Business Owners Profit Guide

Business Owners Profit Guide: How to get more out of your accounting service

BUSINESS OWNERS PROFIT GUIDE

LEVEL 1 959 GLENHUNTLY ROAD CAULFIELD SOUTH VIC 3162

PHONE: 9571-0130 FAX: 9571-0136

EMAIL: lawrenceg@goldpats.com

www.goldpatslawrence.com.au

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Business Owners Profit Guide: How to get more out of your accounting service

HOW TO GET PROFIT CREATING INFORMATION FROM YOUR ACCOUNTING SERVICE

How to get vital “insider information” About your own company from monthy accounts

Your company is constantly creating both positive and negative trends – learn how to locate and handle each immediately

Learn how MUCH more you can get From your accounting service

The one and only guide in understandable English for business owners, giving “inside information” on how to get SO much more out of the accounting service that you’re already paying for!

Learn how to define your true wishes And needs and how to do financial Planning the easy way

Learn how to evaluate and compare accounting services and how to Demand the best service from an accounting firm

BONUS SERVICE: Get your FREE Client Requirement Analysis

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Business Owners Profit Guide: How to get more out of your accounting service

TABLE OF CONTENTS

The purpose of this manual

3

Amazing difference in benefits between accounting service

7

How to read and use this manual

12

Common misconceptions and beliefs about accounting

14

Task and purpose of accounting

21

Common complaints about accounting services

28

What a tailored accounting service can do for you

36

Increasing your profit

38

Utilising opportunities and your true abilities

48

Nipping problems at bud

51

Learning practical financial planning

60

More control over the future of your business

64

Sleeping and breathing easier

73

How to evaluate and compare accounting services

76

Thank you and the best of luck!

86

Client Requirement Analysis

88

Tips on changing accounting

90

Contact information

97

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Business Owners Profit Guide: How to get more out of your accounting service

THE PURPOSE OF THIS MANUAL Thank you for purchasing the business owner’s guide to evaluating and comparing accounting services!

Your trust means much to us and we believe you have made a good choice.

The purpose of this manual is to show how to get much more out of the accounting services — to get more exchange for the money that you’re already paying for the service.

We will show you how to define what type of help would benefit you in your specific circumstances and how to ask for that help from your current accountant.

From this manual, you will also learn how to choose an accountant or accounting firm to do your monthly accounts for you.

You will gain insight into how one can EVALUATE different accounting services and COMPARE the firms or accountants offering those services so that you can choose the one that is most likely to satisfy your wishes.

We will also look into cost of accounting services. However, as you’ll see later on, the RESULTS of the service are by far more important than the actual monthly cost. The right type of service can help you immensely in your efforts to increase income and profits.

Thus, accounting services and quotes for these can rarely be compared just based on the monthly cost.

The important part is the contents of the service, the availability of advice and the help you get in UTILIZING the information the accounting firm provides for you on monthly basis.

On the pages of this manual, we hope to prove to you how HUGE the difference in RESULTS can be depending on which type of service you receive and/or demand from your accounting firm.

Whether or not you currently have an accountant who is able and willing to deliver accounting services so you obtain these benefits explain in this manual is not the point. KNOWING these benefits is the vital element so that you are able to DEMAND the best type of service.

Only few accounting firms deliver this level of service and you need to know how to recognize those that do.

Mind you, it doesn’t necessarily mean the service would be more expensive.

But it does mean it will be decisively more beneficial for your company.

Thus, the purpose of this manual is to give you the full picture of what you can get out of your accounting service.

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Business Owners Profit Guide: How to get more out of your accounting service

Some of it is guaranteed to be known to you already. Some of it is very likely to be totally new to you. And much of it will give you new ideas on how you could make your own job easier.

Armed with this knowledge, you will set and reach goals faster and easier.

Whether or not you decide to USE this information is wholly up to you. There’s no intention to force it on you in any way. Only YOU can choose the time and place for when to use this knowledge. By simply HAVING this knowledge you’ll begin to find financial decisions easier!

But, please, read this manual from the viewpoint of “how could I use this information to get ahead in business.”

It was written for owners of small-to-medium sized businesses as a guide to getting their moneys’ worth from accounting services.

There’s no intention of finding faults with either business owners or accounting firms.

Whatever problems we discuss in this manual, we do so with the idea of helping business owners and accounting firms to communicate better and improve cooperation into an even more mutually beneficial direction.

This manual is a guide that any business owner or executive can use to get MUCH more out of his accounting service. As you’ll see through the manual, the difference can be quite dramatic in terms of benefits and results.

KNOWING these things is the first step.

It will help you to see your particular needs.

Then it comes down to USING the information to ensure you find and get this type of accounting service.

We give the information, you decide if you use it We understand that you have purchased this manual because you want to get more out of the accounting service that you are already paying for.

This information is given as a basic tutorial on how to evaluate and compare accounting services.

But, what’s more important, it is also the first step in defining what type of accounting service YOU want and need.

And, to really be able to define what you “want and need,” you must first learn the possibilities that are available in terms of accounting services.

The unfortunate reality today is that very few accounting firms will take the trouble of explaining these things to you... or, if they do, many will use professional accounting terminology to the degree that makes it practically impossible for a non-accountant to understand.

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Business Owners Profit Guide: How to get more out of your accounting service

So, it’s really up to YOU to know what to ask for and for that you need to know how to define your needs... and for that you need to know all that you COULD get from a high-quality accounting service.

Whether you use this knowledge — and how you use it — is totally up to you.

The purpose of this text is to inform you about the true potential of accounting services, giving useful tips on how you can ask for specific services and information from an accountant, whether your current one or a new firm.

We advise neither for nor against changing accountants. We simply tell it how it is, without any knowledge of your personal situation. It’s up to you to decide how you use the information and whether you use it.

If you find that your current accounting service does not provide the benefits you want, the first thing to do is to communicate with the accountant and explain what you want.

You would probably consider looking for a new accounting firm only if the current one fails to produce the changes that you request OR if you’re presented with an unrealistic quote for these essential improvements in service.

But whatever your circumstances, the worst thing to do is to be satisfied with a service that’s not per your requirements.

For that purpose — finding out exactly what to ask for — please take advantage of the Client Requirements Analysis bonus service that comes as a free bonus with the purchase of this manual.

Simply contact us for setting a telephone time for the Client Requirements Analysis. Done on the telephone, it only takes about 20 minutes. It’s very interesting and, due to the certainty it delivers, it’s time well spent.

This service does not necessitate a change of accountants in any way and it is guaranteed to help you define precisely what kind of accounting service would serve your individual needs and wishes, proving the benefits you’re looking for.

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Business Owners Profit Guide: How to get more out of your accounting service

Taking your side but not against any accounting firm The intention of this manual is to speak on the behalf of better accounting service and from the clients’ viewpoint.

For any meaningful analysis, we have to look at the positive AND negative aspects of accounting services, accounting professionals and, to a degree, also some basic mistakes of businesses in how they use these services.

In the final analysis, you’re probably PAYING for accounting services already at this moment.

So, let’s see whether we could make that investment give you MORE and BETTER benefits than what it currently does.

Thank you again for purchasing this manual... and welcome to the adventure!

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Business Owners Profit Guide: How to get more out of your accounting service

AMAZING DIFFERENCES IN BENEFITS BETWEEN ACCOUNTING SERVICES There are many reasons why accounting isn’t exactly the most interesting subject in the world for a business owner.

For one, accountants tend to be quite technical about their subject, making it all but impossible for a layman to understand without having to study the subject.

For the other, businesses are OBLIGATED to keep books on their financial transactions, which doesn’t help to make us like the accounting. Add to this taxation and tax authorities and we can see how it’s not uncommon to dislike the whole subject.

Usually, a business will do only the mandatory parts.

As you know, these mandatory accounting actions are called compliance services by accounting firms, including actions such as the keeping of books monthly, yearly accounts, filing taxes, payroll, employer fees and so on.

Yet another thing making accounting somewhat of a “strange” subject concerns the way it describes the activities of your company with numbers and figures alone. Where you have grown accustomed to seeing living people, physical spaces and action, the books merely note down figures.

These figures are the symbols of those physical things and actions within your company. But it’s quite hard to recognize these things from those figures.

And it’s much harder to see where those existing figures are pointing, how each figure and part of your company influences other figures and parts... and where it is all leading.

Most of us have tried to make sense out of spreadsheets and accounts at one time or another.

And most of us found those figures more confusing that we’d have liked to, making it less than pleasant to try again.

So we grow sceptical and begin to consider all accounting firms and their basic services as uniform: “They’re all the same — once you’ve seen one you’ve seen them all — so why change accountants... or why bother asking for a better service from the current one?”

Yet the differences between various firms are huge.

In this manual, we aim to show you how to spot the differences between various accounting firm services.

The differences are much bigger than what is commonly known in terms of the BENEFITS for the client — you.

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Business Owners Profit Guide: How to get more out of your accounting service

Current reality of accounting services — the law of demand and supply The basic compliance services of the average accounting firm do not contain any additional services on top of those mandatory bookkeeping actions required from your company by law.

The norm for most accounting firms today has become to perform these actions routinely, with the emphasis on doing the work... as opposed to briefing YOU on what the figures show.

In fact, the way most accounting firms perform those very basic bookkeeping actions creates a problem in this respect; the information available from the basic accounts is not very in-depth.

In other words, even if you requested to get a briefing on the monthly development, the way accounts are kept won’t give as much information as it could IF the service was geared up for such briefing.

In all honesty, we can’t blame only accounting firms for this. It’s one of those “which was first, an egg or a chicken?” -things, brought to existence by decades of interaction between companies and accounting firms.

Due to the narrow utilization of accounting services, business owners have been looking for the lowest quote for decades. Due to the lack of demand for more in-depth monthly analysis on financial figures combined with shopping of the lowest bid, accounting firms have stripped the basic services down to bare bones.

Little by little, the laws of supply and demand — or, demand and supply, whichever angle you want to look at it from — chipped away from the accounting service.

It’s not necessarily fruitful to try to figure out whose fault this development is. That’s just how things can develop sometimes.

Paradoxically, at the same time, many accounting firms created highly advanced ADDITIONAL services to offer to their clients. These services were created for the very purpose of delivering financial consultation in form of analysed and accurate information from which one can deduct future trends and find the cause of any problems (or upward trends).

Of course, accounting firms soon found that very few business owners showed any interest toward these additional services.

Why would they be interested, come to think of it?

Naturally, a business owner isn’t likely to get very excited about an ADVANCED service when the BASIC service doesn’t seem to deliver much on top of “taking care of the mandatory business of keeping the records.”

During the past decades, the reality of accounting services being skimped down to the minimum has backfired; it benefits neither the business owner nor the accounting firm.

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Business Owners Profit Guide: How to get more out of your accounting service

The image — and indeed, the usability and value — of accounting services has gone down.

Today, few business owners believe their accounting firm could really be of much help in the dayto-day managing of the company.

And yet... that’s exactly what it could — and should — be.

Accurate prediction producing reliable information for decisions Today, accounting service is seen as a necessary evil of little or no value.

Yet the goal of accounting services SHOULD be defined as something like this: “The active, regular and timely production and presentation of analysed and accurate financial facts to the business owner so he can use this data for easier, faster and more results-producing decision-making for the good of his company.”

“Actively” in that the accountant will contact YOU to give you the information.

“Regular” in that it takes place every month.

And “timely” in that you get the information about each calendar month within a reasonable time period after the month’s end.

“Analysed” in that the accountant goes through your monthly figures with a fine comb, locating any emerging problems when these are still only small... and finding any positive trends as soon as these surface so you can make the most out of those opportunities the company brings forth.

“Accurate” in that he is monitoring several key financial statistics so that cross checks can be made to verify the accuracy of any finding.

In plain English, this means that the accountant monitors your accounts and explains the developments every month in understandable language, helping you to know where to put your attention in order to get the best results for your company.

It might be a problem that’s just emerging, with only the first warning signs visible. In that case, it’s small yet, which makes its handling easy, fast and inexpensive.

Or it might be a positive trend surfacing withing your business activity... and the sooner it is noticed, its cause analysed and plans made (and put to action) on how to strengthen it, the more money this positive development will make for your company.

Along with all of this there should be a short consultation between you and your accountant so that every point can be gone through and so you can ask for his help in devising solutions wherever you deem necessary.

And these are just the basics.

As you can see, it’s something much more than what we’ve learned to regard as “accounting services.”

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Business Owners Profit Guide: How to get more out of your accounting service

This is just a brief look at what a service like this can give you. But the amazing results come from what YOU can do with this information...

Empowering you with knowledge to correct decisions and better results Imagine knowing exactly where your business is going, every month down to the last penny.

Imagine having each sector of your business monitored financially, knowing figures will tell you exactly the right picture without bias or guesswork.

What about having a financial expert at your fingertips, a loyal aide to help you at any time when you need to make decisions?

Imagine how easy it would be to make decisions if you could always be certain that the information on which you base the decision is absolutely correct and accurate.

We commonly believe that it’s difficult to make important decisions.

However, the biggest barrier is not the decision-making itself but the fact that we are not certain whether the information on which we BASE the decision is correct.

If it isn’t or if there’s some data missing or some that shouldn’t be there... well, THEN it’s very hard to make the decision.

