Ok it’s time for another accountant rant.
Honestly it’s not that I like accountant bashing; I’m an accountant myself after all, and I work with some superb accountants, (you know who you are) but I do come across those of the species who give our profession a seriously bad name.
Last week in just one day I had two encounters with prospective clients who’d been, shall we say, less than well served by their year-end accountants.
Please can I have more information?
One lady I spoke with had built a business valued at £15m. No mean feat I’m sure you’ll agree. And all she was getting from her accountant was a quarterly set of figures, all in statutory accounts format, ie the same as you get at year end.
After successfully building her business for many years she felt “all at sea” with the accounts and didn’t feel that she understood enough, or was getting relevant information.
Her business is a complex one, is growing, and she was feeling increasingly exposed on the numbers side of things. So she’d gone to her accountant to ask for monthly accounts instead of quarterly, and some more useful information that would tell her what was going on and help her plan ahead.
She was all but patted on the head and told she didn’t need monthly accounts and what she was getting was “fine”.
Just who does the accountant think he is telling his client that they don’t need to know any more about their own business? Is it just because he isn’t geared up to support her, or because he doesn’t he know how to? Either way he should be hearing what his client is trying to say and pointing her in the direction of someone who can help, not sending her away feeling helpless.
The other company I met with was turning over tens of millions of pounds; a very fast moving and complex business and again were being given figures in year-end format. No forecast, no gross margin information, not even a split of income streams. Not even a suggestion that they should be looking at their numbers in more detail or planning ahead. Not useful.
What is going on out there?
I just find it baffling and beyond frustrating that business owners are expected to run their companies with such poor information. They have the absolute right to rely on their accountant as their trusted advisor and to know they’ve got their back – helping them be in control of their finances and their futures.
Just how many opportunities are lost over the years because of a total lack of useful management information, support and advice? I wonder…..
Here’s a heads up
Management accounts are not just statutory accounts done more frequently than once a year. And they are not a printout from Sage or similar. They should be carefully crafted to be a reflection of your business; they should show you how your decisions and activities impact on your cash and profitability, and most importantly should forecast the future of your business.
And this needs real thought and expertise – not just bashing your Trial Balance into statutory accounts software. This really makes me cross!
Oh, and quarterly accounts are never ok. No matter how small the business is. My business is sub £500k, and I could never imagine not finding out how April, May and June were until sometime late in July – total madness. Anything could happen in that time.
What should great management accounts look like?
Ah, I’m very pleased you asked!
I’ve spent the last 16 years crafting and refining what fantastic management information looks like – working out what most helps a business owner totally understand what’s going on in way that’s easy to understand, and that has a big impact on driving the performance of their business. We’re all about Radical Financial Results here at The F Word, so everything we do is about that.
If you’d like to see a copy just drop me an email and I’ll send a copy over to you – no catch, no sell! I feel very strongly about this and want business owners to know what good looks like so they can get better information into their businesses.