Why invest in an Accountant…
…when you can just use an accounts package?
Good question. Now I’m a huge advocate of the old adage “Teach a man to fish…”. But that’s just it…TEACH. Not just send him out there with a line and some bread.
Of course there’s a chance he’ll catch a fish with that simple line and mangled piece of bread on the end but just think what might be caught if he was first TAUGHT how to fish?! What might be achieved if he was informed which rod to purchase for each environment and why? Educated on the types and benefits of the various lures, hooks and bait there are as well as when and how to use them. Shown how to flick your wrist to make the line sing and sway to the right rhythm and drop exactly where it is desired. Coached on how to “play” with the fish in the magical “to and fro” dance of luring the fish in once it has been hooked… Only then does fishing go from a means to an end, to a true art form where real and relevant results are delivered. Who knows, he may even learn to enjoy it?
Much in the same way an accounting software package can help you keep track of your bills and invoices; you will only get out what you put in. Really worthwhile information will only be produced if it is set up correctly and used accurately thereafter. Investing the time and money to set up the chart of accounts, VAT codes, reporting layouts, invoice templates, statement templates etc. right at the beginning will save significant time and money later on. If these functions are done precisely at the outset and utilised meticulously then your software can really start to think for you – and at a simple click of a button produce a myriad of reports and financial insight.
In addition to the accounts software there’s the small matter of understanding your obligations – both legal and reporting as well as their frequency and deadlines. What about your company formation? Have you considered the financial impact that your chosen structure will have on the tax you pay or your ability to expand? Is your business scalable and are your back office processes, such as accounts, capable of scaling with it? Are you able to transfer data from your IP software to your accounts software, even if via a LEDES file, so as to reduce human error and time wasted on re-entry?
Gaining the knowledge and experience to do this quickly and efficiently takes time. Lots of time. 7 years to gain a qualification in fact. Take my case in point: 3 years to achieve my Bachelor of Accounting Sciences, a further year’s study towards a post graduate Diploma in Accountancy, completion of the Chartered Institute of Management Accountants (CIMA) examinations – 16 of these at the time, although I was thankfully exempt from 9, and a minimum of 3 years of training within a commercial environment. I chose not to become a doctor because it took 7 years to qualify… so the joke’s on me. But then as a Patent or Trade Mark Attorney I suppose you already know – 7 years is no joke!
So when I hear of or see individuals going it alone without any input from a finance professional I am more than simply frustrated, I question their motives. Surely it’s more cost effective to have someone run through your needs, set up your finance function per your requirements and perhaps even provide some training? Thereby enabling you or your staff to get the most from the software, ensure you’re as tax efficient as possible and know when and what documents to file. Even if you do have capacity to take some or all of these tasks on yourself it would undoubtedly be a more profitable use of your time to do business development which would lead to higher revenues, rather than “waste” it trying to unravel the intricacies of accountancy. And what happens when you lose that capacity and matters begin to fall behind as you concentrate on meeting your client’s needs? It’s in the early stages when you will have the most time at your disposal to learn how to get the most from your software, so that when the pressure is on, these new skills have become second nature.
It should be about working smart, not hard. But then maybe I’m missing a trick and the next time I wish to protect my intellectual property I’ll simply file an application myself…after all, it can’t be that hard.
written by Michele Fellows
Michele Fellows is the Director of Fellows Business Consulting a trading name of Fellows and Associates. Feel free to get in touch [email protected].