Traditionally, financial decisions are considered the hardest. And yet, with this type of monitoring & reporting service by your accountant, financial decisions may well become the easiest of all!

As you read farther into this manual, you’ll find out much more about the positive effects a tailored accounting service can offer to help you do your important job.

Little by little problems are solved almost before they emerge and positive trends get utilized to the fullest. Month after month these soon compile into something very positively amazing.

You’ll sleep better, knowing your company is headed for accomplishment of those goals you’ve set for it. More control, more income and more profit and yet fewer hours spent at financial planning.

Soon enough, the positive results will simply amaze you.

But more of that later on in the manual. For now, let’s just say that the difference in results between accounting services can be absolutely HUGE. And that, in the final analysis, is what the actual cost of accounting service comprises of. It’s not the monthly cost.

An inexpensive accounting service might prove to be extremely expensive in that it won’t give you what you need to make more profit. Reversely, you’re not guaranteed these benefits even if the monthly cost is HIGH.

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Business Owners Profit Guide: How to get more out of your accounting service

It’s not what it costs but the overall effects of the accounting service. And to be able to evaluate this overall cost & benefits ratio of the service, there’s no other way than to learn what to look and ask for.

And that’s what this manual will show you. But for now, keep an open mind — what you’ve perhaps thought of the limitation of accounting services might not be the case with ALL accountants.

There’s more out there and we will show you how you can find it!

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Business Owners Profit Guide: How to get more out of your accounting service

HOW TO READ AND USE THIS MANUAL So you could get the most out of your purchase, here are some important pointers on how to read and use it.

Please read the manual in the correct sequence.

Don’t “skim” through it, don’t jump from page to page and don’t read it in a hurry. Set aside a quiet moment for it and take all the time you need to ensure you get everything out of your purchase.

Each chapter builds on the previous one and each subheading in each chapter also requires that you’ve read the text before it so as to get the full benefit out of what you read.

If you skip paragraphs or chapters, you may lose some data to which the following text then refers... and you’ll lose your way and start feeling irritated with the manual.

We have aimed at making this manual as understandable as possible, avoiding unnecessary technicalities and defining those accounting terms that cannot be avoided.

This information can benefit you enormously but only if you read it carefully and without skipping over anything.

We recommend that you take notes as you read through the manual. This is especially important whenever you notice something you would like to implement in your company. To this end, the manual provides a column marked “Your Notes” to the right of each page.

By making your own notes wherever you get realisations or ideas, you’ll get more out of the manual. You will also later remember these ideas and “remember to...” -pointers that you set for yourself.

We also recommend that after reading the manual, you go over it again after a suitable time has passed.

This way, you’ll get more out of it as it contains a lot of new information and nobody can take in that much at one reading. If you read it again, you’ll notice more useful tips now that you’ve got the basics down.

And, if you run into problems while reading this manual OR when implementing any of the ideas therein, please feel free to contact us. We can and will help you.

Finally, try to look at this manual as something positive and interesting rather than a list of responsibilities or something negative.

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Business Owners Profit Guide: How to get more out of your accounting service

If you do, you’ll find a lot of new ideas on how to create very positive effects in your company and learn new ways to make your work both easier and more productive.

Thank you for your cooperation and the best of luck!

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Business Owners Profit Guide: How to get more out of your accounting service

COMMON MISCONCEPTIONS AND BELIEFS ABOUT ACCOUNTING

The purpose of this chapter is not to claim that accountants are faultless. They’re human just like everyone else and subject to the same variations in skill, expertise, communication skills, and human emotions just like the rest of us.

The point is that accountants are individuals.

The generalisation that “once you’ve seen one accountant, you’ve seen them all” is just as untrue with accountants as any other industry. If you take your own line of business, you know how each business owner within your industry is an individual.

Personal characteristics, expertise, “bedside manner” and other such things define an individual much more than his choice of industry.

By the same token, the choice of one’s industry will have some bearing to one’s personality. And one’s personality will influence the choice of one’s future industry in some manner.

An artist becomes an artist because of his or her highly creative abilities. A person with dexterity of hand and keen interest in complex mechanical functions is naturally drawn to a profession giving those abilities their best arena... and so on.

Using your accountant as a sparring partner in evaluating the feasibility of new ideas To be a good accountant one needs to have qualities such as patience and persistence, willingness to learn new things, mathematical mind and an ability to keep things going.

These skills and abilities make a good accountant. As the “bean counter,” the accountant is also a natural counterpart for sounding any new ideas; the accountant works on the principle of “will this bring in more than it costs?” and, with that aim, can usually bring the financial risks into view in regards to any new plans.

However, this is not all good news.

A business owner is, by nature, a creator of new ideas and projects. An accountant’s role is to question any expenditure just so that its feasibility gets examined and looked into.

This is not the same as opposing every new idea but it can FEEL like that for the business owner.

And in this area we have the first generalisation concerning accountants. It is worded something along these lines:

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Business Owners Profit Guide: How to get more out of your accounting service

“Accountants always resist all progress.”

Admittedly there are some accountants who take their duties perhaps too far and resist ANYTHING that involves spending more money.

And there are those too, who don’t perhaps realise how it’s not possible to PROVE conclusively that a marketing campaign will return the investment put into it.

After all, there’s always an element of SOME risk in business and no one has a crystal ball to see how things will turn up.

But not all accountants are this way. If your accountant makes you LOOK CLOSER into the financial side of an intended project just so it is examined to avoid risk as much as possible BUT, then leaves it at that (once you’ve evaluated the financial aspects of it)... then he is a good accountant.

His role is to guard your coffers so you’ll end up on the profit side on the bottom line at the end of your fiscal year. But he can only do that if you let him. You’re the head of your organisation, the boss.

If you shut his mouth you’ll also lose his help as a valuable “sparring partner” in testing the financial aspects of new projects before possible losses can become a reality.

And it’s easy to get into a generalised way of thinking about accountants in this subject. After all, a business owner is human too and receives lots of criticism from his surroundings. In such circumstances, it’s natural to expect support from those whose salaries you pay.

Thus, it’s good to keep reminding oneself that it’s the DUTY of your accountant to question the financial sense of new ideas and projects.

Some may violate regulations and bring you grief later down the road. Other ideas may lose you money... or then NOT. Whichever, the duty of your accountant is to help you investigate the risks and potential gains of any future project that you BRING TO HIM FOR EVALUATION. Of course, the accountant can influence your future for the better only if you do bring such new ideas for his inspection.

Obviously, the accountant should look into BOTH risks and potentials. Naturally, he should be able to say “YES” and “NO” to various things — saying “NO” to everything is just as unthinking an act as that of “yes men.”

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Business Owners Profit Guide: How to get more out of your accounting service

Either will save one from thinking, evaluating and putting one’s reputation on the line.

So it’s not a bad thing if your accountant advises against something, as long as he doesn’t say “NO” to everything all the time.

Using your accountant to avoid trouble The unfortunate role of the accountant is to be the one who reminds the business owner about many unpleasant things. Every business owner wants to get as much financial advantage out of his company as possible and pay as little tax as feasible.

The accountant is then faced with the unenviable duty of telling what can and what can’t be done in terms of taxation.

And, although the vast majority of accountants strongly dislike having to be the bearer of bad news, this role of his has greatly affected how business owners think about accountants.

One of the most general misconceptions is that accountants work on behalf of taxation authorities or that they are guardians of tax man’s interests.

This is categorically not so.

Those accounting professionals with higher licenses (such as Chartered Accountants, Chartered Certified Accountants, Certified Public Accountants) do have a responsibility to be truthful toward taxation authorities.

But that does not mean they REPRESENT the tax man, of course.

Instead, it means that tax authorities place higher trustworthiness into yearly accounts made by these higher accounting professionals.

And it also means that these accounting professionals put their reputation on the line when they do your accounts.

Now, contrary to the general thinking, this is not against your interests.

Due to forever increasing rules and regulations concerning taxation and accounting, there are many LEGAL ways to save on taxes.

An accounting professional is an expert on researching and finding methods to save on taxes... and, due to his wide knowledge and continuous study of these regulations and precedents, he does so legally.

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Business Owners Profit Guide: How to get more out of your accounting service

Obviously, you wouldn’t want someone to save you money illegally. Sooner or later such practice would get YOU into more trouble than you care to know about.

And this brings us to another vital point on that elusive “something” for which you pay your accountant: His responsibility is to ensure that WHILE you save as much as possible on taxes, it is done LEGALLY. In reality, his responsibility is to ensure you won’t get any trouble later on.

Understandably, it’s not always easy to think this way when the accountant says you CAN’T include this or that in your books as expenses. But in the long run, it makes life much easier.

Again, the best practice is if the accountant can tell you also what you CAN include in your books and not only say “NO” to everything. Good accounting service should also include giving information about deductions and legal ways of minimising the tax burden.

Taking care of business during the year There’s another issue that can also create friction between the business owner and his accountant.

This involves the month-to-month routine of using and delivering an accounting service. Or, as in many cases, the LACK of such monthly routine.

Come the year end, many business owners rush to their accountant with a full year’s worth of documents, expecting him to do the yearly accounts at a moment’s notice.

If it was just one or two clients, he could, you know. But when it’s many clients, he will be under considerable pressure... which is not good for either of you.

The books should be kept up to date all through the year. That’s not only a legal requirement but also the best alternative for both you and your accountant.

There’s a downward spiral than can start with these elements: 1.

If you don’t deliver (or, if the accountant doesn’t ensure that) the documents of each month are delivered in full to the accounting firm — preferably organised into binders or entered into accounting software — then there’s no way the accountant can do the monthly accounts accurately... or, depending on what’s missing or incomplete, at all.

2.

If the accountant cannot do your accounts on time, you won’t receive the information about that month in time either.

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Business Owners Profit Guide: How to get more out of your accounting service

3.

Since the accounting firm charges a monthly fee for doing your accounts, they’ll send you an invoice on the work they haven’t done. You’re not likely to pay that.

4.

When you don’t pay their fees the accounting firm will put your work at the bottom of the pile and it will get delayed further.

5.

When you don’t get information on how your fiscal year is developing, there’s no way you can detect problems or utilise positive trends so you may well end up losing money.

6.

Obviously, this won’t exactly increase your willingness to pay the fees....

.. .and so it goes on.

While it’s very understandable how this can feel for the business owner, it’s not very pleasant for the accounting firm either. In fact, both parties lose by allowing this dwindling spiral to develop.

Essentially, the accountant should have a clear set of cooperation principles so that this unfavourable development never starts at all.

Basically he needs to ensure — and you should agree to — that if you have problems delivering the material then he is responsible for coming to GET it... and, in such case, you compensate him for the extra work.

Then, the accountant should be responsible for doing the monthly accounts and delivering the information to you in a timely manner.

By far the best way of handling your accounts is to ensure that all the documents pertaining to the calendar month are delivered fully and completely to your accountant within days after the month’s end.

This is important because everything is still in fresh memory should the accountant need more information about some special transaction.

Reversely, if it is left until your fiscal year has passed and until the latest possible moment before yearly accounts & tax report have to be in, something is bound to be forgotten or left out... and that’s a guaranteed way of losing money.

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Business Owners Profit Guide: How to get more out of your accounting service

To get the best out of your accounting, there should be a set of basic rules for the cooperation between you and the accountant. That way things will flow smoothly, the cost of your accounting stays as low as possible and the benefits from it are higher.

Admittedly, it can be difficult to restore a good spirit of cooperation if things have deteriorated along the lines described above. In such a case, just make sure that the NEW accounting firm has clear rules of cooperation which will ensure things go smoothly and your accounts get done through the year in a timely manner.

If you have delivered your documents in full every month and your accountant still delivers months in arrears — or even misses the deadline for yearly accounts — then your dissatisfaction is completely justified.

You don’t have to ASK the accountant to do what you pay him for. If you do then you should draw your own conclusions as to how meaningful it is to continue cooperation.

Every accountant is an individual person When it comes to negative generalisations, it’s best to give each accountant the benefit of a doubt just like you’d do with any other person.

Each accountant is an individual with his or her own personal characteristics, some of which are good and some of which are less so, just like with any human being.

The most usual shortage with accounting firms concerns communication, both in terms of giving information to businesses in general and to their clients in particular.

It’s a question of time, resources and, to an extent, communication skills.

The average accounting firm is a small one with 1-5 personnel. Many accountants are sole practitioners with no personnel or with only a half-time secretary or bookkeeper to assist them.

Consequently, an average accounting firm has little time or resources for marketing, public relations or other ways of communicating their thoughts and realities to the business community.

It’s not an excuse, of course... but it does explain why most people hold generalised ideas about accountants.

The idea of “little grey bean counters scribbling numbers, telling everyone what they cannot do...” and so on is not really today’s reality.

Times have changed and today, the accountant can be a financial consultant helping the business owner to reach his goals and make those difficult decisions.

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Business Owners Profit Guide: How to get more out of your accounting service

Today there are accountants who can help you so much more than what’s commonly believed about accounting firms.

So, for the moment, try to give it the benefit of a doubt and read on to find out what you could really get out of your accounting service!

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Business Owners Profit Guide: How to get more out of your accounting service

TASK AND PURPOSE OF ACCOUNTING The term “accounting” is a general concept that covers a wide variety of professional services and tasks.

Contrary to what is generally believed, accounting is NOT a complex or hard-to-understand subject. It only appears that way because of the complicated professional terminology used in connection with it.

