Part Accountant, Part Advisor

Today’s business accountant wears two hats – ‘bean counter’ and ‘business advisor’. The new breed of accountant can deliver good all-round advice on a wide range of business issues, as Patricia Moore reports.
Business start-ups without an accountant in the team from the word go are courting disaster. While there may be few beans to count in those early stages, a qualified accountant needs to be on board to make sense of the numbers and help with business and finance structures, as well as issues around compliance and tax. A company’s accountant should also have the expertise to provide advice that leads to business growth.
“It’s an old adage but you don’t know what you don’t know,” says Michelle Malcolm, associate principal, business advisory, at WHK. “The guidance and advice of a good accountant in the critical early years can help set you up for success. The failure rate of new businesses in the first 12 months is alarming and partnering with the right accountant can make all the difference.”
An accountant is one of four professional advisors every start-up owner needs – a business funder, an insurance broker and a solicitor complete the quartet – as illustrated in the BDO Professional Quadrant, says Andrew Hill, a BDO Auckland partner specialising in business advice. He likens starting a business to going on a journey. “Just as a travel agent ensures you have the right information and necessary visas, and knows what to expect in an unknown country, your accountant provides a level of direction to ensure each stage of the business development journey is fully understood.
“This includes elements such as helping set a realistic direction and strategy, and exploring financing options, through to ensuring clients understand how to maximise profits and minimise risk. The business environment is increasingly complex and sophisticated and without this level of expert support a start-up business owner is extremely vulnerable.”
Today’s accountant may more often be referred to as a ‘business advisor’, rather than a bean counter, but they’re there to do both, says Terry McLaughlin, chief executive of the New Zealand Institute of Chartered Accountants. “They’re counting the beans and making sense of them. That’s the key. Analysing and helping to understand what the numbers are telling you. What are the things you need to focus on? Are your gross margins looking good? What’s your sales plan? What’s your key customer relationship looking like? How are you going with the bank? Any staff issues? A good chartered accountant can give you good all-round advice on all of these issues.”
It’s an important business relationship so it’s important to get a good match; that calls for rather more effort and research than simply referring to the local directory. Hill highlights three key areas:
• Rapport: “Make sure you click. You’ll be sharing a lot of information so you need to feel comfortable.”
• Value for money: “You don’t need a bulldozer to crack a nut so make sure you’re getting the range and level of expertise that’s appropriate for your business needs, at an appropriate price.”
• Trust: “A good accountant will give you a sense of this by asking a lot of questions in order to gain a genuine understanding of your needs and goals. Likewise they should welcome your questions.”
McLaughlin advises choosing a member of the NZICA; with around 33,000 members (not all in public practice) he says it would be a pretty small town that doesn’t offer a choice.  
A chartered accountant will have spent seven years training and will undertake 40 hours of professional development annually. They are also bound by the NZCIA Code of Ethics.
McLaughlin’s advice also includes:
• Word of mouth is invaluable. Ask for referrals from people with similar business needs; as well as same-size business, and the same or related industry at a similar growth stage.
• Compile a shortlist. Ask for references and follow them up. What does the accountant/ business adviser do for them? Do they deliver on time; is the price fair; are you dealing with the same person or being passed around the firm? Is the business growing as a result of their advice?
• Make a date. “It’s about establishing a relationship,” says McLaughlin. Arrange to meet with the top few contenders and ask the serious questions – what do they know about your industry? What services can they offer you – and what will they cost? Is their accounting software compatible with yours? A personality match is also important. If you’re risk averse, you’ll probably feel most comfortable with a conservative, rather than entrepreneurial, accountant.
“An accountant needs to do more than prepare financial accounts and tax returns in order to understand the fundamentals of business success,” says WHK’s Malcolm. “Check that he or she meets with business owners regularly at their premises and has a sound knowledge of your industry so they can advise on improving financial performance.”  
Start-up businesses on the fast track to success quickly require
more than standard accountancy services and a large firm may be in a better position to offer clients a more diverse range of services.
“Ask how they can help as the business evolves, grows and prospers. In particular, ask about contacts and networks, particularly if your growth plans involve export markets,” says Malcolm.
What a chartered accountant (CA) doesn’t need to do is become involved in the bookkeeping. A business needs to have a tidy back office, says McLaughlin. “Cashflow’s king and you’ve got to get the bills out. Invoicing, billing, banking, paying creditors, that’s not the sort of thing you want your chartered accountant to do.” And, thanks to the availability of business software, the days of throwing stuff in a shoebox are long gone, he says.
“The interaction with your accountant has become more worthwhile because you’re using them to add value, to do the fine tuning in the accounts area, get your tax situation right and sit down with you to do some forward planning.”
Varied expertise
Accountancy services now encompass a breadth of expertise ranging from IT support, tax planning, risk assurance and internal risk assessment through to corporate finance, forensic services and entrepreneurial and growth strategies.
At a national level the NZICA provides ongoing professional development programmes for members and carries out sector-specific research to inform new advisory approaches.
“This is also happening at an individual firm level,” says Hill, citing specialist training programmes developing expertise in issues relevant to key sectors such as the Emissions Training Scheme.
“Family business is another key sector focus for us and we’ve worked in collaboration with Australia to carry out ongoing research into the challenges and needs this sector faces and how best to support its growth.”
In spite of ticking all the boxes when it comes to choosing the right business advisor, it may not always be a match made in heaven.
Hill says, “Move on.”
Malcolm’s advice is “challenge or change. There are lots of good accountants who would be more than pleased to partner with you to ensure your business is successful.”
The NZICA’s McLaughlin says situations in which the Institute becomes involved are often around a misunderstanding on the scope of the work. They find the vast majority of issues can be resolved pretty easily.
“We have a guy here I describe as ‘the ambulance at the top of the cliff’. It’s another benefit of choosing one of our members. You get that service sitting behind it.”

Patricia Moore is an Auckland-based freelance writer. Email [email protected]