Think you can escape the guidance of an accountant? If your goal is to have a thriving business, think again.
By Jennifer Warawa
Results from a survey conducted by Canadian small business in December 2013 that focused on the success and challenges of new and established entrepreneurs. Two of the findings struck a chord with me, as they pertain to working with accountants, something I am very passionate about. The top business challenges identified during start-up were marketing and taxes, and top personal challenges were work/life balance and money management.
When it comes to asking for help, the survey data shows start-ups are more likely than owners of established business owners to enlist the help of mentors or coaches, while established business owners are more likely to utilize accountants, lawyers and bankers. To me, this is saying something about how to be successful.
When you think about the number of start-ups that fail in the first year of business, and when you consider all the challenges entrepreneurs face, it becomes clear to me that we must change the mindset of start-up businesses to realize the importance of working with an accountant.
Does an accountant cost money? Yes, of course, which is often one of the deterrents entrepreneurs see when considering utilizing a professional accountant. However, I prefer to look at it as an investment, not an expense. Entrepreneurs often don’t have a full understanding of the scope of work an accountant can perform.
Think of an outside accountant the same way you would a longtime friend, as a trusted source of information and advice, but when it comes to your business finances they likely have a lot more expertise and experience. An accountant’s scope of work does not end with tax preparation; they can and should be a year-round business partner that can lend expertise and perspective in your industry to help your business grow and navigate through an uncertain economy.
Here are several reasons why all entrepreneurs should work with an accountant.
1.) Allows you to focus on why you started your business. Entrepreneurs are passionate, and the Sage survey found that more than half of small Canadian business owners went from business idea to opening in less than six months. With such rapid growth, business owners can’t afford to get bogged down with tasks that don’t help you continue to grow. Accountants will take on the heavy lifting of many different aspects of your business.
2) Achieve work/life balance. “What’s that?” many entrepreneurs might ask. Regardless of how new or established a business is, owners across the board struggle with finding the right balance between work and having a life. In fact, maintaining a work/life balance was the #1 most challenging personal area for Canadian startups. This goes back to point #1; accountants take on the tasks you are less than thrilled about handling, allowing you to sell, market, and grow during the day, and take your son to soccer practice at night.
3) Portray your business professionally. Your accountant will represent you and your company in the best possible way. This is particularly important as new businesses strive to build strong relationships with key players in their success, such as the bank.
4) Businesses using an accountant report the service is vital to their success. As reported by the Sage survey, more established business owners report working with an accountant, agreeing that working with an accountant is a critical element in success.
5) Accountants can provide a new perspective. Often times entrepreneurs are so involved running the day-to-day operations of their business that they may not be able to see the whole picture. Someone who is removed from the business can provide a different perspective that may otherwise be missed. Meeting with an accountant can be like taking a step back, looking at the bigger picture and gaining a fresh, new perspective. Sometimes that’s all it takes to come up with the next big idea.
6) Accountants have reach. Don’t underestimate how valuable it is to receive guidance from someone who has insight and knowledge across hundreds of businesses and industries. Accountants not only get to see the financial information of many businesses across a variety of industries, but they also have visibility into best practices that are working for other businesses as well as the mistakes others have made that have led to failure. Being able to have this insight and share information on what has or hasn’t worked for others is invaluable why reinvent the wheel if you don’t have to?
7) Businesses need a plan. One reason thousands of businesses fail every year is because they didn’t have a plan. When asked why, they said, “I just didn’t know where to start.” This is where an accountant comes in. A good accountant will partner with a business to look at all the data and help build a roadmap to success. Poor planning isn’t necessary, and bringing a professional on board can help small businesses plan for success.
8) Accountants understand tax. This may seem obvious, but keep in mind that rules and regulations change frequently, and it’s tough if not impossible for any business owner to keep up with it all. Twenty-nine per cent of Canadian small business owners admitted that accounting and bookkeeping is one of their biggest challenges. An accounting professional can take away your uncertainty and ensure your business stays compliant.
9) Analyze data for growth and profitability opportunities. If all your data is just “sitting” in a database and you’re not interpreting, analyzing or using it to help drive your business direction and decisions, then you’re missing out on a great opportunity. Have an accountant help you dive into the numbers and use them to propel greater business growth and profitability in the future. A great way to do this is through online collaboration in a small business accounting solution where accountants have visibility into clients’ financial data in real time.
Can your start-up survive without the assistance of an outside accountant? Possibly, but the extra insight, guidance, and expertise an accountant offers can be the catalyst that makes your business thrive.
As Vice President and General Manager of Sage Accountant Solutions at Sage North America, Prior to working with Sage Jennifer was a small business owner for 12 years.