Usually accounting is understood at its most basic form as bookkeeping. An accountant is someone whose task is to keep accurate records of every financial transaction of a company, organization or sole trader. An accountant records every purchase made (and paid), every invoice sent out to (and paid by) clients and so on.

The keeping of these records is done seemingly because it is ordered by legislation. We HAVE to keep books; it’s not a question of whether or not we want to do so.

Of course, taxation (in its many forms) is the reason why it is mandatory to keep accurate financial records; authorities want to have a way of verifying how much tax your company should pay, if any.

In addition to the basic bookkeeping, there’s yearly accounts — the closing of the books for each fiscal year.

On top of this there are various more advanced services that accountants can deliver, depending on their degree and certification... but we needn’t worry about those since here we want to examine to see how you could get much more out of what you’re already paying for the BASIC accounting services.

Why business owners don’t do their own accounting If accounting is actually a simple subject then why don’t most business owners do it on their own?

Well, the subject itself is simple and the principles of accounting basically logical, but the legislation surrounding the subject is anything but simple.

There are a staggering number of rulings and regulations governing accounting; what deductions can and cannot be made, how this and that is considered in this or that situation... a right jungle of bureaucracy, none of which is the doing of accounting firms.

Lot of these rules change every year.

New rules are created and usually a new one has to be applied to a number of existing ones... and on and on it goes.

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Accounting firms spend AGES every year just following and learning these new changes. These forever renewing rules are unforgiving; not knowing is not an effective defence if things go wrong.

And that’s basically why you’re always better off letting an accounting firm handle your bookkeeping and yearly accounts.

They follow the changes and keep up to date on every new rule (and every new ruling on each rule) so as to give you the best possible tax-saving benefits available by legal means.

Keeping up to date with these changing regulations requires a lot of time and studying. For someone to go into all that trouble only to keep books for ONE company would not be very costefficient.

In fact, it has been proven time again that having an accounting firm do your books is more economical than having an in-house accounting solution.

Much more economical.

Additionally, the quality of work in an accounting firm is usually better also simply because of the expertise brought on by handling the accounts of lots of companies in various industries.

Even those using accounting software for entering the figures on their own still use an accounting firm for verifying monthly accounts just to be on the safe side.

So, it’s not really worth it to try doing it all on your own. But what about the usefulness of bookkeeping in itself... do we do it only because we have to? How would you answer a question like...

If it wasn’t mandatory to keep books... would you?

Indeed, would you bother with keeping financial records if you didn’t have to?

Interestingly, your INSTANT reaction to this question will more or less indicate how useful your accounting service is in your opinion.

If you go with whatever flashes to mind instantly — as opposed to the logical answer which you might arrive at after a short deliberation — then your gut feeling should accurately reflect the degree of HELP and GUIDANCE you receive from accounting service presently.

If your flash answer is a decisive “No” then you’re probably not getting much at all and accounting for you means basically paying yet another tax-type cost only because so dictated by powers that be.

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If your reaction is a hesitant one then you’ve probably TRIED getting something out of your monthly accounts spreadsheets but not managed to get a full grasp on it from what your accountant has explained to you (or left unexplained).

These are things like how to use the figures in monitoring your business, spotting developing trends, finding emerging problems and generally detecting helpful bits of information to use when making decisions... and so on.

And if you instantly come out with an emphatic “Yes” then you probably already have a monthly monitoring & consulting service of the type this manual talks about... OR you’re an expert in the subject of accounting, in which case spreadsheets “talk” to you and you can easily read the figures as a prediction of future.

If we use logic to look at whether or not the keeping of books is a worthwhile expense in itself — even if it wasn’t mandatory — we must look at what YOU GET OUT OF IT. You’re paying for it so your view of it is the only one that counts, as long as your accountant keeps the books within those legal perimeters he is bound to adhere.

Looking at it from that viewpoint, the quality to which the service helps you in the running of your company becomes visible.

If the accounting service you’re paying for offers no consistent, reliable HELP in running your business and making those difficult decisions, then it’s merely an expense... a necessary evil you pay for only because you have to.

If that’s the case, you might want to shop around for a more useful service.

Reversely, if your accountant continuously monitors several financial key figures (additional to that what’s required in just keeping the books) and analyses the information, presenting it to you in understandable form on monthly basis... well, then the service is very useful and not an expense but a worthwhile investment.

In this case, your best bet is to hold onto that accounting service and work with your accountant to develop it further.

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Using only 5 percent of an accounting firm’s expertise Being so closely associated with taxation, accounting has traditionally acquired a less-thanfavourable image with business owners.

Of course, as we’ve already discussed, it’s not the accountant who’s demanding us to pay taxes and abide by all those regulations... but, to his misfortune, he is the one who has to bring these bad news to our attention.

The accountant works for his CLIENT — you — and not the tax authorities.

The accountant is there to inform the business owner how he CAN do things best and save money on taxes legally and to help the client to avoid mistakes that can cause problems in the future.

But despite all that, the fact remains that the accountant will remind the client about some unpleasant things and, because of this, many of us aren’t all that eager to spend our times with spreadsheets.

Due to this and the general development during the past decades, the reality today is that businesses aren’t really using the bulk of the expertise available at accounting firms.

Most small-to-medium-sized companies use only the basic services, such as monthly and yearly accounts, possibly payroll services and verification of VAT calculations.

Furthermore, the WAY these services are used is more in the way of getting the accounting firm to take care of the task of bookkeeping rather than asking for detailed INFORMATION from the accounts for running the company.

In other words, most of us see accounting as a physical task of preparing documents required by the bureaucracy rather than a fact-finding task revealing vitally important information on which to make strategic and tactical decisions in our companies.

Yet, the most valuable part of accounting service is the INFORMATION it departs on the development of the company’s finances.

Doing the tasks of entering figures into the books is only 5 per cent of what’s actually available from an accounting firm.

The true benefits of Accounting are in that it can act as a very accurate monitoring service for the business owner, revealing the development of the fiscal year, giving direction and certainty to decision-making and acting as an early-warning system for any problems.

Finding problems before they’ve had a chance to grow into hard-to-handle monsters is a vital part of it. Small problems are much easier, faster and cheaper to solve than big ones, of course.

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But it’s only one of many benefits. For if your accounts are monitored for problems, they’ll just as easily reveal any POSITIVE trends well before you could detect these with the bare eye from the physical activity itself.

If you can FIND all positive changes, get the figures analysed to find out what CAUSED the positive change... well, then you can STRENGTHEN that cause to create even MORE of those positive results.

Thus, a good accounting service can act as a “treasure hunt” of sorts also, constantly monitoring your financial figures to find any positive changes so you can put your attention on these and start utilising every opportunity immediately.

What is the task or purpose of accounting, then?

Basically, the purpose of your accountant is (or should be) to help you keep up to date with the development of your financial situation on monthly basis during the fiscal year.

Further, the goal of accounting is to act as an expert aide to the business owner, monitoring and analysing his figures and reporting any findings to the client in understandable language.

And finally, the accountant is there for the business owner whenever he wants to consult the expertise and experience of the accounting professional in subjects of taxation, accountancy regulations, financial planning and other related matters.

Many accounting professionals can give a lot more help.

Unfortunately not many accountants offer such help in such a way that it would COMMUNICATE to a business owner. Professional terminology and hard-to-understand concepts are used instead of plain English.

Obviously, that’s not how it should be. But it’s also the reality of today.

Thus, if you want better service then YOU must know what to ask for.

So it’s not really possible to let an accounting firm take care of it before you have ensured that they handle the things you want and need handled.

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Keeping the books, doing yearly accounts and filing taxes isn’t really even the most important part of what they could do for you; not if you measure by what positive effects could be caused by their expertise.

Therefore, what you get is what you ask for: What an accounting firm COULD do to help you make your business more successful IF you know what to ask for; and...

What they WILL do for you if you don’t.

Of course, it’s not as it should be.

But it’s how it is and that’s where you have to pick it up if you want the best service.

Why do so few accounting firms bother mapping out your wishes and needs? Well, for one, accountants can be called many things but salesmen they are not. And you, as a business owner, are guaranteed to know more about marketing than most accountants.

An accountant is more of a financial analyst that an aggressive sales person. Accountants have very strict rules of ethical conduct set forth by the governing bodies of the industry.

And they do tend to think a bit scientifically which makes it sometimes difficult for others to follow their train of thought.

The good news is you’re not likely to be pestered by persistent hard-sell approaches when contacting new accounting firms.

That you do have to learn what to ask (and even how to ask for it) is not necessarily a negative thing.

At the end of the day, knowing these things will help you get so much more out of accounting services that it’s a small price to pay for the benefits which will be yours for as long as you’re in business!

This manual aims to teach you what you COULD ask and receive from your accounting service.

In addition, you have a free bonus Client Requirement Analysis with us to help you define even more closely the type of accounting service that would benefit you most.

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In the final analysis, the task of accounting service is what YOU ask for. The goal of this manual is to give you the tools to ask for the best benefits and get the most out of your accounting service.

But before we get into that, let’s first take a look at what problems one can have with one’s accounting firm in terms of the service.

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COMMON COMPLAINTS ABOUT ACCOUNTING SERVICES In this chapter, there’s no intention to indicate that problems exist in the service you’re currently receiving from your accounting firm. No claim is made that the problems described here are general to the accounting industry or particular to any specific accounting firm.

These are merely thoughts and opinions of the writers in terms of possible negative aspects of accounting services — a list of “things that shouldn’t be,” if you like, for the purpose of this manual so you know about these non-optimum aspects and can select a firm whose services have taken these things into account.

After all, for a useful analysis, you’ll need both the good and the bad. In any service both will be present. It’s only the RATIO in which these exist that separates good service from bad.

Everyone makes mistakes and it’s not our purpose to make anyone wrong for that. In this manual, we’re only interested in whether the ability and the willingness to NOTICE and CORRECT those mistakes exists.

Monthly / yearly accounts late, deadlines missed Provided that you deliver your documents on time, your accountant should deliver monthly accounts spreadsheets to you within a reasonable time period after each month’s end. This can vary but it shouldn’t be more than a month after the fact.

Obviously, if you don’t get the information within a reasonable period of time after each month, the knowledge on how your finances are developing cannot be used when making important decisions.

Only accounts will tell the truth and if you are left to base your decisions on assumptions instead of verified accounts, you’re very much at a disadvantage.

In the final analysis, your most vital task is making decisions and the more correct those decisions are, the better your company will do.

Just as obviously, the more accurate (and real-time) the information you have at your disposal for the decision, the easier it is to make correct decisions.

Whatever the cause for lateness of monthly accounts, the consequences won’t serve your interests in any way.

So, do whatever it takes to get it corrected.

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Unresponsive service (no communication) How quickly does your accountant return your calls? Does he respond to your needs, answer your questions, produce the solutions you’re asking for within a reasonable period of time?

Some accounting professionals take too long to return a call... and some never respond at all.

While it’s not directly a technical issue of accounting, the time and willingness of response regulate what you get out of the service.

The faster the information you need is delivered, the better. It saves time for you.

Of course, you might want to negotiate with your accountant some form of a fee for such availability for advice on short notice. It takes up his time too.

If you have lots of questions to which you expect him to respond free of charge, then you can understand how it can soon diminish his enthusiasm, to say nothing of time available for such nonpaying consultations.

Some accounting firms offer a low-cost telephone consultation service which includes some time every month with the principle that if you use more than that, you’ll be invoiced... but if you use less than what’s included, it will not be transferred to the next month’s time allotment.

In this way, you pay a little every month and have immediate access to advice at any time. If you use the service at least every other month, it usually makes the whole cost lower than if you would pay full rates every time.

In any case, keep an eye on how long it takes for the accountant to return your call. If you usually have to call several times after leaving a message — just to find yourself talking to his answering machine, trying to get him to contact you — then HE is wasting YOUR TIME... and that’s not how it should be.

Additionally, check to see whether or not he actually DELIVERS; in other words, does he GIVE the solution to the problem or does he only offer pleasant conversation, leaving you without a solution?

Non-understandable language Another common complaint among clients concerns the WAY that accounting professionals talk and explain things in a way that’s not really understandable to a layman.

It’s quite common for an accountant to use professional terminology to such extent that understanding it requires one to start studying accountancy.

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Additionally, some accountants don’t take into account the fact the gigantic difference in experience about accounting that always exists between them and their clients.

Accountants deal with tens or hundreds of businesses and handle accounts day in and day out.

On top of that they’ve had some considerable TRAINING and education in the subject.

It’s much like when YOU try to explain the insider secrets of your trade to a layman. To understand, the other person would have to have some experience about the trade and considerable KNOWLEDGE about the BASICS of your industry, right?

And, without those, he just doesn’t have what it takes to fully comprehend the concept you’re trying to drive home.

Mind you. He will probably not let on that he doesn’t understand.

It’s human nature, you konw. We are utterly reluctant to admit that we don’t understand something because we (mistakenly) consider it a sign of low intelligence.

But knowledge is not intelligence, no matter how much TV quiz shows claim so. Not knowing that Oslo is the capital of Norway is no test of intelligence, merely knowledge.

We’re so used to THINKING someone is “stupid” for not understanding what we’re trying to explain... but if it’s professional talk and the other person is a layman... well, how could he really bypass all those years of experience with which YOU acquired your extensive knowledge in your subject?

