“Treat workers well... and ignore accountants at your peril”

Author: Nigel Simmons FCCA
July 6, 2022

I’ve often found that the renowned entrepreneur Julian Richer writes some very good articles, so when I came across his piece in the Times “Treat workers well... and ignore accountants at your peril” as you might imagine (being an accountant) my opinion was unchanged! View the article on Julian’s website here, number 23. There’s also some other great content from Julian that you might find useful.        

Something I see all the time are businesspeople who are incredibly talented at what they do but fall short when it comes to paying attention to the figures. Julian like so many other good business owners is at heart a salesperson and the driving force behind the business. However, as he admits, not having a good accountant was nearly his undoing.  

Basics like starting with a good business plan, cashflow forecasting, tax planning, management accounting; they may seem like the boring side of owning a business but can be the difference between failure and thriving, and that’s not to mention the statutory requirements from Companies House and HMRC!  

A good accountant will keep you several steps ahead; you should not only have a good idea of what your next tax bill is likely to be but already have made provisions through the year. Your accountant should keep you updated with the latest legislation ensuring your business is as tax efficient as possible. We have had particular success with R&D tax claims as an example.  

Julian writes about the business balance sheet - “how much do you have in your purse after everyone you owe money to is paid off?” It sounds like a very simply concept, however, so many business owners focus on turnover, which course is an important figure, but, if there is nothing left once you’ve paid everyone (except perhaps in the early stages of trading), then there is something that urgently needs addressing. An accountant will help you focus on profit margins and help you build a robust forecast as well as helping you identify potential cost reductions to maximize your bottom line.  

A good accountant will look at your whole business. They should be able to advise on the right time to look at things like funding and what is the right funding for you. For example, I recently wrote a short article - TAX-EFFICIENT FINANCE FOR YOUR COMPANY. Your accountant should be able to not only work with you on a growth strategy but have the range of services to help facilitate that growth.  

The second half of Julian’s article is focused on workers and once again I couldn’t agree more with his conclusions that treating your staff well and having a happy work force means ultimately more money in the bank. In addition to his advice, we often encourage our clients to look at HMRC approved employee share option schemes (EMI) as a way to incentivise and retain key workers.  

For me, being a valuable Accountant is not just about the numbers. The numbers are important, but they only provide a starting point to initiate actions that will increase the profit and hence value of your business. A valuable accountant will be part of that process of improving the value of a business.  

 

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