16 Jun Fancy a long-term relationship with your accountant?
Okay, so most people need long-term relationships in their life, but you might not think the same about the relationship you have with your accountant.
Here are five reasons why you should be thinking long-term about your accountant…
You met your accountant through a friend of a friend
Most people hook up with an accountant through their network because they want to trust them straight away, and if you know someone who rates them, why wouldn’t you? After all, your accountant is up there in the top five people you trust the most (if they aren’t, you need a new one and should keep reading). So, it’s important you like and get on with your accountant, can have open and honest conversations with them, and you don’t feel like you are being spoken down to.
At J2 we often hear, “A friend of mine gave me your details, and you come highly recommended.”
You don’t’ always click on the first date with your accountant
Having said all of the above, it does take time to develop trust. When you run a business, especially a start-up, you wear all the hats, and time is in short supply. However, the longer a relationship goes on, the deeper understanding you get of your personal goals, your business goals and challenges you may face. This is where the relationship steps up, and you see the benefits of sticking it out and committing. Believe it or not, when appropriately utilised, accountants will help you achieve goals and enable you to make quicker business decisions.
You’ve got trust issues with your accountant
Having trusted relationships in all areas of your business, be it in-house or outsourced, is critical for success. Getting each area of your business working together with the people you trust is liberating! Once at this point, you save massive amounts of time in the long run. As a business owner, you will… wait for it… be able to step away from day to day running of the business and take an actual proper holiday without checking your emails 312 times a day and relax knowing everything is taken care of by the people you trust.
We have a client that once told us “I have trusted people heading up each department of my business, including J2 as our accountants, which now means I can visit my family in China for a longer period knowing everything will be taken care of, which I haven’t been able to do for such a long-time since setting up the business”.
Size doesn’t matter with your accountant
However, making small, consistent (positive) changes over time will move you closer to where you want to be (fact). However, these are sometimes forgotten because they don’t immediately impact or aren’t very interesting. This is the stuff exposed when your relationship with your accountant is in full flow; they are under the covers now, understand you, and suggest minor tweaks to your business that will have a significant impact and support your vision and help cash flow etc.
We have a client who runs a digital creative agency that was struggling with their cash flow. He said “I keep forgetting to bill my customers, and it’s giving me cashflow problems. Some clients have not even been billed for bits relating to last year”. So J2 took a look at his billing cycle and came up with a suggestion by having a regular recurring billing date on the 1st of the month with payment collected by direct debit on the 15th of the same month. This had a substantial positive impact on his cash flow, and the company has since been able to grow because of it, but most importantly, his customers love it too because there are no more surprise bills.
A once-a-year session with your accountant will not support your goals
Do you begrudge paying your accountant? Maybe you see them as another annual business cost. . . you might be surprised to hear this, but you probably need to switch your way of thinking. Mishaps usually happen when you underinvest in your accounting function because you are not aware of what’s going on in your business regularly. A once-a-year, ‘wham bam thank you mam/man’ review of the accounts will not get you where you need to be in an understanding relationship. It would help if you had regular touchpoints and have monthly discussions to enable you to be proactive in your business decisions.
We have a client who runs a security services company, that had a ‘once a year’ relationship with their previous accountants but was never sure if he was doing his bookkeeping right and putting enough money away for taxes. So, J2 introduced him to the world of cloud accounting and the benefits it would bring to the business. J2 now do the company’s monthly bookkeeping on Xero and let him know his figures once a month. As a result, each month, our client is confident about how much money the company has made, how much VAT and Tax to put away, and how much dividends they are allowed to take. To do this, they have had to invest four times the amount they were paying their previous accountant, but he says it’s a well worth investment.
Did you know the average time you stay with your accountant due to the pace of business is now roughly six years? That’s two years longer than the average romantic relationship in the UK!
J2 Accounting are old romantics and believes this should be a lot more like 20 years.
If you would like to hook up and discuss a future together, please get in touch with us by completing the enquiry form on the contact us page.