It’s not that his intelligence isn’t up to it. It’s the lack of experience and basic knowledge within your subject that makes it hard going for him.

It would have to be broken down to smaller bits, explaining the basics gradually and little by little so that the person could then begin to SEE the more advanced things.

But if you START at your professional level, then it’s not going to be understood easily. It would be like starting first year medical students on the fourth year of their studies as the first thing... no go.

And that’s basically the difficulty in any professional relationship where one party is the expert and the other isn’t. Try to explain YOUR expertise to your accountant and you’ll see it works just the same other way around.

But it is a brave man or woman who admits not understanding. If you tell your accountant that you don’t understand and he then explains it again... and, because he is using just the same high gradient in his explanation you STILL don’t understand... and this goes on a few times... ...will you STILL keep on telling that you don’t understand?

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Well, if you’re anything like the rest of us, you’ll just fake it at some point and nod although it’s still not as clear as you’d like it to be. It makes one feel SO STUPID to keep on asking the other person to explain the same thing over and over again... nobody can keep it up for long.

Taking it back to accounting, we see that full understanding can be guaranteed ONLY if the accountant takes responsibility for the understandability of his communication to his client.

In other words, the accountant must be responsible for ensuring his client understands.

And to do that, he must explain the issue in layman terms and give any basic information that is required so the client COULD understand the concept being communicated.

Don’t think it’s a question of intelligence. If it is, the only question is whether or not the ACCOUNTANT is intelligent enough to realise he must ensure the client has all the data required to understand the information and that it is explained to him in layman terms.

After all, you’re paying him for the production and delivery of INFORMATION... and if he can’t deliver it in understandable form, it’s not really DELIVERED AT ALL, is it now?

Never accept information that’s not prepared in such a way that it’s understandable to you. You’re paying for the information so it’s definitely NOT too much to ask for it to be delivered in understandable form.

Anything else is like paying for someone to read you a story on a foreign language!

Non-informative service Accounting is so much more than merely a service of entering figures onto an electronic ledger (accounting software) and hitting the “PRINT” button.

Accurate and timely information is part and parcel of what you’re paying for in any accounting service.

Look upon your accountant as an expert analysing financial information, someone who can dig up vital statistics, find positive trends and locate problems before they can start causing trouble in the business activity.

Is he DELIVERING that vital “intelligence data” to you?

Now, most accountants will advise you about tax advantages and most beneficial ways of obtaining a car or set up a pension... but what about the month-to-month run of finances in regards to various sections of your company?

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Have you been able to MAKE MONEY — or avoid losses — because of what he tells you about your monthly accounts?

Has he pointed out emerging problems so you could nip them in the bud, when it’s still easy to solve them?

Has he helped you to devise a system so some problem won’t recur and shown you which figures should be monitored so that, if there’s ever a danger that it MIGHT happen again, you’ll find out before it becomes a problem?

Has he pointed out favourable trends so you can put your attention on them to make the most out of those opportunities within your business?

Or... is he just doing the books up in his ivory tower and the only communication you receive is his monthly invoice?

There’s a tremendous difference between accountants in how informative they are and how actively they take part in your business venture in their role as a provider of vital information on which you can guide your company toward its goals.

It might cost a bit more to get continuous monitoring and reporting of key financial figures. Or it might not, depending what you’re paying for your service currently.

But, if you get monthly reports on such monitoring and use even half of what you learn... the difference in RESULTS that you obtain can be quite dramatic indeed.

Don’t settle for no information. Use your accountant for digging up invaluable information on which to guide your company!

No guidance or caring Are you being treated as one punter among thousands by your accounting firm, with no personal attention, caring or guidance? Does your accountant care what’s happening to you and your company, does he take initiative when it’s needed?

If so, you’re not getting the majority of the good available in a professional consultation with an accounting professional.

The essence of good accounting is caring what’s going on in the client’s company. There should be some form of monitoring of your key financial figures involved in the service and the accountant should contact you when those figures show a turn for either better or worse.

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Furthermore, a good accountant can put himself in your shoes and look at different situations from your viewpoint instead of merely that of a “bean counter.” There has to be some willingness to go all the way for the sake of your success.

Look for an active accountant who cares what’s happening to you. If he can also present his suggestions in a positive way then you’ve found a really good accountant. But even a nagging accountant is better than an indifferent one.

Look upon your accountant as your financial strategist and watchdog whose usefulness is directly related to how actively he cares about you and your company.

Too expensive?

Like in every exchange of monies for other valuables, in accounting we measure the cost of the service by what we get out of it.

Obviously, one cannot determine whether something’s expensive simply by how much it costs.

With goods it’s easier since many retail outlets sell identical products. If you’re in the market for a new car, just shop around and select the dealership whose price for that specific make and mark is lowest.

But with services it’s not that easy.

Services aren’t identical.

A massage is not “the same” since different masseurs’ services create very different experiences as well as results. One can feel very good but, at the same time, be less effective in getting your muscles right. Another can feel less pleasant but be more effective.

With accounting services, the differences can be even greater.

One firm can give you a royal treatment in terms of wining and dining, charge you an arm and a leg and yet give you no real value for your money — you’re none the wiser for all that you pay.

Another firm might have no luxuries — not even a good chair for you to sit on — and yet the accountant gives you insightful advice that you can use to make and save lots of money.

It’s not really the cost of the service nor the pampering of the client that defines whether or not your accounting service is too expensive.

It’s what YOU get out of it.

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Apart from the tasks of preparing your books, yearly accounts and filing your taxes, the true value of what you receive depends on how much HELP and backup the service provides for you.

If it makes your job easier or faster, if it offers you insight and faster reaction time into utilising opportunities and avoiding costly problems, then the direct cost of the service is low no matter what the price tag.

Your accounting service will always influence the bottom line of your business. The profit you make depends on the decisions you make and the actions you take during the fiscal year.

Thus, to calculate the actual cost of accounting service you must take into account how much it offers in making your job easier and more profitable.

Now, if you feel that accounting services are too expensive, it could well be that you’re not getting exchange for your money in the way you’d like.

Your accountant should provide the INFORMATION but he can neither make the decisions nor take the actions required to utilise the data in your company.

If the service seems expensive, check out whether or not it is because you’re not getting that vital information on monthly basis.

None of the above but still not satisfied?

There can be many aspects to service and here, we’ve only gone through some of the most common problems.

The best thing is to discuss with your accountant or, if that’s not an option for you, define your ideal service and then discuss those wishes with new firms until you find one that can deliver.

But remember to keep your expectations reasonable. Be prepared for some give and take. Have tolerance for some mistakes also.

There’s no such thing as a 100% perfection in service.

An accountant is only human so if you’re expecting 100% perfection in every aspect of his service, you’re likely to be disappointed.

With this manual, we hope you’ll be able to define your wishes and needs even more so as to get the kind of service you’re looking for.

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A vital part of this is your free bonus Client Requirements Analysis, so when you’re done with reading, contact us for this uniquely interesting and useful bonus to the manual.

Next, let’s look at the benefits and positive effects that an individually tailored accounting service can produce for you and your company...

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WHAT A TAILORED ACCOUNTING SERVICE CAN DO FOR YOU How could you get much more out of the accounting service you’re already paying for?

Possibly you still feel some healthy scepticism toward the idea that accounting services could really provide something extraordinarily differently from what is commonly believed.

Perhaps you’ve already gained experience from the service of several accounting firms and have not been overly impressed with what you received.

Conceivably, you purchased this manual because you’re not presently getting the kind of service you want and you’ve not FOUND a firm whose presentation gives reason to suspect they could deliver such a service either.

So it’s quite understandable if you’re somewhat cynical about the idea. That’s quite all right.

But, please keep an open mind.

Things change and the goal of this manual is to bring to light the huge DIFFERENCE in results between accounting services.

The accounting industry is strictly regulated in regards to the accepted accounting procedures — how they do your bookkeeping, yearly account and so on — but NOT at all in terms of any additional service given to you personally.

To put it another way: What you get in terms of how your accounts are done should be uniform regardless of which accounting firm you use... but what they ADD on top of those technical tasks in way of giving you information is VERY individual between firms.

It’s safe to say that the basic accounting service available at an average firm is NOT tailored in any meaningful way UNLESS you’ve specifically asked for it OR the firm has developed a way to tailor every client’s service to his wishes and needs routinely.

There’s only one certain way to be sure that you get what you want.

You must ask for it.

And, to do that, you have to find out what’s there to be had.

Therefore, keep an open mind and read the next chapters from the viewpoint of “how could I get more out of my accounting services... what’s there to be had?”

If you do, you’ll be amazed at the difference.

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In order to present the possible improvements that you could ask for from your accountant, we will go through them from the side of the benefits these additions can produce.

Even if the headlines of next chapters may seem unrealistic (in the light of what you’ve personally experienced about accounting services), keep your mind open to the possibility.

There are probably thousands of business owners who are already enjoying these benefits... and they achieved that just by choosing an accounting service specifically tailored for their individual needs and wishes.

So, let’s get into it... and may your view of accounting services never be the same again!

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INCREASING YOUR PROFIT Before we get into the subject of profit, let’s just make one thing clear: Only YOU can increase the profits of your company because you’re the owner and/or the person running the business and making those all-important decisions.

So, if you ask “can my accountant increase my profits?” then the answer has to be “No, he cannot, not directly.” And no accountant should promise you that either.

But ask “Can I increase the profits of my company using in-depth, accurate and timely financial information about the month-to-month development of my business activity?” and the answer is a resounding “YES”... with some conditions.

Those conditions are: -

you must GET that information in understandable form through the monitoring of key financial figures which you’ve agreed upon with your accountant, and...

-

you must USE the information.

How much information you ask for (how many key financial figures you have your accountant monitor and report on) and the degree to which you use these data will govern the degree to which your profits are influenced.

Mind you. One can sometimes create a significant positive impact to cash flow and profits with a very small thing; all it takes is realisation.

Therefore, you don’t have to use all of the information to get benefits. In fact, it might be that you don’t have to use much of the information to maximise your profits.

How much of it you use and which advice you apply is, of course, totally up to you. You’re the one whose decision counts as it’s your company.

Only one thing is certain: WITHOUT any such constant monitoring and production of “inside information” about your company’s finances you CAN’T affect the outcome.

In a specific sense, there’s always an element of luck involved in whether or not you can create large positive effects.

Let me explain.

Upon close scrutiny, any company will be found to be constantly giving birth to TWO kinds of trends.

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For one, there are those bad trends known as problems. Sales stagnate or expenses increase or something like that — something that diminishes income and/or profits.

For other, at any given time we will find that there are also POSITIVE trends taking place. This or that product or service sells better. This or that expense goes down. Whatever it is, the main thing is that it INCREASES income and/or profits.

As business owners, we have grown wary of finding problems.

Nobody wants them so we tend to hope none come our way. This leads to not wanting to LOOK for problems, which, in itself, is the human way of reacting to such “threats.”

But any business develops BOTH positive and negative beginnings.

It’s not ONLY bad things, see?

The unfortunate difference between bad and good is that POSITIVE trends need to be NURTURED and helped along while negative trends tend to have a life of their own.

A couple of Murphy’s Laws give us the humorous explanation to why this is so: “If there is a possibility of several things going wrong, the one that will cause the most damage will be the one to go wrong.”

And... “Anything that can go wrong will go wrong.”

Whether or not these are the cause of bad things developing on their own, is academic. Everyone knows that negative trends develop and grow into hard-to-handle monsters in amazingly short time all on their own.

We also know that achievements come through hard work... and definitely not by themselves.

In reality, positive trends exist because there’s someone CREATING the constructive flow of income. Negative trends could be called “nothing trends” or “no one there creating a positive flow any longer.”

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Thus, calling these trends negative means really “lack of positive development” which is simply a positive flow DIMINISHED. In business, nothing is bad in terms of income.

If nothing is done, no income is forthcoming.

Thus, a negative trend is really a change of circumstances: Before, there was something that CAUSED the income which now has changed in some way, resulting in lowering of the income.

Unless that something is found and reinstalled, income will become less and less until it dries out completely.

Of course, you may choose to end some activity in which case this dry-out is intentional. But here, we are talking about unnoticed and unwanted changes for the worse.

Here, the longer it takes to FIND OUT about it the more it costs.

Inexpensive “insurance” against unnoticed let-off Adding monitoring & reporting of key financial figures to your basic accounting service will ensure that you get told immediately if some part of your organisation (or some aspect of some service or function) has slowed down.

It’s rare that such let-offs would be intentional.

More often than not, it is caused by unintentional shift of attention away from some routinely action, diminishing the flow of income without anyone realising.

How do you maximise profit?

There are many ways to ensure maximum profits in a business activity. Buying and selling are, of course, in key position.

But looking at what your accounting service can do to help when you’re striving to increase profits, we find that the vital elements are:

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Accurate, timely information delivered in analysed and understandable form Nothing can substitute knowledge. If you don’t know what’s going on, if you only rely on gut feeling and general estimates on what you SEE with the bare eye in your company, you’ll be missing a good part of the picture.

Don’t think this is any kind of belittling of your abilities. Your ability is not in question. You’ve achieved your own company which already puts you into the top 4 percent of the nation in terms of ability.

It’s merely a question of not getting accurate information and not getting it fast enough.

