. Knowledge of your sector

    Statements of Recommend Practice (SORPs) vary considerably from sector to sector, with specific guidance in place for different types of enterprise such as education, healthcare, legal firms, rural businesses, the property industry, football clubs, the film industry and many more. But there’s more to sector knowledge than specialised accounting practices. Small businesses in the same sector will tend to face comparable challenges in terms of overheads, cash flow, regulation and growth, and may have similar deductible expenses and allowances. If your accountant is in familiar territory, they will have that ‘home advantage’.

  3. The right accounting specialisms

    When choosing your accountant, consider the real pain points in your accounts. For example, your business may face especially complex VAT issues, or have a lot of depreciating capital assets, or intangibles (licences, patents, trademarks etc.) that must be accounted for. You may conduct large amounts of research & development (R&D), in which case a specialist can help you find the right tax credit scheme and make successful claims. Or you may need detailed cash flow models to support your growth plans. A little extra skill in a few key areas can really pay off.

  4. Finding grants, allowances and reliefs

    There are many government grants available to UK small businesses, often targeting highly specific criteria (e.g. specific regions, new employers, eco-friendly businesses). There are also government-run venture capital schemes such as the EIS, SEIS and SITR, which help SMEs raise funds for growth. Added to these are a range of tax allowances and reliefs that can reduce your tax bill. Identifying all these opportunities and accounting for them is another useful area of experience.

  5. Accounting that suits the pace of your business

    Some small businesses are tortoises, slow but steady, while others may be hares – sprinting at the next big growth opportunity – and many fall somewhere in between. The pace and rhythm of a business will be reflected in the books, so the accountant must be in step with it. For instance, if profits fluctuate throughout the year then cash flow can become an issue, while if the business goes through loss-making stages (common in startups) then an accountant must be confident riding these waves. The nature of the business’s income is also relevant: is the main source of revenue a core of existing, long-term clients, or does it depend on chasing new contracts? ‘Feast or famine’ finances can rattle some accountants, so make sure yours is happy working to the unique pulse of your business.

  6. Being the right size

    Is your business the right size for this accounting firm? If you’re smaller than most of their clients then you may end up with one of their most junior staff, while paying a premium for a larger firm. Conversely, if you’re the star client then you can expect star treatment – but do they have the depth of experience you need? As a rule of thumb, aim to be one of the mid-sized fish in the pond.

  7. Raising funding for growth

    If a growth phase is on the cards now or in the near future, you’ll want someone with fundraising experience. Whether in the form of gearing (bank loans), private equity or even crowdfunding, raising capital is a multi-stage process to which accounting holds the key. As a minimum, funders will want to see solid accounts they can trust, with figures that point to their money being returned in good time. Besides getting your accounts match-fit, an experienced accountant can help you identify the most promising sources of funding and will advise on your options.

  8. Taking a ‘big picture’ approach

    You can often spot a well-matched accountant by the interest they show in your business. This accountant sees the real day-to-day business behind the numbers and delights in showing you how one relates to the other. They’ll talk shop, discussing things that may seem quite off-topic for them, and seek constant updates on what’s going well or not so well. What they’re doing is relating your experience on the ground to the figures they’re seeing, working out the connections and thinking up creative solutions. When you can’t see the wood for the trees, this accountant gives you a bird’s eye view.

  9. Enhancing your business plan

    Business plans get made when you first work out how to make a profit through your business. Consequently, most begin as broad strokes and are later refined into greater detail. This is where your accountant can pitch in. Not only do they have a handle on this detail – the company’s financials – but they may also have experience of similar businesses at later growth stages. This can result in useful insights into long-term direction and the steps required. Even if you’d prefer them to take a back seat, your accountant can still rigorously test each part of your business plan to ensure that it is financially sound.

  10. Being your right-hand person
    Last but not least, the accountant who really ‘gets’ your business is the ideal companion to keep close. When you know they are covering the money side of things, and will caution you if you go too far, you can free yourself to think big and aim for goals that might have seemed too ambitious. Ultimately, the confidence that a well-matched accountant can bring is an asset in itself.

Nick Green is a financial journalist who writes for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years.