What do you expect from an accountant!

The world of accountancy is changing quickly and the days of the dull lion tamer are running out fast

We aren’t all as extreme as the ‘The Accountant 2016’, we definitely don’t work for criminal gangs!

This is the image that I think a modern accountant should have, someone who can solve your problems

There are 2 key reasons why small businesses expect more from their accountant.

1. In recent years we have seen a huge growth in Cloud Accounting Systems such as Sage One and Xero and automation of payments and bank feeds, its no longer enough for accountants just to provide book keeping or year end accounts and tax.
2. Business owners want personalised, tailored partnerships with their accountant who need to be true business experts

As Paul Surtees MD of Capitalise says…

Rather than simply easing their professional burden, leading accountants are using technology to go beyond their core proficiency and provide value-added services to their clients.

“Technology is shaping the future of the profession”

This is particularly pertinent to those practitioners with SME clients, where technology is really shaping the future of the profession.

Previously technology had simply increased efficiency and decreased the margin of error.  Now, however, rather than just creating more time in the day to concentrate on value-add services, technology is also helping to actually deliver these new service areas.

For example, accountants are taking on the challenge of SME finance and using online funding comparison services to offer advice and funding matches for clients.

Not only do online marketplaces make it easier to find finance, they also allow accountants to give more thorough counsel on a full range of choices, from indepencent to alternative sources.

Suddenly a business, that would have otherwise just gone to their bank, is now turning to their accountant for advice on suitable peer-to-peer lending platforms.

Another great example of this shift is the use of collaborative software.  As accountants become more like an ‘acting CFO’ for a SME, so too must they become more integrated into the business.

“Changes are being made in real time”

The use of collaborative software allows accountants, and SME owners, joint access to the likes of balance sheets and sales pipelines, for example.  Not only does this allow changes to be made in real time, it also increases transparency for both parties.

Many businesses require the skills of professionals to oversee and direct financial operations. These professionals are referred to CFOs, chief financial officers, or financial directors (FD).

So what should your Chief Financial Officer be doing for your business…..

1. The CFO should be able to look into to future to see what the future financial needs of the business will be
2. He/She should negotiate funding facilities to ensure the business can manage its cash flow needs
3. The CFO should be able to foresee the future tax consequences and risks of decisions
4. He/She should help the business to achieve the best possible credit scores
5. Identify ways to reduce costs and improve profitability
6. Understand the business owners objective and focus the business on achieving those objectives
7. Ensure financial and regulatory compliance
8. Ensure accurate and timely reporting of management information
9. Evaluate growth opportunities
10. Apply corporate governance

What key questions should you regularly ask your CFO…..

1. What is our cash cycle and how can we improve it – Cash Cycle Blog
2. What Key Performance Indicators should we use and what are they telling us – KPI Blog
3. How can we improve profitability – 15 ways to improve profitability Blog
4. What is our Business Plan and is it the right plan – Business Plan Blog
5. Can we reduce Overheads – 10 creative ways to reduce overheads Blog

Many smaller businesses and SME’s can’t afford a Full Time (or even in some cases a Part Time CFO or FD) but they need help with:

• Business Plans
• Budgeting and Forecasting
• Cash Flow Management
• Buy or Rent decisions
• Capital Investment Appraisal
• Accounting Procedures and Systems
• Business Strategy
• Busines Funding and Investment
• KPI’s

Virtual FD’s fill this gap because:

1. You only pay for what you need
2. There is no employment contract
3. It provides access to higher level of expertise (in theory)

But be careful who you choose. There is no law preventing anyone from calling themselves an accountant, and that as a result small businesses could be unknowingly paying someone without the necessary skills to handle their finances and help their business grow, who isn’t regulated or insured against risk.

So what experience does your accountant have to show that they have the skills to be your Virtual FD?

I am sure that in theory they have the technical skills but is that enough?

With the exception of CGMA (CIMA) accountants many accountants in practice have never worked in business let alone been a Finance Director!

The ACCA issued a warning back in 2014 after research from cloud accounting software provider ClearBooks showed just 8 per cent of small businesses considered an accountant’s qualifications when choosing one.

CIMA (Chartered Institute of Management Accountants) Members in Practice are monitored by CIMA for:

1. Continuous Professional Development
2. Anti Money Laundering Compliance
3. Professional Indemnity Insurance
4. Continuity Agreements
5. Letters of engagement
6. Ethical conduct

CIMA operates a Masters degree standard scheme of qualifying examinations for prospective members. It is active in promoting local education, training and management development operations, the promotion of new techniques through its research foundation and the dissemination of management accounting practices through publications and other media related activities. WIKIPEDIA

So what do you expect from your accountant!

steve@bicknells.net