“a process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer”.
Accountants and Accounting are fast becoming a computer algorithm, the reason why this is occurring is to do with the structured, ruled based environment that Accountants work within. Computers are just making the process faster.
Like all businesses in our economy Accountants need to look to the future and visualizing what an accountant needs to deliver to add value to their clients.
As we all know visualising the future is difficult, fortunately for accountant’s, Business Owners specifically (owner operators) have been starting to ask important questions of their accountant.
Where has my cash gone? Why am I making a profit but I have no money in the bank. What is Gross Margin? If I want to expand where can I source money?
These are the great questions that many business owners need to ask their Accountant / Business Advisor. So here it is at last, the topic that is really becoming the centre of discussion between Accountants and Business Owners.
Are you my Accountant, Business Advisor or both?
How can you be my Business Advisor?
When I am asked by a Business Owner why would I pay you to be my Accountant, when I use Xero to do my own accounting?
I become worried about the issues that are occurring in the Financial Ledger that the business owner does not realise have flow on effects.
In New Zealand, our Tax system is woven in to the fabric of our accounting software, how we depreciate assets, how we handle Entertainment Expenses, what expenses have GST and how we remunerate ourselves. If you do not understand how your Accounting System is interacting with your add on applications you may have issues sitting in the Balance Sheet.
Accounting software uses Algorithms, algorithms need accurate information to operate accurately.
Remember. “Garbage in – Garbage out”
What this means for you as a Business Owner is before you can receive useful information from your Business Advisor about profitability, growth or strategic direction you need to give your Advisor accurate Financial Statements.
Our next Blog will be on Accurate Information.
Stewart is the Founding Partner at Good for Business, Accountants & Business Advisors.
As a Chartered Accountant and MBA graduate, Stewart gives business owners clear insight into their business built on his experience as a Chief Financial Officer and Financial Controller in some of New Zealand’s Iconic companies.