Virtual FD Archives

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

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

So what are accountants doing differently?

The Virtual FD

Half the firms entering the Practice Excellence Awards this year (PEA15) offer management information as part of their service for business clients – up from 33% in 2014. One reason for this jump is that the approach has been shown to have a very beneficial effect on client satisfaction and practice profitability. Probably because it serves a fundamental client need.

Many smaller businesses and SME’s can’t afford a Full Time (or even in some cases a Part Time 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
Business Funding and Investment
KPI’s

Virtual FD’s fill this gap because:

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

But here is the key question you should ask your accountant – Have you actually ever worked in business or been an FD?

It seems bizarre to me that so many accountants offer this service and yet have no experience as an actual FD

Weekly Management Reports

Accounting Web reports…

While many practices are becoming the finance team that puts together monthly reporting packs for company managers, Receipt Bank founder and CEO Alexis Prenn argues that monthly management accounts are not the future of accountancy. Cloud technology has changed the dynamic of accounting so much that advisers should be thinking more creatively about what they could do with this information.

What if accountants and businesses could get their hands on transactional data even more quickly and efficiently? Why not produce weekly management accounts?

In a scenario that is familiar to accountants on the Australian accounting conference circuit, specialist bookkeepers are now doing this for Antipodean coffee houses and eateries. “Cafés can run up costs very quickly – if you have three unprofitable weeks, you’re sunk. With online tools and transaction capture, the café can close its books on Sunday and get the weekly management accounts by Tuesday,” Prenn said.

I can see this being of great value in some businesses and cost effective with cloud accounting.

Business Planning and Forecasting

Sage suggest…

steve@bicknells.net

If you search the internet you will find that almost every accounting practice now offers to be your Virtual FD. Compliance work on year end accounts and tax returns has become highly competitive and accountants feel they should provide additional services.

Many smaller businesses and SME’s can’t afford a Full Time (or even in some cases a Part Time 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:

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

In May this year the ACCA issued a warning after research from cloud accounting software provider ClearBooks showed just 8 per cent of small businesses considered an accountant’s qualifications when choosing one. 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.

Although some unqualified accountants may do good work, an unqualified accountant is not answerable to any regulatory body and so cannot be disciplined. They have not passed exams that would have tested their knowledge, they are not subjected to any ongoing inspection of their practices and processes, and, crucially, they are not obliged to participate in any ongoing training to keep them up to date with ever changing legislation. Many may not even have any professional indemnity insurance, which clients can turn to if their qualified accountant makes a mistake.

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 CIMA accountants many accountants in practice have never worked in business let alone been a Finance Director!

I happen to think that time served experience as an FD does make a difference because it greatly improves your insight and skills.

Would you get on a plane with a Pilot who in theory knew how to fly but had never actually piloted a plane before?

When you choose a Virtual FD you are trusting them with the success of your business. Choose wisely!

steve@bicknells.net