The role of an accountant in a business.
Many small businesses do not have an accountant on the payroll and hire external consultants to fulfil their financial needs. In too many cases the accountant is only working for the benefit of external stakeholders such as Companies House and HMRC. This role is described as financial accounting, with a focus on historical information prepared for people outside the organisation.
To be in control of your business you need to have up to date and forward-looking information. This role is fulfilled by a Management Accountant.
What is a management accountant?
The definition from Wikipedia at the time of writing:
[Management accounting] is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions.
The summary definition from the Chartered Institute of Management Accountants:
Management accounting combines accounting, finance and management with the leading edge techniques needed to drive successful businesses.
To get the best value out of your accountant and to deliver the best return from your business, you and your accountant need to work in concert. Accountants hate the dreaded shoebox moment where a whole year’s transactions are delivered months after the financial year end. This approach costs the client more as the accountant will be charging for sifting through pieces of paper. The value to the business of the accounts is reduced as any analysis is out of date.
With cloud software systems you and your accountant can work in real time. Cash transactions can be entered into the system automatically from your online banking meaning that you are not taking up your accountant’s time or yours with inputting figures from paper statements. This also means that your accountant can see the business in real time and is able to support you and perform a leading role.
Leading or following?
If your accountant is someone you hear from once a year, the service they provide is passive and follows your business. It may be time for a change to a firm with a focus on leading your organisation and being active throughout the year.
For more information on an accountancy firm who can provide the statutory accounting, but focuses on leading your business to greater success please contact a member of the Chartered Institute of Management Accountants using the link to The Team above.
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