See. If there’s a downward trend in your finances, it won’t be VISIBLE in the company until it has had a chance to grow into something that’s very much unpleasant.

By the time you CAN see its effects in the physical workplace, it’s had too long time to grow and fixing it will cost much more than it would have, had you found it at birth and nipped it in the bud.

With accurate and timely financial information, you can PLAN your future. You’re there EARLY ENOUGH to plan it actively.

Without it — relying on gut feeling and visible signs alone — you’ll always have to REACT to dangers. You’ll have your hands full just COPING with problems and, realistically, you don’t have a chance of planning things carefully.

It’s the difference between acting purposefully with enough time to analyse the situation... and reacting wildly just to cope with monster problems threatening the very survival of your business activity.

So, in reality you don’t really have a choice. To be able to maximise your profits, you must have accurate and timely information on the development of your finances on monthly basis.

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Experience in financial planning Now, if you’re like most business owners, you don’t have a degree in economics or accounting. If you did, you’d probably be working either in accounting or the financial industry.

Instead, you have high expertise in your chosen field. So high, in fact, that you’ve become an entrepreneur, which immediately puts you into the top 4 percent in your industry.

Your expertise and knowledge are what give your company so much potential. Those visions of success that you’ve created are there to be achieved.

However, financial planning is one of the major tools in making those plans come a reality.

And your accountant can help you learn financial planning.

Really, it’s not that complicated at all. In fact, it’s very SIMPLE... but because of all those regulations and unfamiliarity with accounting, it seems extremely complex. So perplexing, in fact, that most business owners just give up.

And no wonder they do, seeing how utterly confusingly these things are explained in even the most basic business manuals!

Yet, financial planning doesn’t have to be complicated or confusing.

Financial planning could be defined like this: “The act of collecting and verifying key financial figures and then looking at these to see what positive and/or negative trends have developed since the last time you looked at them, noting the changes and deciding what you want to do about each.”

Note that nowhere does it say that you MUST do something about each trend. Also, it doesn’t say you have to find EVERY trend or collect (monitor) EVERY figure. You can start with 5-10 figures, sometimes even fewer than that.

Financial planning, then, is really just KNOWING what’s going on and DECIDING whether or not you want to do something about a trend you’ve found.

Sometimes you don’t have to do anything about it. Sometimes you might not be able to do anything remarkably life-changing about it.

But you can always KNOW what’s going on... and, if you choose, you can always DO something about it. Knowing and being able to affect the outcome are the basics of financial planning.

And, in terms of maximising profits (and minimising losses) ANYTHING you do is better than doing nothing.

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To do something about things, you have to KNOW what’s going on. And you do have to get the right picture of each area.

Your accountant can and should coach you into financial planning. It doesn’t require a degree to plan one’s own finances. You can start very modestly and learn as you go.

It’s one of those “on the job” training things anyhow... even for someone with a degree. Theory is one thing but it’s the PRACTICAL doing of it that finally teaches the person.

A good accounting service should INCLUDE this element; the service should help you do your financial planning little by little until you’re totally independent and can do it with accuracy and confidence.

Ask for such a service — nay, demand for it!

Monitoring and going through the figures frequently enough To get information that REVEALS any favourable or unfavourable trend, there needs to be continuous monitoring of your key financial figures. These need to be analysed by your accountant regularly and presented to you in understandable form often enough for all of this to have any meaning.

That you don’t need to do this monthly is an all-too-usual misconception shared by many owners of smaller businesses.

In fact, you’d be best of doing it WEEKLY but, because bookkeeping works on one-month intervals, the practical interval is one month.

Even sole practitioners need this. KNOWING where you’re at every month is a crucial factor in running a business, no matter how small it is at this time.

The only alternative to knowing is NOT KNOWING... and you don’t need anyone to tell you what problems that alternative can bring to existence.

Whichever way you look at it, problems are easier to solve when small. Therefore, a monthly once-over of key financial figures is vitally important.

But you won’t find ONLY problems.

In fact, the longer you keep up the monthly going-over of accounts, the fewer problems you’ll find.

Not only fewer but those you do find will be smaller and, because of early detection, MUCH easier, cheaper and faster to solve.

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Soon enough, this monthly overseeing of accounts becomes a much more motivating exercise as problems become fewer and POSITIVE TRENDS — opportunities your business activity has created — are found more frequently.

You can look at it from two angles, in other words. It’s like one of those optimist-pessimist jokes.

You can look either for problems or for opportunities.

Either way, problems will become smaller and fewer while positive trends emerge more and more. These two are inescapably connected.

So, your “choice” is really this: Do you prefer to have problems or opportunities?

Just like before, this one’s not really a choice either, right?

Knowing which key figures to monitor Financial figures interact with each other. They’re interdependent in many ways. For instance, when income goes down, payment of owed bills is likely to slow down as a result.

Basic bookkeeping is often rather general in terms of accounts. More often than not, everything you sell is put together into “sales” with no distinction made between different lines of products or services.

Similarly, accounts rarely monitor so called “starter products” — those products or services which bring new clients, being usually the first thing a new client purchases — and “resales” (when clients purchase again).

Many key figures can be monitored outside bookkeeping and added to the analysis.

For instance, do you know how many contacts your company gets from new prospective clients every week or month? How many of these buy (what’s your success ratio in closing new business)?

How many of those who buy actually become repeat business? How many “cold contacts” does your marketing and advertising reach monthly and what’s the response ratio? Which ads or messages work best, which don’t bring any response at all?

Which products or services have the highest profit? Which ones produce the best cash flow?

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Are there specific type of client you should try to get more of (they buy more, pay well and in time, produce more profit than others) and some other kind (of clients or services bringing in these clients) that you should raise the price for?

If your accountant has this type of a service on offer, you’ll see that the number of key financial figures being monitored keeps changing.

At one time, some specific figures need to be monitored but they might be dropped after a while.

Other figures are added and they might be discontinued once you’ve reached your goal... or you might want to continue monitoring those figures just so you can verify the positive development month to month.

Every business is individual. This is so much so that even same-size businesses within the same industry will be found to have many differences in which key figures they want (and need) monitored.

At the end of the day, YOU are totally unique and your individual goals and business concepts define what needs to be monitored in order to produce trustworthy, accurate information on how you’re reaching those goals.

Therefore, it’s vitally important that if your accountant delivers such monitoring / consulting service, you take sufficient time and care to DEFINE which key financial figures need to be monitored and, once in the month-to-month run of the service, redefine these as needed.

Naturally, we offer and deliver this service so if you cannot find it elsewhere, feel free to contact us. We’d be happy to go over this aspect of our service with you and discuss your particular circumstances.

Suffice to say that almost ANY ASPECT of your business CAN be analysed provided we monitor the right figures. It’s almost magical how much you can find out about your company by choosing the right figures for monitoring.

The benefits of this are not limited to the maximising of the profits. Many business owners consider the clarity of vision — knowing exactly what’s happening, seeing precisely where the company is headed and being able to DIRECT it there actively — something extraordinary which they never thought POSSIBLE. Whether or not you would feel the same way, the possibility in itself is well worth exploring. You’ll get more on this subject once you use your bonus service (Client Requirements Analysis) with our firm.

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The key to your ability to maximise profits In the final analysis, there’s only one formula for increasing profits.

First of all, only you can increase your profits.

Any accounting service can only help in providing the information by monitoring, analysing and presenting the key data to you... and then by helping you decide what to do with it, if that’s what you want.

Since YOU are the only one who CAN increase the profits of your company, then you must ensure that you get accurate and sufficient information about your finances at regular-enough intervals... and that you also get a chance to sit down and go through it all with an expert so that you’re fully updated on every aspect of the development.

To put it another way, you have to create the circumstances in which you LOOK into these things once a month so you can implement small corrections twelve times during a year.

Done that often, bad trends simply don’t get TIME to develop into costly and dangerous problems. And positive trends get noticed right away and you can start UTILISING them immediately.

So, you do a scissor-action of kinds: -You CUT OFF losses by stopping problems from ever getting a chance to grow unnoticed and...

-You INCREASE those things that bring in more money by finding out about it immediately and by putting your attention on it in order to strengthen it so it brings in even more income.

The formula of profit, then, is to have a system which monitors key financial figures and reports these in digestible, ready-to-use form to you once a month, added with the backup of an experienced financial consultant (your accountant) so you can get assistance whenever you need or want it on how to handle whatever comes up in your finances.

Although we talk about “maximising profits,” there’s no such thing as “maximum” in terms of profit.

One can always improve things so maximum is a very theoretical value.

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But any increase in profits is better than no increase, to say nothing of lowering profits, of course.

And that’s the message: You CAN influence your profit, you can do something about it... provided you don’t settle for anything less that the full knowledge on which to do just that!

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UTILISING OPPORTUNITIES AND YOUR TRUE ABILITIES If there’s one thing no-one likes it is when someone tries to tell you how you should run your own business... and, worse still, if he says you’re not really utilising the opportunities created by your company.

Oh, we just HATE that. And rightly so, for no one else has a right to evaluate the degree to which you utilise your full potential. Only you can estimate that.

Similarly, it’s not possible in this manual to give any estimate on how MUCH more you could get out of your business. The only thing I think we can safely agree on is that our true abilities are far greater than we give ourselves credit for.

So, let’s look at the subject of opportunities and their utilisations from that viewpoint.

Immediately, the thought goes to one question:

Which opportunities?

Speaking of opportunities within your own company can seem a bit strange. You know your company inside out so surely you’d notice if there was an opportunity lurking somewhere, right?

Hmm... well, not necessarily.

If we look at the anatomy of an opportunity, it could be said to be “a successful trend offering bigger benefits to him who seizes the moment.”

Opportunities start small and, unless utilised, disappear quite fast.

That’s why they’re called “windows of opportunity.”

Every day your company creates something which can be measured in money. Every month, those different areas of production can be found to FLUCTUATE up and down.

If we take an area or income statistic, we soon find out that it never stays the same for long. It has a tendency to go either up or down.

In an earlier chapter, we already touched the reason for a downward curve; someone or something that’s been producing the income has (been) stopped or changed in some way.

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The cause of positive trends is basically the same — someone or something causing a change in the amount of money coming in — and the only difference is that the income goes UP. Now, if we could monitor a single key figure on daily basis as a graph on paper, taking a photograph of it daily and then put these photos together into a film and play it, we would see how the graph fluctuates continuously.

It tries to go up and it tries to go down.

This makeshift film would show a very “indecisive” little line — it would seem as if the graph just couldn’t make its mind up, changing directions all the time as if considering whether it should go up or down.

Each time the graph goes up a little bit, it does so because SOMETHING CAUSED IT TO GO UP. It may be the same factor every time or SEVERAL different factors are found to have an influence on this specific statistic.

Whichever, one thing is certain: Every time the graph goes up, it represents an OPPORTUNITY to stabilise that upward trend.

From this, we get a new look at the thing called “opportunity:”

Real opportunities are formed from lots of small things We’ve grown to consider an opportunity as something that’s so big and risky that it’ll give us sleepless nights just to consider going for it.

But that’s not so when the opportunity is within YOU. And the best paying opportunities are always that way with the person utilising his or her own true abilities and potential.

The opportunities that are constantly brought to life within your business are small but frequent.

Instead of one huge thing there are dozens of open windows to change the productivity of some aspect onto a higher level permanently.

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While it might not appear near as exciting as those huge, once-in-a-lifetime gambles we sometimes come across, these small “everyday” opportunities can actually produce much bigger positive changes.

Admittedly, it takes time.

It’s an ongoing process although you should start seeing positive changes within months.

But the great news is that there’s since you deal with gradual small positive changes with no investment involved, there’s practically NO RISK at all.

Small changes are made possible by having your accountant MONITOR a well-chosen set of financial figures on monthly basis and then REPORT these in understandable English to you, showing those emerging positive trends and their causes.

After a while, you’ll find yourself dealing almost exclusively with utilising opportunities — as opposed to solving problems — within your company.

Not a bad thing as such, right?

An adventure into your own true potentials...

Call us for your bonus service and we will help you find out how you could find and utilise the many opportunities every single business activity produces during a fiscal year.

I guarantee that this simple telephone service will help you see several opportunities within your own business right away.

So, you have nothing to lose and possibly a lot to gain. The only thing that can happen is that you find out more about your TRUE abilities.

After all, isn’t it true that you’ve always KNOWN you could achieve so much more with your business, if you only had the right kind of help?

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NIPPING PROBLEMS AT BUD No doubt you agree that there’s no visible shortage of PROBLEMS in this world. This is especially so for anyone running a business.

At times, the life of a business owner seems like an endless chain of problems requiring immediate solution.

Generally, the bigger the problem, the more difficult it is to solve it. And the more problems there are to be solved, the thinner one has to stretch one’s time, energy and resources.

If problems just keep on popping up all through the years, it can slowly turn us into battle-worn Of course, one cannot expect a life in business without ANY problems.

There are an infinite number of different problems but, for our purposes here, let’s just divide problems into TWO major categories — good and bad problems... or wanted and unwanted problems.

Good problems are usually self-created and there’s something positive about them.

As an example, whenever you set a goal for the company, you simultaneously “create a problem” — the challenge made by the desire to reach from present reality to that goal you’ve envisioned.

But since the goal is voluntary and achieving it within your possibilities, the overall experience is positive in the main. And it’s a problem you WANT to have, which makes all the difference.

