Guest blog post by Karen Reyburn of The Profitable Firm
Last month I wrote a guest blog post for my friends at My Accountancy Place because we are so thankful for them, and how they help our business.
One of the things I mentioned was that I know what it’s like to have an existing accountant who is okay, and gets the job done, and doesn’t charge much, and you feel bad leaving them.
As I mentioned in that post, I don’t feel bad anymore. I wonder why I didn’t do it earlier.
But for those of you who have an accountant already who is “pretty good”, and you don’t really see a reason to switch, I thought I’d share a few thoughts from my own experience. Here are some reasons you don’t change accountants:
1. Your current accountant charges you nothing (or not much)
The first accountant I had was a local firm, very small, literally around the corner from my flat, in the small town I live in. I had a photography business, just a small income in addition to a job I held at the time. It wasn’t a big deal, just a few forms to fill in and maybe £8-£10k each year. He actually did my accounts for free because I’d brought him a really big account through a company I knew. I even tried to pay him, and he said don’t worry about it, no problem.
Of course, the problem then became that as my life and my businesses changed, my accounts changed too. And instead of just a quick tax return with a small payment or even a refund, it was becoming more complex.
What I came to realise is that if you don’t pay much for your accountant, you don’t get much either. You can’t really push them on anything, because they’re doing you a favour. You can’t chase them to get the accounts done early, because the fee is so low. And after a while I realised that my accountant charged me nothing….but I got nothing (or not much) for it.
You like that your existing accountant is local.
I always liked that my accountant was ‘just around the corner’. I could pop round and see him anytime (their offices were right by the train station), and if I had to drop something off it was easy to do.
But when I started the changing accountant process I realised that I had only seen my local accountant in person twice in a full year. That’s because we would do business by email, or I’d ring him up, or text him, and also because most of the time when I thought to stop in it was past 5pm or before 9am. Or it was lunchtime and the office was closed. Or it was open but he was away when I passed by.
When I switched to My Accountancy Place, I’d already seen them more than my previous accountants and they’re a four-hour drive from my house.
2. You think it’s very expensive to have someone that good
That’s true – it is more expensive when it comes to pounds and pence. But I had a situation with my previous accountant in which I got a £10,000 tax bill nine days before it was due. I had to scramble around for the money, wipe out my savings account, practically beg and borrow from my own company – and I managed to pay it, but at what cost? That was the money I had set aside for a house deposit – and it set me back for almost a year on buying a house.
So, it might be a bit more expensive to hire a really good, creative, helpful accountant who goes far beyond just churning out your accounts and tax. But is that more expensive than the incredible strain and stress and fear and frustration that I went through in that nine day period before the 31st of January?
This year, my accounts were done and dusted by July. That’s a good six months earlier than last year, and not only did the guys at My Accountancy Place do everything possible to get the most recent accounts done so I could arrange a better mortgage, but now I know how much my tax bill will be, and can plan accordingly. No more last minute panic.
3. Your current accountant is a nice guy. (Or lady.)
The biggest reason I held back from making the switch was that I liked my accountant as a person. He’s nice. I would pop in and we’d have a chat and he’d ask about how my family were doing in America and how things were going. He was trying to run a successful business and although he was swamped and busy and always a bit behind, he’d always take the time to meet with me if I came by.
But no matter how nice someone is, you hire them as an accountant because you need things done. Accounts. Taxes. VAT. Questions about auto enrolment or hiring people. When I looked long and hard at the true situation, I realised that he’s a nice person who was not the best accountant for me and for my business. You don’t hire nice people – you hire the best people. And then you can hang out with nice people as friends, if you want to.
4. History, and guilt
My first accountant was there for me from the day when I had a few hundred quid coming in for my photography business, and just needed to fill in a little form and get some money back. He never charged me anything (as I mentioned above), so I felt guilty leaving without paying him anything.
But along the same lines as ‘he’s a nice guy’, staying with an accountant because he was there for you in the beginning is not the right reason. He (or she, or they) need to be there for you all the time. When your business is small, and when it’s huge. When you are on your own, or when you have 100 team members. When you’re a sole trader, or a huge limited company with complex product lines. Don’t stay out of guilt.
