Often, people are surprised when their accountants are a little tight-lipped on the subject of offering “business advice”.
The purpose of a business is to make money. And, because accountants deal with the pennies and pounds of a going concern, many people believe that these same bean counters are also savvy business people.
What is meant by “business advice”?
“Business Advice” is a term as broad as cakes.
“Can you bake a cake?” can be broken down to:
- The type of cake
- How fancy it must be
- Must it be sugar-free?
- Will you be using a ready-made cake mix, or preparing everything from scratch?
Well, business advice is the same. It breaks down into many aspects.
But let’s not get overly pernickety here: If you’re going to your accountant for business advice, you’re likely referring to financial advice.
Business advice regarding financial investments
It’s important to understand that accountants are not financial advisers, per se.
The job of a financial adviser is a broad one, and special qualifications are required of people who want to offer services in this field.
A financial adviser must be able to consult and offer professional advice in matters of investment, estate planning, portfolio management and other advanced topics.
Being an accountant does not immediately qualify someone to offer financial advice of this nature.
That doesn’t mean accountants can’t offer a financial advisory service. Many, in fact, do.
An accountant’s primary job is defined by the word itself
An accountant’s job is to account for your assets and liabilities.
A bookkeeper’s job is to assign and discover meaning in the values written down in your ledger.
Twenty quid sitting in a ledger says nothing until some meaning is assigned to it such as “Invoice Receipt”, “Refund”, “Bill Refund”, etc.
Once meaning has been assigned to values, various accounts must be prepared and sent off to the appropriate authorities.
The preparation of these accounts and reports requires expert knowledge, and that’s what an accountant’s primary function is.
The best accountants do offer advice
The world is full of accountants.
In a recent study, it was discovered that there are more accountants in the UK than there are hairdressers.
If there are a thousand stores selling apples, and all the apples look “pretty much” the same, distance and minor differences in the product are the only things which could affect someone’s ultimate choice of where to buy those apples.
Out of a thousand stores selling apples, maybe twenty of them are in your neighbourhood. Perhaps four of them are within walking distance. One of them sells the best apples around, but they charge ten times the price. That leaves three sellers. Those sellers must remain within each other’s price range to stay in business.
And so prices go down — or the quality of apples goes up and prices stay high for those apples only (a.k.a. a “Premium Service”).
Well, the internet has changed the fact that there are only four stores within walking distance of your humble abode. If you had to choose between 1,000 accountants today, it wouldn’t matter if those accountants are right next door or if they’re operating from the northernmost reaches of the UK.
People seeking accountancy services now look for two things:
- Apples vs. apples
- Premium Service — shiniest, brightest, most delicious red apples around which, if you rub them the right way, might even exude a bit of magic.
In accounting, that premium service falls under the heading of business advice.
In any business, you have to go the extra five miles
As an award-winning accountancy firm, we learned long ago that Accounting needs a personal touch.
There are enough number-crunchers in the world. We felt it was necessary to give people something more.
Money can be an emotional subject. It’s not only about the profits, the cash-flow, the assets and liabilities.
Behind every business, there is a person trying to achieve a dream, or perhaps trying to fend for their family; or trying to pay for that extra little holiday to the Algarve the following year.
We have seen, too often, accountants adopting an attitude toward a client’s finances that is too impersonal.
In any business, you need to go the extra mile — or the extra five miles — to stay in business.
Business advice from eCommerce to tax to specialised software
The answer to whether or not your accountant “should” or “does” offer business advice is a question which must be worded slightly differently:
“Does my accountant go the extra mile and invest in additional tools and training to help my business, so as to improve my profits and therefore retain me as a client?”
Going the extra five miles: It’s simply the best way to do business.
We have specialists at our firm who can consult on everything from eCommerce software to inventory software and, of course, to tax itself.
The other nuance to the word “account” is that it infers some degree of responsibility.
From “account” we get the word “accountability”. An expert accountant must consider themselves accountable for the success of their clients’ businesses.
Success breeds success. And, in these unprecedented, difficult times which we are currently facing, it well behoves us all to give other businesses a hand in getting themselves back on track.
So, do accountants give “general business advice”? Well, the best ones certainly must if they want to stay in business.
Shoaib Aslam is the co-founder of Pearl Chartered Accountants, a UK-based chartered accountancy firm that has multiple locations across London. They are experts in helping startups and established businesses with all aspects of growth, strategy, scaling up, accounting and tax planning.