Some of the comments raised by the members at a recent Business Exposure Group meeting:-
Most SME’s use external accountants to a minor degree, only for tax and statutory compliance.
Most accounting for an SME is done by the owner, which is costly because their time can be better spent developing new areas of the business instead of “doing the books”.
Owners are reluctant to employ a management accountant as they want to maintain control of sensitive information.
SME owners lack the knowledge/understanding of their costs and as a result get their pricing and product mix decisions wrong.
Accountants should challenge the business, to put cash ahead of profit.
Trust is really important, and most owners prefer local firms so that they can meet face to face. But many are just employing firms to deal with the control functions of the business. The real value of an accountant is to assist with strategy. Employing a bigger player who has greater relevant experience is key. The problem that many owners face is where to find such a person or firm, because it is not what you know but what you don’t know that can add real value.
There is an argument that employing a part time Finance Director at £600-£1000 per day, once a month can add tremendous value to a business, including adding gravitas to fundraising/bank negotiation/exit planning.
Situations when you need an FD- Don’t know how the business is performing/Profits not increasing as fast as sales/Business is growing fast and you are outside your comfort zone/ The business is loosing money/ Your held back by a shortage of funds.
When employing a part time FD, use your accountants or “FD pal” to attend the interview and ask the technical questions to differentiate who is good from the bad.
How involved are you with your accountants?