Insights

Why A Great Accountant Is Vital To The Success Of Your Business

Tuesday 4 May 2021

I firmly believe that every business out there needs a good accountant.

The collaboration between the entrepreneur and the accountant can do a lot to take a company into that period of high growth and help you avoid some very costly mistakes!

This blog is all about helping you understand the real role an accountant plays in a small, growing business and why having one is so important to its success.

As this article focuses on the accountant, I thought it appropriate to pick the brain of one of the best in the business, the financial director of EHE Capital, Elliot Smith. 

Elliot has worked with me for years. He was there for the high growth journey of my previous company and played an instrumental role in its success. 

The following article is based on a fantastic conversation Elliot and I had about the accountant’s role in a company that’s ambitious for fast growth.

Hopefully, it will help you start to see that an accountant is far more than just a number cruncher!

 

More than “just an accountant”

Being in control of your finances can make such a big difference to how you think as an entrepreneur. When you have monthly accounts and weekly cash flows, you can start to bring a new level of financial thinking into your strategy meetings, which can set the business moving in the right direction.

However, I know from experience that the financial side of the business doesn’t come naturally to many entrepreneurs. That’s certainly my experience anyway!

And Elliot seemed to agree with me. Here’s his take on it:

Elliot: “Most entrepreneurs probably wouldn’t say that accounting or finance comes naturally to them.

Entrepreneurs are more well known for following their gut instinct and acting on that, whereas accountants have a more risk-averse way of doing things. That’s why there needs to be a collaboration between the two, which I think is happening more often. 

Accountants now are embracing that entrepreneurial spirit these days and are openly collaborating with entrepreneurs, which is leading to a much higher chance of success in new businesses.

One thing that’s helped that massively is advances in technology within the financial industry, which has put less of a burden on accountants. For example, certain cloud-based tools, such as Xero and Receipt Bank, can handle a lot of the time-consuming reporting an accountant used to do. 

This means the accountant can focus more of their time on all the other elements of their skill set – and there are many!

A good accountant isn’t just a number cruncher who provides reports. They often have a hell of a lot of commercial acumen, which is invaluable to any entrepreneur.

They can use that acumen to act as a sounding board and help with the strategy, direction and operation of the business, as well as all the other things you’d expect an accountant to do.”

 

Finding the right time to hire your “not just an accountant”

Elliot is on the money here (no pun intended!). A good accountant is so much more than just an accountant, and business owners need to be aware of that. 

However, let’s face it, most startups aren’t particularly well funded, and bringing in an accountant can be seen as an extra cost.

So, with that being said, when is a good time to bring somebody in who does more than just your six month or annual accounts?

I asked Elliot what he thought about this:

Elliot: “I think it’s probably never too early to bring somebody on board that can question what you’re doing and why you’re doing it, and a good accountant will do that. 

And yes, there will be a cost of bringing these people on, but these days, with all the new technology available, it’s become a lot more cost-effective to find someone who can offer these higher-level services.

So, any business that has an aspiration for high growth should be looking at bringing somebody in ASAP.”

Sound advice there from Elliot. The quicker you can have someone on board, who can advise on your high-growth plan, the better off you will be in the long run. 

 

Providing value in the boardroom

Another great thing about having a financial expert close to you is that they can be a great person to have in the boardroom. 

Accountants and investors speak the same language of numbers, which means that investors tend to listen more to the finance director than the entrepreneur. The entrepreneur is so emotionally involved in the company that they’re prone to exaggerate its capabilities, but the finance director often deals in facts. This means they will give a more balanced answer to the investors’ questions, which could help you secure a good deal.

 

Find a good personal match

Bringing in a good accountant or financial director isn’t all about their skill set. They also need to be the right match for you on a personal level.

The relationship between the financial director and the entrepreneur has to be based on trust and being comfortable discussing and debating things in an honest way. If you can find someone like that, it’s a very powerful relationship to have.

Elliot and I have had a great relationship for years now (maybe that’s because we are both huge Man City fans), and that’s enabled us to do some amazing things together in business, so never underestimate that personal connection. 

Here’s what Elliot said about the importance of having a good relationship with your FD:

Elliot: “Too often in business, there seems to be a bit of a power struggle between the entrepreneurial and finance sides. But in all the successful businesses I’ve seen, these two parties worked together hand in hand. 

In that sense, I would say finding the right accountant is about much more than just their technical abilities – it’s about finding the right person who’s the right fit for you too. Obviously, just like any other sector, you need to find someone with the skills, but finding the right person with the right personality and mindset is just as vital. If you do, they will install that way of thinking right through your business, which, in turn, will be a great catalyst for high growth.”

So, remember, an accountant is so much more than just your everyday number cruncher. A good one can really help shape your entire business strategy and be the sounding board you need to filter out the really good ideas from the potentially costly ones!

For a more in-depth discussion on EHE Capital and the importance of an accountant, check out episode 12 of our podcast “Extraordinary Entrepreneurs Together”. Alternatively, you can email us with your questions at elliot@ehe.capital.

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