When I present to business groups I often get into trouble with the accountants in the room. I accept that this is my doing as I tend to be quite tough on them, but for good reason – and I make no apology for stirring them up.
To my mind accountants should play a vital role to the entrepreneur; but unfortunately they seldom do.
If entrepreneurship is the future of progressive industry, which I believe it is, then a shift needs to occur in the relationship between the entrepreneur and his accountant because this is one of the most important and enduring alliances he will forge.
There has been much debate amongst entrepreneurs as to the role of an accountant. Most view their services as absolutely essential, some view them as a necessary evil and others feel they are completely overrated and operate as leeches, feeding off the business for their own good. This opinion is possibly being supported by the fact that just in New Zealand, over 75% of accounting firms have gone backwards over the past 12 months in terms of revenue per partner, revenue per full time employee, profit per partner and profitability as a firm. Yet as technology advances, their systems are becoming more efficient, which should automatically raise their profitability.
There are two matters at hand here. The first is that accountants should be lifting their game in tough times if they want to be offering credible, value-added services to clients to do better, and their credibility is strongly linked with how well their own company is doing. The second is that they would do better, in the long term, to function as a “fostering” alliance instead of a draining one. A struggling economy should be a signal for accountants to do better, not worse.
The simple reality is that no business is required legally to employ the services of a qualified accountant (audits aside) but they are required to submit their financial accounts to their Inland Revenue office in a certain format. We have followed one primary rule in our businesses and that is “never come to the attention of the inland revenue services”! For this reason the services of our accountants have always been invaluable in ensuring that we follow requirements at all times; but any accountant can do that.
What makes an accountant valuable to an entrepreneur? In short, one who listens. Lets consider the options for a moment.
In my experience accountants fit primarily into three categories:
The key difference between a compliance accountant, a business coach accountant and a pro-active profit accountant is their own style of thinking.
Whilst the compliance accountant fits the business venture activities into predetermined boxes, and the business coach accountant sells additional pre-packaged boxes, the pro-active profit accountant fits the boxes around the business venture in the appropriate manner at the appropriate time. They are mindful of the affordability and necessity of their services and they are careful to lay a supportive foundation for the entrepreneur where nasty surprises are kept to a minimum during the financial year.
Just how does an entrepreneur find a pro-active profit type accountant?
I have prepared a list of questions and areas for consideration that are very helpful to either identifying a pro-active profit accountant or assisting them to work with you in this way. If you would like this list please email me at [email protected]