A good accountant?

A Good Accountant?

I don’t know about you, but for me having the facts before the fluffy stuff works well.  My last article talked about what makes an accountant good.  I thought I would take a few minutes to give you actual examples of what a good accountant can do. 

A client came to me with a big tax bill recently.  He couldn’t afford to pay it so he was going to take his pension for the lump sum.  Now I know enough about this stuff to know there are two ways he can do this.  If he drew his old occupational pension scheme from his employer, he would have to take the income as well.  All taxed at 40%.  If he changed this around a little, he could take enough out to pay his bill tax free and not take the income until he retires, saving him at least 20% tax.  I worked with a financial adviser to put the plan into place and the client is saving at least £2k a year in tax.   

Not my job guv, but I did it anyway. 

Another client was talking to me about how he wasn’t making any money from his business.  We delved into a bit and found out that he was closing 100% of his sales.  Everyone he sat in front of said ‘yes’.  He thought he was good.  I thought he was cheap.  So, we implemented the simplest cost strategy known to man.  Every time a client said ‘yes’ he ups his price by 5% on the next quote.  He does this until people start to say ‘no’.  A year later on he is charging 30% more and has found his sweet spot in which he still closes nearly all of the clients but makes 30% more for the same work. 

You don’t spot that unless you know a thing or two about business, not just accounting as that tells you to switch the lights off and increase sales.

One of my clients had spent years building his perfect business.  Its great and he is doing great.  His is an ‘expert system’ that he gives to his lads to deliver jobs the way he wants them delivered.  We spent a couple of days working through what he had done over the last couple of years, packaged it up and sent it off to a Research and Development specialist.  At the time of writing we are two weeks away from him getting a cheque for thousands back from HMRC.  Better still, he is about to save that amount every year going forward until the project is finished. 

I can’t and won’t pretend that these are all my ideas by the way.  I have borrowed nearly everything I know, but that’s what you want, a wide and varied experience that you can benefit from. 

Another client came to us recently with their business is a mess.  They are complicated and their old accountant just moved the money around to avoid doing the hard yard.  I didn’t.  My team and me have spent months systemising what they do to make everything add up properly.  Now, I underestimated how hard this would be so this is entirely at my cost.  I have a client for life, that’s good enough.  We will make money next year. 

The accounting game is all about relationships.  There is a good chance that in a few years the software will get good enough to take care of most of what we do on a daily basis.  It isn’t there yet, but there are people out there spending a lot of money trying to make it so.  The only thing bigger than their development budgets are their marketing budgets, which they spend trying to convince you they are already there.  When they do get there, it isn’t the accounting you will need, it will be the insight and the real-world advice you will want.  In short, a relationship with a trusted professional. 

A client who worked as a freelancer came to us disappointed at the size of his tax bill.  He had been taking every penny out of his company and spending it or investing it in his own name.  No-one had ever, ever told him it didn’t have to be this way.  Re-structure a bit and the tax bill plummets.  Legitimately.  Without risk.  

On this subject I know a multi-million-pound building business, one of his accountant’s biggest clients who had never mentioned the things he could do to reduce his tax bill.  Madness.  All that being said, you don’t know what you don’t know, so even if it’s not my job to fix something for you, I should always have an eye on everything you do. 

Final example, or I would go on all day.  A client we know well has quite a trendy business, everyone wants to do it.  When sitting around doing nothing last weekend I spent a couple of hours researching it.  Turns out that some of the biggest YouTube channels, making at least 10’s of thousands a year in his exact market.  So, in the near future the client will be doing their day job, filming it and building a YouTube channel.  The nice thing about stuff like this is it drops almost straight into your profit pot, or as we like to say onto your bottom line. 

In short, your accountant should be the first person you speak to about anything.   

Legal issue, unless you already have a lawyer you love like a brother, start with your accountant. 

Sales issue, start with your accountant. 

Advice on product development, start with your business accountant. 

Pricing, start with your accountant. 

Accountancy issue, funnily enough, start with your accountant. 

Cheers, 

Tony