22 March 2018
Whether you are an in-house accountant or an accountancy firm, getting a company’s accounts right is more than just balancing the books. We spoke to our inhouse accountancy expert, Martin Coates, for open, honest and reliable advice on the accountant’s role. Martin worked for over 20 years as an accountant and an auditor before working a long career in business management software.
Some organisations seem to be completely in awe of their accountants while some ignore them completely. Neither is a good approach – accountancy is a means to an end, not an end in itself. You need to be able to understand the messages your financial information is giving, and act accordingly.
This is a big subject but a few basics do spring to mind:
Be aware of stock control – it’s a big expense so it needs to be kept as low as possible, even to the extent that you may occasionally be unable to fulfil orders. If your organisation is service rather than supply based, you need to keep an eye on your level of resources and maybe occasionally have to turn work away rather than carry a large staff overhead.
Be aware of cashflow – cashflow problems are the main reason that otherwise sound companies fail. You need to ensure you pay your suppliers on time but not before and ensure your customers pay you when they’re supposed to and not long after.
Make sure your financial reporting is as clear as it can be. The average set of financial statements will make an average non-accountants eyes glaze over. A set of accounts should be trying to tell a story so use traffic lights, smiley (or not) faces, anything to get the message across.
Act quickly. If problems start to appear in an organisation, the sooner they can be defused the better so that they don’t become unmanageable.
Be positive! While an accountant has a variety of moral and legal obligations to people outside their organisation, to ensure resources are used legally and appropriately, there is a lot of scope for freedom of action. It’s a bit like being a bank manager and your colleagues are your customers who keep coming to ask you for a loan. You would normally want to say yes but occasionally you would have to say no because you know they wouldn’t be able to pay it back.
They all just help the organisation achieve its objectives – whatever these may be.
It can be overstated but it is important. Timely and above all accurate financial information is an essential part of telling an organisation where it’s been, where it is and most important of all, where it may be going. It should be able to help you flag up any potential pitfalls e.g. a cashflow bottleneck and help identify opportunities for development.
Quite a bit. Customers expect their suppliers to be agile, efficient, cheap and above all, quick. An accounting firm is a supplier to the supplier, so their demands will be exactly the same. They will expect their accountants to be able to do the basics with the minimum of fuss and cost. They would then expect them to be agile enough to provide guidance about future trends and enable to cash in on the new technologies that are coming – and there are some big ones.
It depends on what type of accountant you are. If your main revenue earner is the routine preparation of accounts, payroll, VAT and Tax Returns you may be in trouble as practice automation is impinging on your work area to the point where almost anyone can do that for themselves. Even some audit functions can be automated. If your focus is on financial advice and the more “softer” services, your future should be somewhat safer.
If you are still preparing basic accounts for clients, practice automation will become essential if you want to remain competitive in that area.
As a knowledge hub, we look to find a responsive, strategic and accomplished answers to your questions. Rather than trying to sell you software with a specification that we have written, we are opening up to accountants to see what tools would help you to be better practices. If you are interested in getting involved in adding value to your business, please take 5 minutes to fill in our questionnaire.
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