Having worked for the past 27 years with many different businesses, all at different stages in their development, we have some relevant experience to share with you as to how you can make the most of your relationship with your accountant.

Unfortunately, it is true to say that many business people see their accountant as someone who turns up once a year to carry out the annual audit, or someone who only appears when there is a problem or money to be paid out. In these circumstances the relationship is not exactly a warm one, and is certainly not very beneficial to the growth of the business.

On the other hand, there are people who have included their accountant as a key part of the decision making function in their business and these are the businesses that tend to survive and grow steadily.

So how can you make your relationship with your accountant contribute more to the long-term growth of your business?

First we need to look at what is the role of the accountant within the business, and to identify the relationship between the accountant and the business. It is very important to know what stage of development the business is in, as this has a major impact on the level of input required from an accountant. Ultimately, to make the most use of the relationship the business has with its accountant, the client needs to work pro-actively with the accountant as they move forward.

So, what role do accountants have within businesses? Like any other management function, accountants have both an operational role, in terms of the daily financial transactions of the business, and a strategic role, where they are involved in the long term investment decisions of the business. There is also an advisory role, where they are used as a sounding board for new ideas.

What relationship do businesses have with their accountant? Do they just have an external auditor who, once a year, carries out the statutory audit and compliance function for the business, perhaps with little or no interim financial information? Is there an internal financial controller or accountant? Or does the business have an external accountant who provides management information and performs the year end audit? Any business that does not have access to either internal or ongoing external financial expertise is dramatically increasing the chances of business failure.

In terms of making the most of the business’s relationship with the accountant it is important to understand what the business needs from its accountant. Firstly, there is the statutory burden on Directors and owner-managers in terms of complying with the ever increasing reporting and taxation deadlines. But there is also the practical need for up to the minute accurate financial information on how the business is performing, how the costing and pricing structure within the business is operating, and the ability to look at risk and return on growth related investment.

So, what can the accountant do for the business? Whether internal or external, the accountant should provide monthly or quarterly management accounts with comparisons against budgets. There should be active budgeting and financial planning carried out each year, and I don’t just mean taking last year’s figures and adding on a percentage across the board. The accountant will help in dealing with the business’s banks and other lenders, and in dealing with the Revenue / CRO . All capital investment decisions should have sound financial workings carried out so that decisions are not made in a vacuum.

To help you make the most of your relationship with your accountant, we encourage you to include the accountant at an early stage in the decision making process. We encourage you to invest the time and resources in putting in place a full recording system for the financial transactions of the business, and then to have the accountant produce management accounts, no matter how simple or complex. Insist that the costing and pricing structures within the business are regularly examined to adjust for changes in the market. Most of all, we encourage you to recognise that decisions made without at least having knowledge of all the financial implications, more often than not tend to be bad decisions.

How to Get The Most From Your Accountant

What is the Role of the Accountant

  • Operational – dealing with the day to day financial transactions of the business
  • Strategic – involved in long term investment decisions of the business
  • Advisory – as needed sounding board to bounce ideas off

Understand the Needs of Your Growing Business

  • The Statutory Burdens – increasing legal responsibilities on Directors and owner-managers regarding compliance with taxation and reporting legislation
  • The Practical Needs – Real-time accurate financial information on business performance, costing and pricing of products & services, risk and return on incremental growth & investment

What can the Accountant do for Your Business

  • Provide monthly / quarterly management accounts, detailed margin analysis, comparisons against budget
  • Budgeting and financial planning
  • Capital investment information
  • Dealing with banks & other lenders
  • Dealing with Revenue/CRO

Working With Your Accountant

  • Insist on full jargon-free explanations of all financial information
  • Be clear about what the key cost and income drivers are within the business and ask to have a simple financial recording system to monitor these key figures
  • Be willing to keep detailed records of all transactions in the business
  • Keep the accountant informed of all developments or changes within the business
  • Be willing to set annual / quarterly targets and monitor progress
  • Provide the accountant with accurate stock/WIP figures for management accounts
  • Include the accountant at an early stage in the decision making process
  • Invest time & resources in a full recording system for financial information
  • Have management accounts produced
  • Have costing & pricing structure reviewed regularly to adjust for changes