5. Presumption
For years I thought, “This is fairly ridiculous that all my clients are accountants, but my own accountant isn’t really coming through for me.” But I presumed that if I had a client of mine dealing with my personal accounts, and the various accounts of my business, it would be a conflict of interest, so there was no way around it. I figured that I needed to keep the two separate somehow.
What I’m discovering is that you choose an accountant because they’re the right person, the right firm, providing you with what you need. If they happen to be a client as well, then both of you get to discover what it’s like being a client of the other, and both businesses grow.
The key is that I didn’t hire My Accountancy Place because they are my client. That’s bad and backwards thinking. You always hire the right person, the right firm, with a complete and full willingness to pay cash money for whatever their fees are. If it turns out that you invoice them some and they invoice you some every month, so be it. But you’re not cleverly crafting a package around ‘saving money’ – you’re hiring the right accountant who just so happens to be your client.
In our case, we asked Paul to give us a proposal like he would with any other client, and he did. And we reviewed it as we would any other supplier. We didn’t hire them because they’re our clients. It just happens to be a nice bonus extra, because we talk to them all the time anyway.
6. You don’t realise how good it can be
Once I made the mental decision to switch accountants (that £10k tax bill was the last straw), I started thinking about all the things that frustrated me about my existing accountant. Things like:
He didn’t speak my language.
He talked numbers and spreadsheets and due dates and accounting terminology. What I cared about was:
- Knowing how much tax I have to pay ahead of time (and paying the least possible while still having integrity)
- Having the cash in the bank to pay that tax without stress
- Making a profit that I actually see in my bank, not on paper
- Not being stressed
- Feeling like I really understand my numbers, not just guesstimating them in my head all the time
- Getting some time off to enjoy my life
- …and doing all of this while giving my clients the best possible service I can.
He didn’t encourage me to use the latest technology.
I was the one telling him about Xero, and live chat, and websites, and anything modern. I remember mentioning Xero online accounting to him a few years ago, and he said “Oh, this is a fad, there are so many of these, I’ll look at it someday”. I’m guessing he’s still looking at it – but Xero quickly became the foundation to all our business accounting and numbers. We wouldn’t dream of having an accountant who didn’t understand and use it.
He didn’t use a Mac.
It sounds a little silly, but it’s reflective of the bigger picture. It’s a culture thing – how we do business. When Paul decided to get a Macbook, he was texting me on a Friday night asking about whether he should get the Macbook Pro or the Macbook Air, and what I thought about the retina display. That’s the kind of thing I would never talk to my old accountant about.
He wore suits and ties.
Even for a small accountancy firm across from a train station, located in a converted old house, he’s still in a shirt and tie. I fully support looking professional, and it’s not even the suit and tie itself – it’s the combination of that with the PC and the outdated technology and the desktop software….when I showed up in jeans, I felt like he didn’t understand.
He was always in a rush.
Every time I went to see him he was busy, and it never got less busy. He was always surrounded by paper and files, and would struggle to find what he needed. When I would ask how he’s doing, he’d say he was swamped, or tired, or wished he could have a few days off. As a result…
I hated to bother him.
If something came up that worried me, or if I needed to know the VAT rate for a product, or I was thinking of buying a new laptop and wanted to buy it at the right time, I felt I was getting in his way by asking. I also didn’t really trust that he will give me the best advice, because….
He always advised me to save money or do the thing that was the cheapest.
That bothered me. I found that I didn’t trust him to give me the best advice, because I find myself thinking, “But what if there’s another way he doesn’t know about? Or, what if something that is more costly this year would have saved me a lot more five years down the road?” I remember one year he advised me to go limited so I could save about £700. He said, “That’s a flight to America!” And I thought, “..but what if I do that and it costs far more than that, or the tax rules change?” And that was when I realised that if you can’t trust your accountant to give you the best advice, it’s time to change.
The biggest thing I learned is that changing accountants may seem fraught with difficulty and challenge, but if you don’t have the best accountant now, all that difficulty and challenge will go away, and will be replaced with helpfulness and better profits and good advice…and, of course, Starbucks coffee and Digital roundtable events.
What’s not to like?
Choosing the right accountant is crucial for both your business and personal finances.