In my experience, there are only a few business owners that really fully understand accounts. The majority rely on their inhouse accountant or bookkeeper to explain what’s happening in their business. Some even wait to they get their end of year accounts from their accountant.
But how reliable and timely are these accounts? And what if your gut tells you that something is missing or wrong, what should you do?
Is it time to consider outsourcing the production of management information to an accountant?
Even 5 years ago, outsourcing your accounts wasn’t really the done thing.
Short of having someone come in to collect a bundle of paperwork every week or dialling into your accounts system, there wasn’t an easy way to outsource your accounts.
Most likely businesses would employ an administrator. They would do what they could to keep purchase and sales ledgers up to date until they handed them over to an accountant at year end.
“The trouble with this approach was that it was very backward looking”
Other than keeping an eye on cash in the bank, the most you could do was hope the accountant reported there were profits at the year-end. The worst case scenario was an unexpected tax bill!
Things changed dramatically when cloud bookkeeping made cloud accounting possible
When we look back over those last few years, it’s clear that small and medium businesses now have access to tools which were the preserve of big business. You can send paperwork to your accounts system by hitting forward on an email, or snapping a paper bill with an app (by ‘you’, I mean even I can manage it!). A plethora of reports will be available to you online. Often the challenge is how to make sense of it all.
Making Tax Digital for VAT has been the latest shake-up, and has meant many businesses have had to upgrade their software to newer cloud versions. However for many family-owned and owner-managed enterprises, engaging an accountant still means handing over the books at the year end (even if the books are now online).
Those businesses who choose to outsource to an accountant benefit from a much better understanding of their business.
Too often when businesses ‘could do better’ it’s tempting to chase sales, particularly the ‘next big contract’ or prestigious new customer. However they’re not always the solution to the challenges of low profits or poor cashflow.
When businesses outsource to us, we not only take care of year-end compliance, we actively look at the performance of the business throughout the year. Everything from payment terms and profit margins to job roles. Efficient use of technology means that we can analyse the information more effectively. Businesses can get paid faster too by using the software to chase your money.
There is no one solution out there. It’s all about getting the right mix of locations, people, customers, markets, products, services and technology.
We shake up and sort out, in a way which is difficult for an individual accountant to do
Some business owners do take the leap and choose to employ in-house accountants as their business grows. That can be a big cost to take on and a worry that they fit your business culture.
By outsourcing, our clients get access to a fully trained team. Within our team, we do different jobs (strategy, shake up, sort out, compliance, technology and processes), in a way which is difficult for one individual to do. We are also not employed and someone is always available within a reasonable time even if we have someone on holiday.
Improve profits and cashflow with confidence
One thing we take care to do is build up our clients’ trust and confidence.
We certainly don’t sugar-coat anything. If parts of a business are unsustainable, we’ll say so.
However we’ll also take care to support clients in addressing the issues we identify. We know from their feedback that clients really value this. They say we talk their language and that they are more confident about their accounts and Xero. With the changes we suggest resulting in bigger profits and better cashflow.
Why do we approach accounts differently? It’s our background in business and contracting.
Our practice grew out of a consultancy business which I set up after many years working in industry. This included pricing and reviewing margins, as well as buying, selling, setting up and closing businesses. I’ve personally invested in everything from a pub and garage to a scaffolding business. My colleagues also bring a wide range of business experience from different sectors and markets. That ensures we really do understand many of the challenges faced by owner-managed and family businesses.
If you have a nagging feeling that your business is under-performing, or ‘could do better’, let me know and we can talk.
You can be confident that if I don’t think we can make a difference to your business, I’ll be the first to say so. That means increasing profits and cash, as well as reducing the stress on you and your family.
Whether you’re ready to outsource, or would simply like help to know what to focus on in your business, book our low-cost, fixed fee review:
An earlier version of this article first appeared on LinkedIn.