Choosing an Accountant - From Poodles to Pugs

From Poodles to Pugs and Basset Hounds to Bulldogs, Crufts is a world famous dog show that isn't for the fainted hearted.
Standards are high and judges are strict.
Nearly 200 breeds take part in the show which can send a dog's career through the (kennel) roof.
But to the untrained eye one pampered pooch is much the same as the next.
And it's a similar picture for accountants. Take a walk down any high street and you'll see at least half a dozen accountancy firms offering services that range from annual tax returns to performance management.
So how can you tell if an accountancy firm is the Best of Breed?
Well, irrespective of their qualifications, accountants perform one of two tasks:
- Compliance work, which generally means tax returns and annual accounts. Companies are legally required to do this and using an accountant can free you from the administrative burden.
- Value-added services, these are the services which will help your business grow.
Compliance work is crucial. Businesses would swiftly be brought to a halt by the powers-that-be if their tax returns and Companies House submissions weren't completed accurately and on time.
Historically, compliance work has been the 'bread and butter' for many accountancy practices. But it can lead to an accountant focusing less on client relationships and more on getting the paperwork done. This is why some people only hear from their accountant once a year.
The compliance accountant focuses on:
- Bookkeeping
- Completing quarterly VAT returns and annual tax returns
- Payroll
That's where firms providing value-added services distinguish themselves. By working closely with clients management accountants help businesses improve performance.
They work with clients to understand both the financial consequences of past decisions and ensure they make the best decisions for the future to keep growth on an upward trajectory.
The value-added accountant focuses on:
- Cashflow management - cash is king and businesses need to be able to see if a shortfall or surplus is on the horizon.
- Pricing - sometimes the best-selling product by volume may not be the most profitable.
- Cost control - businesses must keep a tight rein on costs because a product line can be rendered unprofitable by just one out of control cost. Variances against cost forecast should be evaluated monthly and corrective action taken.
- Sales analysis - looking at trends and reacting to them is essential, for example, is cross-selling working or is the product mix wrong?
- Buy or lease decisions and cash or loan decisions - what is the best way to expand the business? Does your business plan stand up to scrutiny?
Businesses should look for accountants with experience of working in industry. The value of their experience can't be stressed enough. In simple terms an accountant that has industry experience will have developed new systems, put them into practice and made tweaks according to the results.
An accountant that has only worked in practice will not have that expertise, unless they have many years of experience working on projects.
So when you're ready to choose an accountant, take a tip from the Crufts judges; Paws for thought and make sure you pick the accountant that will take your business from 'doing ok' to 'flying high'.

Shahbaz Husain is a partner at Abacus Gold, a London-based accountancy, tax and business advisory practice focused on the SME sector. Prior to this Shahbaz has worked at major multi-nationals in a variety of roles and also at the Housing Ombudsman Service where he was Head of Finance & IT.
Abacus Gold is a part of the Abacus Network, a national network of qualified accountants that focuses on the SME sector.
This article may be used freely for non-commercial purposes. The copyright remains with the author.