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Accounting & Bookkeeping Business Development & Marketing Cash Flow & Forecasting Finance General Turnaround

Is your accountant an information processor or an information interpreter?

piggy bank information interpreterThe right accountant can be a very valuable resource for the SME, but their real value depends on the services they offer.
Choosing an accountant needs to be done with some care since anyone can set up as an accountant without any qualifications whatsoever.
So, the first thing to do is to make sure that any you are considering are actually properly qualified.  There are two recognised bodies, the ACCA (Association of Chartered Certified Accountants) and the ICAEW (Institute of Chartered Accountants in England and Wales).
There is a third body whose members focus on bookkeeping rather than advice, the AAT (Association of Accounting Technicians).
Each has its own examination and qualification system and all three require annual membership renewal which includes the proviso that the applicant must show evidence of CPD (continual professional development) they have undertaken in the intervening year.

Decide what services you want from your accountant

At a basic level, the information processor is essentially a bookkeeper who will do no more than prepare your management and annual accounts and may advise you of your tax liability. Indeed, all too many SMEs only prepare annual accounts months after year end which provide little information to help make decisions about the future.
However, increasingly accountants are becoming proactive and offering a great deal more, much of it as valuable advice to SMEs.
They include reporting the management accounts on a regular basis in a format that provides insights such as project reports or profitability by client or by product category. They can also help with analysing alternative funding options and produce forecasts.
You may also be able to appoint them as an arbitrator on your behalf if there is a dispute with HMRC over payments or liabilities, similarly with VAT and PAYE returns.
Again, there is a qualification for accountants offering this service, the CTA (Chartered Tax Advisor). Accountants must be ACCA, ICAEW, or ATT qualified to take the CTA exams.
The additional benefits of the studying, qualifications and professional development, are that your chosen accountant will have the technical knowledge as well as experience from their client base. This can help them understand the needs of your business and provide the basis for giving advice on any problems they foresee or any opportunities there may be to develop and grow.
They will also be able to advise you on the financial implications of any business initiative you may be considering.
Despite the opportunity for accountants, not all of them take this approach as it involves taking the time and trouble to really understand your business. It also requires investment of time on your part as well as some cost for the accountant’s additional input.
So, do you want your accountant to be an information processor or an information interpreter? Remember it’s in their interests to help you grow because as you do, so will they.

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Business Development & Marketing Cash Flow & Forecasting Finance General Rescue, Restructuring & Recovery Turnaround

Recovering from negative pressure in business

K2 Blog recovery from pressure February 25 2016 ID-100161914In our last few blogs we have examined the effects of negative pressure on managers and business owners and how it manifests in their behaviour both at work and on their families.
We have also looked at the sometimes devastating effects pressure can have on people.
So what strategies are there for dealing with both the causes and consequences of negative pressure. How can a sense of equilibrium be restored and how can the business and people concerned recover?
While the way in which people react to negative pressure can vary with the personality of the sufferer, the essential root cause is a feeling of having no control.
This can be because the demands being made on a manager to achieve results are both unreasonable and unachievable or, for a business owner, because the business is experiencing cash flow or liquidity problems that are making it difficult to keep on operating.
Developing a strategy for restoring the equilibrium and recovery involves finding appropriate help and support to rectify the problems.
The temptation too often is to avoid facing up to whatever is the root cause and then leaving it too late before asking for help.  For the manager it may mean confronting someone more senior about unreasonable expectations or unreasonable behaviour and in this instance it would be helpful to gather information that can be used to help make their case.  Colleagues may be able to help in this situation.
For the business owner, objective analysis of the business from a turnaround and transformation advisor may help to clarify exactly where the weaknesses are and then working together to devise an action plan that will address them.
Just sharing a problem can often reduce it to more manageable proportions and help to restore both perspective and a sense of having some control over the outcome.

Restoring equilibrium

But this is only part of the recovery and restoration strategy. The traditional strategy of simply cutting costs may address short term financial problems but it ignores the social ones. Cost cutting as a solution often makes people feel vulnerable and can have an adverse impact on people without whose support the business may not survive.
There needs to be some kind of plan to manage the daily work flow and tasks so that the problem does not arise again. This is where staff engagement is crucial especially as negative pressure affects morale as well as behaviour.
Finally, in order to properly recover from a period of extreme negative pressure it is important to set aside time for people, to value employees and their effort, to make sure they as well as their managers are taking time off. The negative pressure may have been temporary but it will have affected everyone so that restoring a sense of balance means taking time to reassure everyone that things have changed for the better.
(Image courtesy of cooldesign at FreeDigitalPhotos.net)