Accountancy is an essential tool in the small business arsenal. Without good financial practice, the foundations of a stable brand simply cannot be built. While some microbusinesses may opt to manage their own finances, many larger firms require support from experts as their economic structure becomes more complicated. From managing payments to dealing with government obligations and taxation, accountants can provide a backbone on which the rest of a business is supported.
But choosing an accountant is a more important task than you might have previously thought.
Similar to all facets of the modern business operation, opting for the right person or firm for the job is essential for developing the best opportunities. This is because accountants have specialties with particular skills, strengths and weaknesses. They have unique experiences and varied qualifications/accreditations. While many may offer the same basic services, it is how they offer these services – along with the special knowledge they have – that is so important to achieving your business's specific development goals.
This leads to an important question: How do you choose the right accountant for your business? The answer is simple and comes in two stages.
Stage 1: Understand your own business needs.
You can't choose the right accountant for your business if you don't understand both your financial and growth needs.
Consider that your accountant is like a piece of sports equipment. You wouldn't invest in a tennis racket without first considering things like grip size, weight, strings type and durability, for example. What are these based on? Your needs as a player and an individual.
So how do you identify the core needs of your business as they relate to accountancy? Well, start by thinking about the basics:
- What does your business do?
- What industry does it operate in?
- What is the turnover?
- How many people do you employ?
- How many clients/customers do you work with?
- How much can you afford to spend on an accountant?
To give you a sense of what I mean, here's an example.
Suppose you manage a digital marketing firm with a $200,000 turnover employing three people, with a client roster of 15 firms, earning enough money to pay for outsourced accountancy support. Now that we know the basics, we need to think about the financial tasks involved in the business. What are the most important elements of accountancy you need managed?
Our make-believe firm might have a lot of clients, but with relatively few employees and only a short list of suppliers, it doesn't need much help on things like payroll or third-party expense monitoring. What would be important?
- Managing client invoices
- Paying taxes
- Balancing the books
Of course, your financial needs will vary, and our example firm may need other support but to a lesser extent. However, by carefully thinking about what kind of tasks will be a priority for your accountant, you can start to understand what your business really needs from a finance expert.
Finally, think about tasks that aren't directly related to financial management but are more about economic and business growth. Accountants can support profitability in other ways – they aren't just bean counters who keep finances under control. They can also offer services like these:
- Company audits to address inconsistencies and identify overpayments
- Consultancy on growth and support in making financial decisions
- Building forecasts and projections for investors
- Establishment of businesses and development of new ventures
Going back to the example business, let's say our digital marketing firm is looking for support in reaching their growth target of $500,000 annual turnover. To do this, they'll need advice and help to build projections for investment opportunities.
Once we've thought about this, we can move on to the next step of choosing the right accountant.
Stage 2: Understand what kind of accountant you need.
By taking the time to understand our businesses goals and needs as they relate to financial management and growth, we can start to paint a picture of what kind of accountant we actually need.
In our example, we're a small business that needs support from an accountancy firm familiar with digital marketing that can help us manage our internal finances, while also offering advice on what we can do to improve our bottom line, boost revenue and attract investors.
This knowledge helps us narrow down what we are looking for. We are looking for an accountancy firm that ...
- Specializes in small businesses.
- Has experience working in the digital marketing sector.
- Can provide profit consultancy advice and business growth analysis.
By contrast, if our example were a multinational construction chain employing 3,000 people, with massive staff turnover, looking to maintain profitability while moving into architectural design as a side project, we'd need an entirely different type of accountant.
With a picture of your perfect accountancy firm or accountant in mind, you can now start looking for them. Hunt online and locally, seeking the best fit for your criteria. It may be a challenge to find exactly the right accountant for each and every need, but the closer you can get to your ideal candidate, the better they can help you achieve the success of your dreams.
Knowing these factors also helps you avoid firms and accountants that are not the right fit. Many accountancy agencies take on any client who comes their way simply to boost revenue, but they may lack the experience or service opportunities you really need.
If you don't consider your needs first, you won't be able to tell if a company is offering to support them.
The important takeaway from this article is that accountants are unique, just like you. Don't hire the first one you find or the cheapest firm. Consider what's important, how different accountants can help you progress toward certain goals or complete certain tasks, and you'll find you get a lot more out of your investment.