Bad or unwanted problems are those which life thrusts in front of us and our willingness in accepting the problem is not consulted.

These problems are threatening our survival and come usually at the most unsuitable time, necessitating all kinds of complicated and time-consuming actions at a short notice.

And you definitely don’t want these problems.

There are many kinds of problems within this category. Any unpleasant surprise bringing additional costs, delays, lowering of income or alike is generally a “bad” problem.

These problems aren’t self-created as such as they can be sprung upon us by others, the outside world or the general development of the economy.

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Yet, if we want to DIMINISH the number and intensity of these “bad, unwanted” problems, we have to take a causative view.

Despite the fact that it isn’t fair, regardless that these problems seem to be caused by others, there’s only one attitude that can effectively MINIMISE these problems: We have to accept that by some way, we may PREDISPOSE ourselves to these problems.

Whether or not it really is so is academic. The fact is that if we LOOK UPON the problem from this viewpoint, we can DO something about it.

It’s not the same thing as “who’s to blame.”

It’s not a question of whose fault it is.

It’s merely a question of whether or not we want to MINIMISE the number and size of “bad” problems coming our way.

We have to take the view that, by some unintended action or unnoticed inaction, we make it more possible for these bad problems to be born and grow to a hard-to-handle size.

If we take that viewpoint, we can do something constructive about the problem (as opposed to just going after the culprit).

Where a problem has been caused by intentional misconduct or nonpayment of contracted moneys, one can seek compensation through the legal system.

But all aside from that, a problem can seldom be left to wait for months until compensation has been obtained. For one, the problem will cause a lot of damage if it’s allowed to remain in force for the duration.

It’s not commonly known that, in the case of nonpayment of moneys owed, the letter of the law doesn’t recognise the responsibility for the CONSEQUENCES of it.

For instance, if your customer doesn’t pay and the lack of funds caused by this then leads to loss of other income, the customer is still only responsible for paying the sum he owes.

If you win your case, he’ll have to pay interest and your litigation costs, but he won’t have to reimburse you for whatever losses the lateness of his payment caused for your company.

That’s all assuming that you win your case AND he can (and will) PAY once there’s a court judgment to that effect.

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Thus, we see that legal responsibility is not directly connected to solving the problem.

No matter WHO caused the problem, it’s yours now and if it’s to be solved, the solution has to come from you.

Life isn’t fair sometimes. But fair or not, we have to keep the show on the road for otherwise, we open ourselves for the worst effects of the problem.

It’s not possible to avoid unwanted problems completely. But it is very feasible to minimise the number of unwanted problems cropping up and restrict the amount of damage these problems can cause.

To start with, we need to look into how problems come into existence.

How are problems born?

Why do problems come to our knowledge only when they’re huge and difficult?

Difficult and unwanted problems seem to materialise from nowhere, catching us unprepared and striking unexpectedly like lightning from clear-blue sky.

Where do these monsters come from? How can they spring on us without warning and with such crushing power?

Well, if you look at your business, you will see practically hundreds of different areas and smaller fields of the business developing every day.

Some are easy to see because we keep an eye on them. Others are more difficult to notice because they are so small, under something else or develop so slowly that we simply can’t catch the movement at all.

Your company produces some service or product or combination thereof. Whatever the main objective of the business activity, the financial goal of any commercial company is to produce income to cover its costs and profits for the owner who has invested his or her money into the venture.

This income is produced by the combined results of the major activities within the business.

If we take any ONE major area of business — such as sales, production, delivery, billing, etc. — we can find that it consists of a relatively large number of smaller bits and parts.

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To get one completed cycle (a sum of money through marketing, sales, deliver and billing) in any of these areas of business, many minor actions must be done.

Each of these smaller actions then ALSO consists of yet tinier bits and pieces.

While I’m oversimplifying things here, this concept gives us a relatively good picture of how every result within a company is produced by a huge number of small “components.”

Some of those “components” are small actions performed by a person, others can be things like resources, machinery, maintenance, cash in the bank... well, just about anything within the business.

Now, if we could backtrack the development of a difficult problem, we would find, among other things, that...

-

the circumstances allowing it to be born were caused unintentionally in an attempt to solve some other problem or to create some other positive effect within the company

-

this problem has had a long time to develop unnoticed until it reached the size in which its effects will be noticed in the business place

-

its development could have been detected almost INSTANTLY after its birth IF certain key financial figures had been monitored at the time.

And this brings us to the remarkably GIGANTIC difference that TIME makes in creating the same problem: The longer a problem is allowed to develop unnoticed, the more difficult, costly, time-consuming its solution is. The bigger it grows, the more vicious and life-threatening its nature will be and the more far-reaching negative consequences it can produce.

Small problems are easy to solve swiftly and inexpensively Now, HAD the problem been discovered at its infancy, it could never have developed into a monster. Instead, it would have been very easy to solve.

The solution would have been inexpensive and quick to implement.

Its solution would have felt almost pleasurable as it would not have put you through such infernos of negative thoughts and waste of time as would be the case with a big problem.

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Furthermore, the fact that it had been FOUND would have almost automatically created a mechanism for safeguarding against that same problem recurring: You would have ensured that the monitoring of those specific key figures would have continued and, with the experience from the problem, even strengthened so the same problem would not recur OR, if it ever threatened to emerge again, it would be detected immediately so it would be easy and swift to deal with.

A problem is just like any aspect of business, good or bad. It needs TIME to develop into something whose size and effects are big enough to be seen and noticed.

A problem acts just like a snowball rolling down a snowy slope.

As it rolls downhill, it gathers more weight and more momentum until it can deliver a devastating blow to anyone unfortunate enough to be on its path.

And so it is with a problem also.

Only it takes much LONGER to develop and its progress is one of stealth.

It’s a silent killer, if you wish, carefully rigged to hide its existence, invisibly gathering momentum until the point of impact... and when it finally delivers its blow, it’s big enough to cause major damage.

But it can hit you hard ONLY if it is allowed to grow big enough. The longer it manages to stay invisible, the bigger the impact.

Problems are DEVELOPED, not born out of nowhere.

They APPEAR to come from nowhere simply because they’ve remained invisible for so long until the effects snowball into something that’ll require lots of hard work and money to solve.

And therein is the “secret” of avoiding problems.

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Basic secret of avoiding difficult problems Bad problems are like venomous snakes. The smaller you find them, the easier they are to remove. But let one grow as big as it will on its own and you’re in for a big challenge.

The “secret” of avoiding problems is simple: Install a monitoring system that will DETECT problems when they’re very small.

Have key figures monitored and analysed by an expert so that every month you can CHECK for problems and, if any are found beginning to develop, NIP THEM IN THE BUD. It’s basically the same thing you’re doing now, only MUCH EARLIER. Trust me, it’s much easier to do if you’re there earlier.

You’re keeping all those basic building blocks of the company’s major activities on the right course. That’s your job as the chief executive officer.

Possibly the most time-consuming and resource-binding thing in running a business is that problems are found FAR TOO LATE. By monitoring key financial figures, you can find every problem MUCH earlier than you ever could without such early-detection system.

Much, much, MUCH earlier.

At the first moment of its birth, a problem is merely a statistic that departs from the direction you’ve envisioned for that specific activity. At that time, it is a very small departure from the ideal and, if found, very easy to correct.

A small correction requires very little time, costs practically nothing and effectively handles the problem completely.

And it saves you HUGE sums of money.

This is because the cost of a problem accelerates as it gets closer to surfacing. In other words, the cost can double during the last few months whereas it might only increase a percentile during the first few months of its existence.

If you take your most costly problem and look at how long it took to develop into such a monster, I think you’ll find that it started only a year or two earlier. And chances are that had it been detected a couple of months earlier, the end cost of it might have been as much as halved.

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Thus, TIME makes problems cost a lot more.

Specifically, it’s the point of discovery during the “hatching period” of a problem that governs how much time and money is required to solve it.

There’s no way to completely eradicate problems from business activity. It’s a complex activity with hundreds of subareas and statistics which will react to each other.

But you can greatly lessen the number of problems... and you can lower the cost of these tremendously by early detection so that the problem can be solved quickly and with minimum cost or damage.

Monitoring problem areas to detect bad trends before they develop into problems Those hard-to-solve problems exist mainly because of the lack of a sufficiently accurate earlywarning system to detect unfavourable trends before these can develop into problems.

For months, the changes are just too minute to see with the bare eye even if you DID have your attention on exactly the right spot among the hundreds of things in your business activity.

On the other hand, if such a “problem-detection microscope” existed, we could nip problems at bud and not only save a lot of money but also avoid aggravation and those inevitable dents in motivation that huge problems can cause.

And, as you already know, such a system exists.

An accounting firm handling your books can easily monitor those key financial figures for you.

They can analyse how each change affects other factors and whether or not the influence on other areas is positive, negative or immaterial.

It takes more than just basic bookkeeping, though. And you need to monitor more figures than what monthly accounts usually show.

But it’s neither as extensive nor expensive as you may think.

You don’t have to monitor EVERYTHING, only the main figures and then some specific figures in those areas that are prone to producing problems.

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If your accountant knows how to do this, it should not cost much more than what he is already charging. Admittedly it takes quite a bit of work to set up this monitoring system and do the work.

Additionally, you need to talk with your accountant every month and go over the figures.

But the added cost should not be significant.

However, the potential difference of HAVING such a continuous monitoring service can be remarkably significant.

Of course, there’s no way to PROVE it since you can’t BOTH solve the problem at bud AND let the same problem grow into a monster just to see how much costly, time- and energy-consuming it is to solve at that time.

But it’s common sense, really, isn’t it?

Minimising the chances of the same problem recurring again Once a problem has been solved, we want to ensure it won’t happen again.

Whatever you do to ensure this, some precaution is needed. In this, there are two types of solutions which we could call the harmful and the beneficial solution.

A solution could be called harmful if it makes it harder for you to pursue prosperity and profits within the business activity.

For instance, if you’ve suffered a credit loss by a client, it would not be very useful to decide never to have clients again just to avoid further credit losses.

Staying away from whatever caused a problem isn’t necessarily the best way as it closes doors and limits your future business activity.

A beneficial solution analyses the problem, finding all its causes and then implements sensible measures to avoid it in future.

These could include changing the way something is handled within the company and installing a warning mechanism so that IF the same problem is about to recur, it will be caught instantly.

Here again, your accountant can help. You will find out more about the “how” once we do the Client Requirements Analysis that you received as a bonus service with the purchase of this manual.

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Safeguarding your profits In the final analysis, a company only makes very small profits if one compares the profit with the turnover or cash flow.

As you know, only a very small portion of that is actually profit.

Problems cost money. The longer the problem is allowed to go unnoticed, the more money needs to be spent in solving it... and the more time (that could be used to produce income) is required, increasing the cost yet again.

It all eats DIRECTLY into your profits.

Not only does it cost money to SOLVE problems but you also lose time which turns into lost income. Any unnecessary problem creates expenses, if nothing else than in form of “income that you could have made but couldn’t because you had to spend the time solving a problem.”

That’s the logic of it.

But even if we throw that aside — and it’s your privilege to do so since it’s your business and you don’t have to accept anyone’s truths but your own — then we have yet another aspect which may well be far more important than profits.

And that’s preserving your motivation and joy of life!

Nipping problems at bud can have an enormously positive, motivation-increasing effect on the life of a business owner.

It comes down to this: Which would you rather use your time on — solving life-threatening problems or concentrating on the positive aspects of your business?

Some choice, eh?

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LEARNING PRACTICAL FINANCIAL PLANNING Financial planning is somewhat of a fuzzy concept for most of us. Financial experts and accounting firms use such complex professional vocabulary. It’s as if they were speaking a foreign language or some secret code which only their colleagues can understand.

If the subject of financial planning seems confusing, don’t worry, you’re in good company. The vast majority of owners of small-to-medium sized businesses don’t have a degree in economics and find financial planning somewhat of a mystery.

And it’s definitely not THEIR fault. Accountants just make it into a mystery by using unnecessary professional terminology.

In fact, it’s a wonder if anyone can make heads or tails out of the professional jargon used in accounting.

And yet, as explained earlier in this manual, financial planning is actually very simple. Provided you get the information in “deciphered” form and your accountant explains the trends in understandable English, it’s really easy to make the correct decisions in financial planning.

The whole thing needn’t take more than half an hour every month... and that’s INCLUDING the clear-text reporting and consultation with your accountant on the developments of your finances!

Demanding useful knowledge that you can actually put to use When the push comes to shove, LEARNING is the crucial element that’s usually missing in the basic accounting service.

With learning I mean that your accountant should give you information in USEFUL form so you get the benefit of becoming more and more adapt in using it in your company to manage your finances.

In other words, he should TEACH you how to do your own financial planning so that you can make all the decision concerning your company.

The accountant should NOT make these decisions in place of his client. Yet, that’s what happens if you don’t have a monthly get-together with clear-text reporting on each developing trend of your finances COMBINED with some step-by-step advice on how to use it.

Definitely, the accountant should BACK UP your work and be there for you in case you want help to verify the correctness of your decision. Naturally, he should stand by to develop easy step-bystep programmes to help you handle some specific problem IF you ask him for it.

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But he should always strive at enabling you to do your financial planning and NOT bypass your right to make your own decisions.

You’re the Chief Executive Officer and it’s your company. It’s your right to make those decisions.

