This content was last reviewed in November 2022.
As a business owner, you will have many important relationships that determine the success of your venture – from your customers to your suppliers. Amongst the most important is the relationship with your accountant. More than just someone who ‘looks after the numbers’, a good accountant can add a huge amount of value to your business – providing crucial financial insights to help inform key strategic decisions.
However, the value of an accountant is not always fully maximised. Despite having a detailed understanding of your financial position and operational strengths, many business owners fail to tap into these all-important insights. It’s a missed opportunity. We’re going to look at some of the ways an accountant can add value to your business – and how to maximise the relationship.
1. Treat your accountant as a business partner
Your accountant is so much more than just a number cruncher. Think of them instead as an active partner in your business, someone who can bring invaluable guidance on every decision you take.
With this approach, not only will your business benefit, but you’ll form a much more collaborative and fruitful working relationship with your accountant.
“I expect my clients to do their jobs well – they are the experts at that, and I will do my job well in return,” says Julie Hodgskin of JLH Accounting Services. “They should know I am there to make their lives easier by providing good financial backup. We work as a partnership. I am in effect the financial arm of their business.”
2. Make sure your accountant is the right fit for your business
There are many specialisms when it comes to accounting and some accountants will be better equipped to support your business needs than others. Firstly, you’ll want an accountant with a small business focus. But your needs may also relate to your business life stage. For example, an accountant who specialises in looking after start up businesses could be invaluable in the early years, helping you choose the right structure and setup. Conversely, if your business is established and looking to scale up – you’ll want an accountant who understands the financial implications of this phase.
Knowledge of your sector is also hugely helpful. 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. Establish at the outset how your accountant can support you
A good starting point for a fruitful relationship is to set out a framework for how your accountant can assist you. Your accountant may be able to support you across a wider number of areas than you think. Here are some good questions to ask them to establish how they can provide support:
- How can you help me collate and present paperwork?
- How can you advise me on key business decisions?
- How can you make my life easier?
- How you save me money?
- How can you help me set up the right record keeping system?
- How can you help me organise my time?
- How can you help me build a budget?
- How can you help me forecast cash-flow?
- How can you help me write a business plan?
- How can you help me be compliant?
Having this conversation at the outset will ensure you’re both aligned and setting realistic expectations for the delivery of work.
4. Work together on your business plan
Your business plan – if you have one – should be something you return to on a regular basis to refine. This is another area where your accountant can really add value. Not only do they have a handle on this detail – the company’s financials – but they may also have experience of similar businesses going through the same life stage. 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.
5. Ensure you meet deadlines and compliance obligations
It’s part of an accountant’s job to be fully versed on key financial dates and changes to legislation. However, businesses can be guilty of only getting in touch at the last minute or when there is a problem.
“I have seen potential clients, where I am the first adviser they have spoken to and some of these compliance problems (HRMC and Companies House late filing notices) are why they have decided to (belatedly) take some action,” says Henry Cooper of BirchCooper Accounting Services. “Unfortunately, it is often too late at this stage and the penalties can’t be overturned or cancelled, which will sometimes mean that the business can’t continue as it can’t afford to pay them.”
Whilst that is a drastic scenario, it does underline the importance of working with your accountant to ensure you’re on top of your deadlines and compliance obligations.
6. Help you to organise and streamline your accounting processes
Technology has been a gamechanger in the world of accounting and bookkeeping. A wide range of digital tools are now available to take the pain out of previously time-consuming manual tasks. Forward-thinking accountants will be looking at ways to harness technology – such as accounting software - to work more effectively with their small business clients.
That can only be a good thing for you, but it does require some scoping to ensure you’re aligned with your accountant. They can help you to pick the right software and systems for your business requirements and help to onboard you. Ultimately, this will help your finance function to operate with more efficiency and accuracy.
7. Forecast cash flow and scenario planning
Cash flow forecasting is incredibly important for businesses, now more than ever. It’s all about predicting inflows and outflows of cash in your business and identifying potential joy and pain points.
Your accountant can use the insights and tools at their disposal to prepare reports and make recommendations. Working in this way with your accountant ensures you’re able to build in contingencies into your planning.
8. Raise funding for your short term and long-term plans
Your accountant can advise on funding options based on your business aspirations. 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.
This content was written for FSB by AAT
AAT (Association of Accounting Technicians) is the world’s leading professional body for accounting technicians. They provide a range of qualifications and training options for individuals and businesses looking to bolster finance and accounting skills.