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It's not uncommon for businesses to stick with the same accountant for decades. While this is fine if the accountant is performing well, too often business owners are hesitant to switch from an ok accountant to a good accountant, settling for mediocre quality.
In this post, we'll delve into the differences between a good accountant and an okay accountant and explain why investing in a good accountant is essential for your business.
Here are five reasons why a competent accountant sets themselves apart from an average one:
1. Attention to detail
Great accountants have exceptional attention to detail and are able to spot errors and inconsistencies that may be overlooked by an average accountant. They are meticulous in their work, ensuring that every detail is accurate and precise.
For instance, when processing a supplier invoice, an average accountant might only check the basic information like the description, amount and payment details, and make the payment. However, a good accountant will go the extra mile and scrutinize the invoice to verify whether the amount charged is reasonable based on the goods or services provided. They will also ensure that the supplier has charged the correct GST amount and that their details are legitimate. In addition, a good accountant will thoroughly review the contract terms to ensure that payment terms are consistently followed when orders are placed under a contract.
By choosing a good accountant, business owners can have peace of mind knowing that every aspect of their finances is being handled with the utmost care and attention to detail. The time and effort invested in finding the right accountant will undoubtedly pay off in the long run, as they can help identify potential areas for cost savings and ensure that the business remains financially stable and prosperous.
2. Proactive Approach
A great accountant is not just someone who waits for tasks to be assigned. They take the initiative to identify ways to add value to your business. They proactively look for ways to save you money, streamline processes, and offer advice on financial matters. For instance, they might help you design a new inventory management procedure or introduce a system to manage your job costing more effectively.
On the other hand, an average accountant will require constant supervision and follow-up. You might find yourself chasing them up to file your tax returns or pay your employees on time. They only do what they are told to do, nothing more. A great accountant, however, goes above and beyond to help you achieve your goals because they are passionate about their job and care about the long-term prosperity and sustainability of your business. Invest in a good accountant who will take a proactive approach and add value to your business.
3. Strong Communication Skills
Great accountants are excellent communicators who can explain complex financial concepts in simple language. They are comfortable communicating with clients, other professionals, and even non-financial stakeholders.
A good accountant can negotiate credit terms with suppliers, liaise with customers to ensure timely payments, and help you understand your financials in a way that makes sense. They can also ensure that your employees understand their entitlements and obligations. In addition, they are not hesitant to share their ideas and collaborate with your team to implement new strategies for your business. On the other hand, average accountants may limit themselves to working only with numbers, avoiding interaction with external stakeholders and/or your team. Therefore, it's wise to invest in a great accountant who can help your business thrive.
4. Analytical Skills
While both okay and great accountants have a solid understanding of accounting principles, great accountants go beyond that and have exceptional analytical skills. They can interpret financial data to identify trends, patterns, and opportunities for growth.
While an okay accountant might simply send you monthly reports on your profit and loss and balance sheets, a good accountant can help you understand what those numbers mean for your business. They can identify trends, patterns, and opportunities for growth, and give you actionable advice on how to improve your pricing, increase your networking capital, and maintain appropriate levels of liquidity for example. With their ability to forecast your future performance based on historical data, a good accountant can give you a clear direction for where your business is heading and what resources you'll need to reach your growth targets. So, investing in a good accountant is crucial for business success.
5. Business Acumen
Great accountants are more than just number crunchers. They understand the broader business context in which their clients operate. They are familiar with industry trends, regulations, and market conditions that may impact their clients' financial performance. This knowledge allows them to offer valuable insights and recommendations to help their clients achieve their goals.
Suppose an accountant is working with a manufacturing company that wants to expand its business into a new market. In this scenario, a good accountant will not only prepare the financial statements but also study the market trends and regulations of the new market. The accountant will analyze the financial implications of expanding the business, such as the investment required and the potential returns. The accountant will also analyze the tax implications of the expansion, such as the local tax rates, and determine how they will impact the company's profitability. Based on this analysis, the accountant can offer recommendations to the company's management on how to proceed with the expansion plan. For example, the accountant may suggest ways to minimize the tax burden or recommend a financing strategy that will reduce the financial risk of the expansion. By taking into account the broader business context and offering valuable insights, the accountant can help the company make informed decisions that will lead to successful outcomes.
Overall, a great accountant's understanding of the broader business context in which their clients operate enables them to provide valuable insights and recommendations that can help small businesses achieve their goals.
Why it is worth investing in a good accountant:
In summary, investing in a good accountant (like Cleverly Accounting) is worth every penny as they have the expertise, knowledge and skills to save you time and money in the long run. An average accountant may provide basic services, but they lack the experience and ability to provide tailored advice to your unique financial situation. This can lead to missed opportunities, errors, and inefficient use of resources, which can ultimately cost you more. Additionally, a good accountant can help you make informed decisions, optimize your tax strategies, and provide proactive financial planning advice to ensure you meet your financial goals.
In short, the benefits of hiring a good accountant far outweigh the cost and will ultimately help you save money and grow your wealth over time.