Without a monthly service in which the accountant explains the development of key figures and helps you to plan accordingly, it just doesn’t get done... and the end result is that your accountant decides these things when he does your yearly accounts.

So, if you want to be the one calling the shots, demand that your accountant facilitates such monthly service.

It’s the responsibility of your accountant — the financial expert whose services and support you’ve hired — to ENABLE you to do your own financial planning.

To give you long-term benefits, his service must include such a learning element.

Not only that but he must also ensure it’s delivered in an acceptable format.

It must not be patronising. It must not use professional terminology wherever things can be explained in plain English — and where they can’t, he must define those special words and concepts in a respectful manner.

The attitude problems of some consultants and adult educators In our world, education is seen as something which only children and pre-adults engage in. As adults, we feel that we already know.

Adult education can have a stigma attached to it; it’s as if the need to study would mean admitting to being behind the rest of the population.

Naturally, many business owners dislike the idea of “going back to school.”

This hesitation is not helped by the fact that so many consultants act in a manner that can only be called stupid: They speak to a business owner as if to a child, patronizingly telling what he should think about his business, spiced with condescending remarks about his lacking ability to run his own finances.

That’s wrong.

You should NEVER accept this kind of attitude from a consultant.

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They do it in the mistaken assumption that business owners only buy consulting services if the consultant can show how his services are NEEDED... and, lacking the ability to explain the POSITIVE aspects, they use belittling and veiled threats of “how your business will go under unless...”

A business owner is at the top of the society in terms of ability and perception. Just because he isn’t an expert in the consultant’s subject does not make him into a child or a simpleton.

If you would turn the tables and try explaining the basics of your business to an accountant, you would see how little HE understands about it... and, if he is honest about it, how slow and frustrating it is to get him to understand even the simplest things about your industry.

It would be just the same as when he explains things to you. You’re no less of an expert than he... and, quite frankly, if HE uses intimidation and belittling to his clients then it’s HIS expertise and intelligence that should be questioned, not yours!

Therefore, don’t accept condescending attitudes from anyone.

If your accountant is really an expert then he will recognise YOUR expertise also and speak to you respectfully and he will have patience to go through those basics, step by step, until you feel comfortable doing your financial planning.

Demand to know HOW to do it yourself You’re entitled to benefit from the service you’re paying for.

Having the accountant do everything for you will forever keep you in the dark on the subject.

Essentially, you chose to go into business because of your ability to DO things and get others to do things for you. But, just like in any management task, it’s vitally important to KNOW how each specific task is performed.

It’s not that you HAVE to do everything personally.

You only have one pair of hands so you need people to do things for you. But you want to have the ability to OVERSEE what they do. You want to be able to CHECK that they do the job right.

You need to know how it’s done to verify that others do it according to your standards, right?

That’s one side of it. Another is that you don’t want anyone in your organisation to become irreplaceable... and you don’t want to be at someone’s mercy either.

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Thus, why not expand these basic principles to cover accounting services as well?

Why not demand that your accountant departs SOME knowledge on financial planning every month so that you can become more and more skilful in planning those finances on your own?

Trust me, if YOU get your hands into it and start setting half an hour aside every month for financial planning, very soon you’ll do a MUCH better job of it than any accountant ever could.

After all, you know your company and business activity better than anyone else. And, once you get the amazingly simple basics of financial planning, you’ll see how easy and pleasant it is... and how your planning will exceed the abilities of your accountant’s when it comes to YOUR company!

The reward is an ever-increasing ability to do better... and freedom from dependency on your accountant which in itself equals more control over your own company.

After all, which one would you prefer — being forever dependent on your accountant’s judgement... or learning to use the information he provides and do your own financial planning?

There’s no need to feel apprehensive about financial planning. You have ten times what it takes and, once we do the Client Requirements Analysis on the telephone, I will prove it to you!

That’s the long and short of it. A good accounting service includes an element of learning for the client.

Anything less just doesn’t make the grade!

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MORE CONTROL OVER THE FUTURE OF YOUR BUSINESS Are we trying to say that you’re NOT in control of your own business?

Absolutely and definitely not. There’s no such intention at all.

But we are saying that one can always have MORE control over one’s business.

This is an area in which there’s practically endless potential for growth.

I’m sure you agree that it’s practically impossible to have perfect 100% control over every aspect of one’s business. There’s just so MUCH of it, there are so many areas and functions, each with so many smaller functions under it... it just isn’t possible to have EVERYTHING in perfect control all of the time.

Thus, the viewpoint of this chapter is that, no matter how good control you have over your business, you can always get even better.

But you would do so only if you personally want it, not because someone tells you that you should.

Financial planning and management is an area of the business that could often markedly increase profits if we devoted just a bit more time to it.

Yet, this is the area in which most owners of small-to-medium sized businesses struggle. And the reason for that is a very special hurdle which we cannot cross without some help from an accounting professional.

Is it possible to make correct decisions without accurate and timely information?

We’ve grown to consider decision-making as something that’s extremely difficult.

But we seldom come to think WHY it is so difficult.

Looking at decisions in general, we can see that not ALL decisions are actually difficult. You won’t have any trouble deciding whether or not to eat. You won’t worry over whether or not you’re able to come up with the correct solution to an equation like 2 + 2 = 4, will you now?

So, what’s different about those examples compared to difficult decisions?

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Well, these examples are very simple problems, of course, and we’ve probably been faced with those problems before.

But that’s not really the reason why these examples are such easy problems to solve.

The actual reason making these problems so easy to solve is that you have full certainty on the DATA on which these decisions are made.

In other words, you have no doubt as to what are the specific information UNDERLYING and INFLUENCING the decision.

This is easily proven. Try solving THIS equation: 2 + X = ?

Not so easy any longer, right?

Obviously, if you knew neither “X” nor “?”, it would t would not be possible to solve this equation with ANY kind of certainty. You could guess, but you could never be certain that your solution is correct... or even CLOSE. Clearly, it’s not your ability to solve problems that’s suddenly diminished. The thing that has changed and made the problem unsolvable is that too much of the DATA on which it should be solved is missing or too uncertain.

And so it is with any decisions. More importantly, so it is with business decisions. Only much MORE so.

Business decisions are much more complex to start with than our examples. There are more facts and factors, many of which are partly unknown or fully hidden... it’s simply more complex and, thus, much more confusing decision-making.

There are many things to ponder when trying to make an important decision.

Do you have ALL the pertinent data needed for making the decision? Are all of these facts equally important, do they affect the outcome to an identical degree each... or are some facts more influential than others? Are there some facts in there that don’t actually belong there?

You get the idea. There are just SO MANY factors involved and we have too little certainty on each to feel confident about the correctness of our solution.

Therefore, decisions become difficult.

And you don’t need me to know that, more often than not, the business owner is forced to make decisions without even the most elementary facts.

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Instead, he has to go by guestimations on most of the facts and just do the best job he can under the circumstances.

That’s why it often feels like driving in the dark at 100 mph with no headlights. A situation springs upon us and we HAVE to make a decision then and there... and usually without sufficient time to investigate the facts or familiarise ourselves with the circumstances.

The dynamic forward movement of the situation demands a decision, regardless of whether or not we’ve had sufficient time to investigate and verify all the facts underlying the decision.

No wonder we don’t exactly enjoy the idea of having to make difficult decisions...

How to gain much higher certainty on the correctness of our decisions If only we could have better certainty on that our decisions are correct...

Well, you can.

The correctness of a decision (and certainty of the results it produces) depends on the certainty and correctness of the INFORMATION on which we make the decision.

The DEGREE of certainty of the facts on which one makes the decision will directly influence the likelihood of CORRECTNESS of that decision.

If ALL the facts are uncertain (unverified for correctness, not estimated as to the degree those facts pertain to the problem) then it’s practically impossible to reach a correct decision.

If SOME of the facts are uncertain then the correctness of the decision is in jeopardy.

And you can be certain of the correctness of your decision only when every fact underlying the decision has been examined, evaluated for relevancy and verified for accuracy.

When I say “correct decision” I simply mean “a decision whose effects are constructive and effective in the way you intended.”

Whatever you decide to do in your company is, of course, solely your business and nobody else’s.

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Nobody has the right to tell you what to do. No-one but you can decide what’s right and wrong in your business and for your company.

Here, I’m merely explaining how decision can be made easier.

In fact, if you KNEW all the facts pertaining to the decision, if you knew they were accurate and correct, and if you knew that you have ALL the data pertaining to that problem, and that every fact was in correct order of importance... it would be very much easier to make that decision.

Decision making would not only be easier but you would also have high certainty on that your decision is correct and the best possible solution for that situation. The decision would produce exactly the wanted kind of results that you envisioned.

Financial control — the foundation of business success Whenever we have a major problem in business, its source can be tracked to MONEY in one way or another.

And so it is that if you had an abundant source of income with a high profit margin, you would NOT have any DIFFICULT and UNWANTED problems at all.

Of course, you would still HAVE problems but they would be self-created in the sense that you would want MORE income and MORE profits. Abundance of money doesn’t guarantee freedom from all problems.

But it is likely to make unwanted and survival-threatening problems disappear.

If one has sufficient financial resources then most corporate problems can be solved.

No doubt you already have finances under control. Commonly we understand that to mean monitoring billing and collections, considering each expenditure carefully, keeping documents in good order and so on.

But it also includes INCREASING of income and profits. And, if you look at the POTENTIAL available in this area, I’m sure we can agree that it is actually LIMITLESS.

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Controlling finances includes controlling income and profits. Obviously, every business owner HAS the ability to do that.

It’s only when we look at the DEGREE of it — the extent to which you can actively influence your turnover and profits — that we begin to perceive how much there is to be gained.

No miracle pill but a steady and continuous increase Your accountant will be the first to tell you that there’s no magic wand by whose wave you could double or quadruple your cashflow or profit within days.

And so it is.

But there IS a way to achieve results which, when you look back a couple years from now, will most definitely APPEAR miraculous.

That way is a constant, gradual increase of your control over finances little by little, month by month.

That gradual but consistent increase in your ability to control income and profits along with the whole area of finances comes only if you can obtain accurate and correct information constantly.

To ensure you get this information from your monthly accounts is the best way to start on that road. In fact, it’s probably the only way to ensure a continuous gradual increase in one’s ability to control income and finances.

After all, the key to increased control is accurate and timely knowledge of the development of every key financial figure within your business activity.

Once you know that, once you get the information analysed and explained understandably, nature will take its cause. Your goal is to expand income and profits and, once you know what is needed to do just that, you will do it.

The good news is that IF this is done on monthly basis, you usually need only SMALL actions to correct and utilise emerging trends within the business activity.

No huge and risky decisions. An END to ever having to implement big and sudden changes due to some danger.

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Admittedly, the gradual end of big problems combined with a continuous secure increase of finances may feel a bit boring after few months. But it’s advisable to get your excitement from elsewhere...

This gradual increase is not only the most effective way to maximise positive development but it could also be called “the lazy man’s option” as any correction requires only a minimum amount of work if taken on early enough.

This is where laziness is an asset. Arrange things so that you only have to do little things — you’ll save a lot of time and energy!

More control equals more of those results you’ve envisioned How do you achieve BIG objectives? How do successful businesses reach their size, sale volume and high degree of viability?

Little by little.

It’s not the speed, it’s not the force, it’s not their financial or professional resources... it’s doing things little by little but with persistence.

Most goals are far too big to be reached in one big burst of energy in one swell swoop. Doubling your income (and, possibly, the profit margin also) cannot be done in one go with one push, no matter how strong and able you are.

But there isn’t a single goal in this world that would be too big to be reached BY A GRADUAL APPROACH. No goal is too big if you can divide the actions into little doable things small enough for anyone to do.

Thus, the secret of huge achievements lies in the ability to break the big goal down into doable small steps, small enough to be done within minutes every day or with only an hour spent weekly or monthly.

If you can divide a large goal into a large number of doable little steps, you bring big deeds down to manageable small actions.

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If you can MONITOR these actions (steps and statistics) continuously to find what’s needed (and to verify that what you do is working) then miracles become mundane.

Then it’s just a question of persistence and patience.

It’s not the strongest guy who wins in business. It’s not boxing or a competition of any kind.

In business, the winner is the person who has broken down the large goal into doable steps and then just simply CONTINUES taking those little steps!

Get your accountant to help Ambitions are crushed in our mind rather than due to failure. One failure will make us twice careful about embarking on new projects.

Thus, most “battles” are lost before we even take the first step toward the goal. Not knowing how to start, how to divide it into those small steps... the fear of failing... all these can make us give up before we’ve even take the first step.

ANY large task seems overwhelmingly insurmountable when you look at it as one big undivided whole. It seems gigantic and impossible.

But it’s only because you’re looking at it from the beginning.

When it’s still AHEAD, any worthwhile goal appears challenging and its attainment is likely to seem beyond one’s abilities.

That’s just human nature; we are prone to agonising over goals we want to reach or have to attain. Such a goal challenges our abilities and it’s not unknown for Man to feel apprehensive about the possibility of going after it and then NOT reaching the goal.

Understandably, nobody likes to try and then fail. This makes us hesitate taking on any challenge that seems to carry the possibility of failure with it.

Yet, any achievement, when broken down to palatable, bite-size things IS attainable.

