In a recent post (HERE) we looked at a Guardian Small Business article on choosing your accountant, and explained why Aiteo Consulting simply must have been in the author’s mind as she wrote.
Now, if there is any truth to the chorus of complaint which often follows the words ‘I tried to speak to my accountant and…’, we might have to admit that in most minds, value and accounting services go together like blood and stones.
So a recent article, published in the same august organ (HERE – if you must – but do wait until the end if you can), begins to grapple with the thorny question of getting value for money from your accounting services.
Now, before launching into our analysis, we would like to say this. When a major accounting firm launches a new nationwide service targeted to small business, and the Head of the aforesaid service manages to write a clear problem statement for a national daily without it in any way coming across as an advertorial, we can only applaud. If you do look carefully, you’ll see that the author is indeed Head of Small Business Accounting for … well you can read the article to find out. After all they haven’t paid us to advertise on here!
Credit where it’s due though, and we believe the article represents an excellent contribution to the debate about value. So let’s take a look at some of these themes.
Entrepreneurs often pitch their businesses without knowing basic financial information.
To be fair, an evening in watching Dragons’ Den wouldn’t be half as much fun without the ritual slaying of the hapless entrepreneur who claims their gross margin will be EVEN HIGHER than their turnover, would it? Almost unforgivably, some have even been known to forget to budget for their accounting fees!
And while some poor souls are undoubtedly selected for entertainment value in the drive for ratings, the observation often remains true. And traditional accounting services are not adapted to help start-up businesses to grow. Such services might give you comfort about the ‘distress’ elements of running a limited company – your annual return, the corporation tax return, the VAT, the incomprehensible and uninformative annual accounts… and depending on the size and complexity of your business, you’ll be lucky to get this and much change out of a cool grand or two.
So what needs to change?
Your accountant should be central to your business, they should be taking care of all the numbers, not just profit and turnover, absolutely every single last penny. Cashflow, management reports, data entry for receipts, VAT returns, invoices, POs (purchase orders) – you name it, it’s your accountant’s responsibility.
And we agree. We agree that you should expect more.
What is described here is a comprehensive service which we at Aiteo dub our ‘Accounting’ and ‘Finance’ streams – core compliance matters dealt with, and extra insights on top accessible via a dedicated business partner. So far so good. What we do say is that when you get quotes for these services, check carefully what is included and excluded from your quote. Here’s a starter for 10 to help you:
- Book-keeping? Do I have to do it or does the accountant do it? (Surprised? Did you think that was the first thing you were paying for? Well not necessarily. Book-keeping activity is often a separate chargeable service.)
- What tools are provided? Do you get market leading cloud software – such as Xero? <wink wink>
- How are bills and expenses processed? Do you have to input them manually, or does your accountant offer you market-leading software such as Receipt Bank which reads and processes your bills without your intervention? <wink wink wink>
- I’ve bought some expensive computer equipment. How do I deal with that? Does my accountant tell me how to account for it? How to claim tax allowances on it? Is that an extra?
- How do I access my finance partner, and how often? Is there a ‘fair usage’ limit?
- Are there limits to transaction processing? Fifty invoices a month? A hundred? A thousand? Five? (All of the preceding are possible variations.)
- Do I get payroll services? For how many staff?
- What about directors’ dividend vouchers? How many do I get each year before I pay extra?
- Do I get a mailing address?
- Do I get personal tax (such as for the founder shareholders) included? Or is that an extra?
Not an exhaustive list, but do carefully review all of these, because they do vary. There isn’t a single right answer to whether they’ll be in or out, and, within reason, you might be able to ask for your particular needs to be accommodated in a tailored quote. However, let’s be honest here: all accounting firms will be still be delivering to certain service categories, and you might get a choice between two or three plans which mean some compromise somewhere. If you want a very tailored service, as with all things in life, there will be a cost involved in tailoring it to you.
If your accountant isn’t playing the role of financial director, you’re simply not getting the service you’re paying for. They should be able to offer expert advice. And – at the risk of repeating myself – at no extra fee.
A finance director. YES PLEASE. And at no extra fee!
No extra fee…
Hmmm… well yeeeesss… if the fee for that service is already built into your quote, and you’re effectively paying a monthly retainer from which you can draw down. And we have no problem with that model – we use it ourselves.
But let’s be transparent. Do you want advisory services, like a Virtual CFO in your pocket? That will involve the time and input of a highly skilled and qualified service provider, delivering value to agreed outputs, and it will cost you X. But what if you’re not there yet, and you only want what we term ‘accounting’ and ‘finance’ services? Good news! That’ll cost you X minus Y.
The key thing to us is transparency, so let’s have that conversation very clearly, because if you’ve signed up for X minus Y, and are paying X minus Y, but are expecting X in return, then something approximating to a disappointed customer will result. And no-one here wants that outcome.
So if you want a virtual CFO – as well as the basic accounting and finance services – then you need to be thinking about value. So we need a talk. THE talk.
We need to talk about VALUE.
Now when a professional accountant pitches to you and says they will give you a value service, you can see it already: the country pile in Surrey, the sports cars, the cocktails on the beach …
Theirs, of course. Not yours. Value’s a one way street isn’t it?
Well, as used to happen in every good 1980s TV serial, you’ve reached the cliff-hanger. We’ve left you, dear viewer, frustrated yet very excited. You’re going to go away and talk to all your friends about what value might mean in accounting services, and then you’re going to come back next week to see if our hypothetical customer lives to recruit her Virtual CFO from Aiteo Consulting.
And, unfortunately, this is not a pre-filmed box set allowing you to click straight through to the next instalment while skipping the ads, so you will have to wait until next week.
Meanwhile, if we’ve piqued your interest, please take a look at our Professional and Enterprise offerings HERE. And just so that you don’t miss the next instalment, sign up to our mailing list up over there top right, and we’ll promise we’ll mail you infrequently with only very interesting content, or your money back.