Your relationship with an accountant is likely to be a long-term commitment, so you need to choose carefully. What are you looking for from this relationship?
If you run a steady-state lifestyle business, are not looking at any major changes, feel you’ve got a good handle on things – then a high-street accountant who does your taxes and year-end accounts is probably all you’ll ever need. You need to be sure that your accountant is competent (i.e. member of one of the professional accountancy bodies and relevant experience) and provides a basic level of customer service (returns your phone calls, keeps promises, takes reasonable time to do the job). Other than that, you are likely to be interested in price above anything else.
If you are looking to grow, however, then your demands for a relationship with an accountant should be much higher. Your accountant needs to be able and willing to:
1) Help you grow – this means going beyond compiling the figures. She should be able to tell you a credible story about what the figures are saying and identify areas where business changes should be made to improve profitability. Should your working capital be improved? How? Should you re-consider your service or product mix and focus on the areas with the highest margin? Which one of your customers should you nurture, and which should you leave behind? Your accountant should help you find answers to all these questions, and many more.
2) Care about your business – your accountant is unlikely be a specialist in your business, but you should expect your accountant to try and understand your business and care about it. If he doesn’t care about your business and you as a business partner, question whether you are in the right relationship.
3) Challenge you – if your accountant truly cares about your business growth, you should expect her to challenge you (constructively, of course). You should expect your accountant to look for, find and act on any anomalies, early warning signs and potential opportunities – pro-actively. If your idea is unlikely to help the business grow, you should expect your accountant to tell you so. You don’t want a wet rag who agrees with you and just counts the beans, do you?
4) Practice what he preaches – if he advises you to look for customer feedback, does he ask for yours? Does he understand and respond to your needs? Your accountant should speak out of experience when it comes to business growth. Your relationship with an accountant should be a two-way street, with challenge both given and graciously received.
5) Earn your trust – your finances are close to your heart and a topic you would not discuss with just anyone. You should meet and like your accountant and feel that you can trust her. If you feel no spark, look for someone else – the relationship will only blossom if there is a genuine connection.
Recommendations of those you trust are a good starting point – however, what works for one person may not work for you, as you will have your own style and may have different needs. If you are growing, you may want to consider a management accountant (look at Your Management Accountant site or check out the Chartered Institute of Management Accountants to find one in your area), who will provide a combination of accountancy expertise and commercial skills. Meet with at least three different ones (unless you find love at first sight) and ask questions. Trust your gut feel and go for it!