Wednesday, 18 June 2014

Choose carefully ...

I've spent several weeks now working with a company whose books are in a mess.

So what, I hear you say. Their tax return isn't due, so what does it matter?

Well, they don't know how much their customers owe them so can't chase the debt effectively, causing cash flow problems. They are unable to pay their suppliers because they don't know how much they owe and so are being put on stop, affecting their ability to complete the jobs they're currently working on without the supplies they need.

So quite serious stuff, really. In fact, the sort of stuff that causes businesses to fail.

But how could they possibly have got into such a mess? They knew that they didn't have the accounting skills that they needed in house and so took on an accountancy firm to keep their books and manage their accounting affairs. Isn't outsourcing the way forward?

It turns out, the accountants were out of their depth and the company had no grasp of what the accounting firm were doing.

So while I'm a definite proponent of outsourcing (see last week's blog), there are clearly pitfalls to watch out for and avoid.

The first thing you need to do is to make sure that you are engaging the right expert to work with you. Anyone can claim to be an expert, but before you trust anyone with your business you need to make sure that they are going to take good care of it. The internet is great for this, have a look at websites and on social media, and it's always worth running a google search. Check out whether your chosen expert has any qualifications, look at their experience and what other people have to say about them. Arrange to meet them face to face and see if you can speak with some of their other clients. Get a feel for who they are and whether they are right for you.

Once you have identified the right expert, chat through with them what they are going to do for your business and why. Please don't ever try to relinquish responsibility for any part of your business because, if this goes wrong, it is you that will need to pick up the pieces so you will need an idea of how they fit together. Listen to what your expert says and be open to advice, but don't be afraid to ask questions or make suggestions – this is your business.

And at the end of the project, or even mid way through, ask more questions – make sure you understand what you are getting for your money. Don't be afraid to ask for an explanation of the numbers in your tax return, of the clauses being put into contracts being drawn up, of the direction of your marketing plan or the design of your website. While you don't want to be drawn into the details (you don't need to know how to build the website), you do need to have an understanding of each area of your business so that you can make it work better as a whole.

So, in summary, when you are choosing who to have in your support team, choose carefully and always make sure that, when it comes to your business, you are in control.

To find out how Pringle Accountants can help you, visit our website