Fatal mistakes people make when selecting an accountant
Various studies have shown that behind your doctor, your accountant is one of your most trusted relationships. If this is the case than why is it that so many people get it wrong when selecting their accountant? My take on the fatal mistakes people make when selecting an accountant are below:
- They are seeking an accountant! This may appear to be an odd statement but reality is a business needs so much more than an accountant or a numbers guy, they need a trusted adviser who can guide them on their journey whether that be strategy, accountability, performance, structuring, tax effectiveness etc. If a business owner selects an accountant then don’t be surprised if that is what you get.
- Decisions are made on price rather than value. If I needed a complex operation, I would select the doctor based on expertise and experience not who is the cheapest. Your business is an extremely complex operation, one you cannot afford to get wrong, yet business owners make a decision as to who will be their accountant/adviser with consideration as to who is the cheapest all the time. I strongly believe you get what you pay for and I also strongly believe that if there is no value then you should not do something. A business owner should consider what benefit the business adviser will create and how that relates to the cost, which is the ultimate value test as opposed to price in isolation.
- Not speaking to users. This is crazy. When you hire someone you do reference checks, when you're sending your child to a new school you check the school out and talk to others. So many important decisions in our lives are made after going through various checks, yet when selecting an adviser, many business owners don’t complete any checks. They don’t ask the adviser for referees or talk to any current clients or stakeholders. I don’t blame the accountant or adviser here, it is their job to promote themselves, to get work. It also doesn’t take much effort to complete this important check and if the accountant/adviser does not want to provide any referees then it is probably telling you something.
- Great in theory. If I am taking advice about how to operate my business from someone then I am ensuring they have the experience in actually doing it themselves; and have been successful. So many accountants or advisers know the theory but have never run a successful business themselves or have never completed an acquisition or are not financially well off, yet business owners are taking advice from these people! A quick example of this is that most accountants have trade debtor days at 90 days or worse yet are trying to advise business owners how to get their own debtors in order… how does that work? Ask the person you are taking advice from for evidence and see what you get.
- Location, location, location! In this day and age, with all the technology advancements available, inexpensive travel options and information mobility, picking an accountant/adviser on the basis that they are local is ridiculous; it is too important to your business success. Your business needs the best advice so jump on a plane once a quarter or so, utilise Skype or Gotomeeting or the various other online conferencing facilities for regular catch ups or pay for the advice to come to you; if it is adding value then it is worth it! The world is getting smaller and your business needs to capitalise on the opportunity.
- Our family has always used them. This is a classic, whether it be the family has always used them or we have been with them for a long time or we have a great relationship it doesn’t matter. If you are not getting the best advice your business deserves you need to make a change. If the relationship is so great then your incumbent adviser should be helping you to make the change. Business owners should be making their selection based on what they need not on other people’s relationships.
At the end of the day if a business wants great success they need great advice and successful, experienced advisers around them to provide the best chance of achieving their goals. Stop making excuses as to why you can’t have the best business advice and think about how you select or selected the accountant/adviser that advises you.