No Funny Business

Hiring a new accountant, PR company or other service provider? Don’t make a move without reading this first.

Asked if she had been funny as a child, the great American comedienne Ellen DeGeneres once quipped, “Well, no, I was an
accountant”.

Chances are, though, that this queen of the one-liners is probably very happy these days to have the services of an accounting professional keeping an eye on her own bottom line – as should any successful businesswoman.

When starting out in business, the best thing anyone can do is to bring in professionals for those areas in which one lacks expertise, whether it is accounting, public relations or any other specialist service provider, in order to be able to concentrate on areas in which one does have expertise.

That means listening to the people you trust – a bank manager or other advisers, friends and associates – when you are selecting a costly but critical resource. You need to be dealing with someone you not only like working with, but who will add proven value to your business.

As far as accountants go, be specific with what you want, ask for a quote or agree on the time to be spent on the task and see what you can do to help the process. This is obviously useful in gaining an understanding and in keeping your costs under control. However, don’t be afraid to share the bigger picture – these are people who need to know what’s going on to give the best advice.

Some people starting out believe they can keep their own books. After all, they reason, there’s plenty of snazzy accounting software on the market. There are programmes that can even appear to complete accounts and tax returns all by themselves. It looks as if you can, therefore, save money and at the same time keep a closer eye on expenses when they manage the accounting compliance.
Looks can be deceptive, however. Why? Because a smart business owner always assigns a dollar value to the services they provide, even if they aren’t currently taking a salary. They don’t try to micromanage things without taking into account the value of their own time. They know that the cost of a good accountant performing accounting tasks is, or ought to be, far less than the money they can make through generating more sales and business activity.

In the long run, an accountant is not just someone who keeps track of the dollars and receipts, but is a key member of your advisory team. Your accountant is the person you can ask about leasing or buying a car, extending a business trip into a holiday, and how much should be put aside for retirement. In short, they are the specialists who will save you time and money.

Some questions you might want to ask in selecting an accountant might include how well you relate to them personally and professionally, whether they have a proactive approach, and how clear are their skills and strengths.

Are they technically creative? Do they have good tax knowledge? Are they experienced in the area of your proposed activities? Does the firm offer services that suit your needs? How much time would this person spend on your business a year? What is their hourly fee and how do they charge? Do they suggest ways in which you can minimise costs?

Let’s face it. If your accountant does not listen or give you the right advice, then you're going to have a much harder time achieving your financial goals.

For obvious reasons, I’m slightly biased about suggesting people look for the letters ‘CA’ after the proposed accountant’s name. Chartered Accountants really know their stuff because they have to pass stringent exams set by the NZ Institute of Chartered Accountants, and they have to maintain levels of continuing education to ensure they stay up to date with any new accounting and tax developments. Anything less, as I’m sure Ellen DeGeneres would agree, is no laughing matter.

Debbie Haddon
www.openside.co.nz