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 www.pringleaccountants.co.uk