By Michael Jacobsen, Entrepreneur, Producer, Author
It is quite common for colleagues at work to have disagreements. In fact, just like a marriage, arguments can often make for not just a healthier workplace, but a more successful one. These might be over the format of a report or the right marketing strategies going forward. This can often happen when different skills and focuses are brought to the table, often with one focused on creative development, and the other on execution. Both are essential to the business but the two often don’t parry.
Many entrepreneurs have experienced this sort of disconnect when it comes to dealing with their financial advisers, like their accountant. They might have a great idea that will bring in customers: a new product or service that could be flying off the shelves. Their accountant, on the other hand, might see this as a bad idea, particularly if each customer isn’t profitable and more customers means bigger losses.
By way of an example, I worked with one SME (small and medium sized enterprise) last year, a health and wellbeing company. The entrepreneur found that the new massage treatment was going down well with customers and thought it therefore made sense to expand this offering. The accountant, on the other hand, thought the opposite. In his eyes, each treatment wasn’t generating enough of a profit to make the expansion plan viable and it would have put the business firmly into the red.
This is a common issue. Much of an entrepreneur’s success is down to their ‘blue-sky’ thinking. By their very nature, they tend to be innovative and creative and often find it hard to keep their feet firmly on the ground; which is where a trusted business adviser can come in. Accountants, for example, can do so much more than just crunch numbers, and are increasingly becoming the go-to people for business advice and helping business entrepreneurs with business planning and execution.
One of the challenges though is ensuring the right tools and processes are in place to help the two sides collaborate easily and efficiently, to ensure the right business decisions can be made. Entrepreneurs and their accountants often speak very different languages; one will often work on intuition and gut feel, the other based on facts. They are both essential parts of the business, but like any well oiled machine, they need to work in harmony for the good of the business.
Recent research by Exact lent weight to this, finding that, due to this disconnect, many entrepreneurs are often falling to keep a proper check of their finances, forgetting to invoice for thousands of pounds. The research found that one in five SMEs in the UK has forgotten to invoice for goods and services at least once; 12% admitted to forgetting to invoice for a job worth between £5,000 and £10,000 but for 6% of SMEs, this forgotten invoice was worth over £10,000.
With better communication and processes on both sides, business advisers can help direct and amplify the innovative and inspirational ambitions of their SME clients, and entrepreneurs can get the advice they need to better plan and execute their business.