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So, is it really that we doubt our own abilities... or is it simply that we try to make the decision BEFORE we’ve figured out how to map out the route and divide it into small, doable phases which, each on their own, could hardly be called challenging?

Improved financial control comes from just such a division of the whole task into little routine actions.

Get your accountant to help you.

You only need to choose the correct financial figures and statistics which are then monitored monthly and the changes (developments) analysed and presented to you in brief but understandable form.

Get your accountant to understand you’re not a trained accountant — get him to explain things to you from that angle.

For hidden behind those hard-to-understand professional concepts are some extremely simple facts.

Once you have those facts and get your accountant helping you on which small corrections to do every time (and, if needed, help in planning HOW to do those things), increasing your control over you whole business activity won’t be difficult.

It won’t be even challenging. But it might be enjoyable... and it certainly will be rewarding in terms of saving and making money!

Revitalise your goal and go for it Remember those goals you had when you started your business?

Well, they’re still valid and those goals are now fully attainable!

Look at your income today. How much would you want to increase that? What would be an ambitious yet realistic increase this year, next year... within five years?

What would you LIKE to achieve with your company, if you could achieve it?

For you can, you know. Perhaps not exactly in the time you set for it, perhaps not exactly reaching the ultimate goal... but always more, always higher than without setting the goal.

Set your goal and hold onto it.

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If you break it into small-enough steps and start walking, you CAN reach it.

And you’ll reach it much sooner than you ever thought possible.

And it’s going to be a lot easier than what your apprehension MADE it look like when you were faced with the challenge.

It’s not a question of financial education but one of persistence... and the right kind of help from your accounting firm.

Reach for the sky, get reasonably priced expert help to create those doable steps... and you will amaze yourself!

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SLEEPING AND BREATHING EASIER Having to worry is one of the most negative side effects of running one’s own business.

Ultimately, you are responsible for anything and everything within your company. Any problem not solved by others ends up on your desk sooner or later.

Unfortunately, it’s often “later” rather than sooner.

By that time it’s usually had enough time to grow into something that’s not easily handled.

As time passes, more and more such unwanted problems take us by surprise. Each represents a danger. Each forces us to stretch ourselves beyond the limit in order to solve this threat to our survival and/or prosperity.

Little by little, one by one these unpleasant surprises insert a fear into our mind. We grow to accept that, DESPITE our best efforts, new problems will forever keep popping up from (seemingly) nowhere.

Consequently, we start dreading the next surprise. Enter worry, enter sleepless nights and the feeling of living on the edge of disaster.

Yet it doesn’t have to be this way.

If you don’t like being confronted by big problems...

We’ve already discussed how big, unmanageable problems come to be; they need lots of TIME to develop into such nightmares.

From this, we get a simple formula of avoiding problems: Don’t give them time to grow undetected!

If the passage of time is the element that allows problems grow into nightmare-producing nasty surprises, then it follows that an early-warning system detecting problems much earlier — when they’re small and easily handled — will soon remove those difficult monster problems.

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Small problems are easy to solve.

Big ones aren’t.

Small problems are inexpensive to solve, unlike their big brothers.

Also, small problems are quick to solve at the time of your choosing, unlike the pressing dangers into which they will develop given enough time.

Some business owners actually think that small problems are FUN to solve, simply because it’s so easy and they know what an enormous favour they’re doing for themselves by nipping it in the bud!

Thus, if you don’t want to be confronted by huge, life-threatening problems... create an earlywarning system so you’ll detect the problems much earlier... and you’ll NEVER have to face those nightmare-producing monsters again!

Go for the quality of life you deserve At the end of the day, isn’t it so that the life we live should be enjoyed?

No doubt we agree that it’s better to spend your time in positive expectation of a promising future than dreading and stressing about possible problems.

As a business owner, you provide work and livelihood for a large number of people, most of whom are probably not in your personnel. You keep the economy rolling and do the long hours often without adequate compensation for it.

The least you could expect is that you can spend your free time without having to worry.

And you can.

All it takes is that you get yourself an accounting service that has those vital elements of an earlywarning system and support in solving problems.

In the next chapter, we’ll go through the “insider secrets” of how you can find such a service.

Read it and go for it... and you’ll find out personally how an early-warning system added to your basic accounting services can keep worries away.

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But before that, allow me to ask you something.

Do you remember those early days in your company and the enthusiasm you felt when you came to your place of business?

Remember how excited you were and how you ENJOYED running your own business?

And then look at how you feel about it today.

Now, answer this: Do you still have that same degree of positiveness and enthusiasm?

If yes, then the best way to ensure it continues that way is to get an early-warning system.

And if you don’t feel that way any longer, remember that you CAN regain the same positive feeling again.

Problems are, after all, transitory things and if you get your accountant to help you solving the current problems and locating new ones early enough, life can be just as positive as was in those first few months of business.

Go for the quality of life.

Whether or not you realise it, you are a very important person for many people.

You deserve better so go for a quality of life with far less worries!

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HOW TO EVALUATE AND COMPARE ACCOUNTING SERVICES Whether or not you have an accountant at this time — and regardless of whether you decide to change accountants — it’s vital to possess the skill to evaluate and compare accounting services.

If not now then sometime in the future, you may want to change accountants.

Or you may have to if your accountant retires or sells his practice... or you relocate or require a higher level of service than what your current accountant can deliver... or whatever.

Also, it’s not a bad idea to be able to evaluate what you GET for your money even if you have absolutely no plans to change accountants.

Whatever your situation, knowing more on estimating the true VALUE of accounting services can only benefit you since you’re paying for something and want to know whether you receive the best service your money could (or should) buy.

Traditionally, the problem has been that you really need to be an accounting professional before you could actually evaluate whether or not your accountant delivers a quality service.

But in this manual, we let you in on the “insider secrets” so that you can reach relative certainty about the quality of accounting service without having to become an accountant.

Most of these tips are not available anywhere else.

We’ve gone through several areas and aspects of accounting so that you can choose which one.

Use them all, use only some or use none as long as you KNOW these pointers.

So, to end off this manual (before the bonus pack), let’s take a good long look at how you can compare accounting services without any professional knowledge of accountancy.

Comparing the cost of accounting services Obviously the monthly cost of service is an important factor in comparing different accounting firms. Nobody wants to pay more than they have to.

Yet, to get any meaningful comparison on the price, we must first consider what that service would give you and what it’s all-round cost is likely to be.

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See. The actual COST of your accounting service includes how much (or little) it helps you to avoid costly problems and/or increase profits.

Thus, even if you would get your accounting for FREE it might turn out to be your biggest expense if it didn’t offer you any HELP in avoiding costly problems and if it gave you no information on how to utilise the positive trends constantly emerging within your company.

It would be VERY expensive although you pay the accountant absolutely nothing!

Thus, you have to evaluate WHAT the accounting service offers.

Will the EFFECTS of the service be good, bad or indifferent to your company?

Do they CARE what happens to you, will they keep an eye on the development of your books and finances, will they NOTICE if something goes awry and TELL you about it soon enough and in an acceptable and understandable manner?

Try to estimate the END COST of the accounting service rather than just compare the monthly fee they’re asking (and per-document costs and whatever specific costing methods they have).

The CONTENTS of accounting service can be VERY different.

Oh yes, they all include keeping your books, doing monthly and yearly accounts and whatever else tasks you include into it such as tax filing, payroll and so on.

But those are routine tasks known to every accountant on Earth. Those things everyone knows how to do.

The differences between accounting services come outside those routinely tasks.

How in-depth is their knowledge of taxation? How carefully do they follow the changing legislation on taxation, how insightful are they in recognising and applying legal tax savings to your accounts?

Do THEY notice the possibilities for saving without you having to point them out for them?

No matter what the monthly fee, an accountant will always have a financial effect on your company beyond that.

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If the accountant does very little then you may lose out on many opportunities as positive trends within your business activity are not found and thus cannot be utilised. You won’t find the problems at their infancy but many will be allowed to grow unnoticed into costly monsters.

Of course, the reason for such poor service — and the hidden costs it brings on top of the apparently low fees — can vary.

It’s not necessarily only the accountant’s fault. He may not have a more developed service available. Or you can wish it upon yourself by insisting only on the lowest possible monthly fee.

Whatever the reason, the actual cost of such service can be very high although most of it is hidden and won’t directly show in the books.

Therefore, look for a service that gives you the best possible circumstances to find problems fast and utilise positive trends immediately. That way, the income and profit you make will pay a slightly higher monthly accounting fee many times over and the actual cost of your accounting service is very low.

“Low” is really the wrong word.

This type of service will actually act like an investment and it can pay itself back a hundred fold!

Estimating trustworthiness and loyalty Ideally, your accountant should be your second-in-command in financial matters. That means that he should act as an executive who sees the need for action without having to be TOLD by someone else.

Essentially this translates into active and self-propelled care taking of your interests: YOU don’t have to remind HIM to do his job but he will monitor your accounts automatically and keep you up to date on any changes, reminding you about deadlines well in advance, informing you about new changes in taxation so you can avoid continuing costly procedures and implement changes to make the most out of the situation.

After all, isn’t that what loyalty and trustworthiness are all about?

A loyal employee or “hired gun” should be wholly concerned with forwarding YOUR interests. A trustworthy staff member or service provider can be counted on to do the right thing at the right time without having to be reminded about it, right?

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Now, this ideal scenario also gives us the basic tool to evaluating any accountant’s — whether current or new — trustworthiness and loyalty toward you.

Of course, if you’re evaluating your current accountant then you already know him or her and can make your own deductions. For that you don’t need any tools.

But when you try to estimate a new accountant’s loyalty and trustworthiness, you need to use some craftiness. You can’t just ASK him “are you loyal and can you be trusted?”

Well, of course you CAN, but what’s he going to say?

“NO?” No point asking a question whose answer can only be “yes,” right?

Instead, there’s another way that will give you a very good estimation of the accountant’s intuitive and native sense of loyalty toward his clients.

IMPORTANT NOTE: Note that we’re only taking about the kind of loyalty explained above — we are NOT suggesting that anyone is disloyal or dishonest if they fail this “test.” It’s merely one way of getting SOME indication about the degree to which the accountant might care about your well-being... and it is not perfect method or an absolute test.

This “test” will favour the more communicative accountant and you should know that ONLY experience from an accountant’s services will be the conclusive proof on how you will enjoy his service and benefit from it. Therefore, use this “test” only as an addition to your own conclusions and impressions, not as the sole decider.

This “test” in all its simplicity is to listen what HE asks from you about YOUR WISHES AND NEEDS IN REGARDS TO INFORMATION. Notice that it’s INFORMATION, not “tasks” that we talk about here.

Every accountant being asked for a quote — or simply negotiating about possible sign-on onto his services — will ask you about the TASKS you need done, things such as...

-

in which form do you deliver the documents (in paper form or do you use accounting software and enter everything into it and only then deliver the data to the accountant)?

-

do you need payroll services?

-

do you want them to verify your tax calculations?

...and so on.

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Notice that these questions concern TASKS he needs to do, not the INFORMATION you want produced to help you manage your company.

Every accountant will ask those questions concerning routine tasks.

But whether or not he will ask you about YOUR NEEDS FOR INFORMATION is another thing.

So, the test is basically to sit and watch whether he asks you questions like...

-

what type of information do you want from him on monthly basis?

-

should the information be in layman terms (does the accountant realise that most business owners don’t easily understand the professional jargon he uses)?

-

what type of advice and consultation do you need on monthly basis?

...and so on.

Don’t ask the accountant. Instead, listen in on whether or not HE ASKS YOU about your needs and wishes on these things that are above and beyond the routine accounting tasks.

That will usually give you a good idea on the usefulness of his service and the degree of loyalty he feels necessary toward clients.

Look for helpful intention Essentially, the responsibility and calling of your accountant should be to HELP you. His intention must be a firm commitment to do everything within his power to see that your business fares well, avoids any unnecessary trouble and gets the most out of its activity in terms of profits.

Now, this does not necessarily mean the same thing as being nice and polite. Nor does it mean that the accountant should only say things that you feel comfortable receiving.

While there’s absolutely no need for impoliteness or intimidation techniques (even negative things can be explained gradually and without arousing undue alarm), you must at all times safeguard your accountant’s right to bring anything to your attention.

Essentially, look at his actions and communication from this viewpoint:

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“Will this help me to do better or does it close the possibility of doing better?

“Can I use this to SOLVE the problem and improve my ability to avoid this problem in future... or is he telling me that this problem cannot be solved and I’m hopeless?

“Does he ENCOURAGE me to handle this, does he act in a CALMING AND SUPPORTIVE manner... or not?”

Look at his INTENTION: Is it HELPFUL (DESPITE unpleasant subject matter when that’s called for), does it seek to establish the positive actions available for you in that situation... or does he merely tell you how hopeless it all is?

Some things will be unpleasant. You can’t adjudicate the helpfulness of his intention from whether or not the subject matter itself is unpleasant.

With helpful intention, his goal is to help you through those problems and ensure they won’t happen again.

If he gives you the right service, those unpleasant things should soon subside and become more and more infrequent AND “less unpleasant” as problems are found earlier and earlier, making them easier and faster to solve.

But you don’t measure the degree of helpfulness in his intentions by pleasantness of the SUBJECT at hand.

That would be killing the messenger.

It’s much more helpful to TELL you about problems than keep silent about them.

But pay attention to HOW the accountant talks about the problem.

If he is judgmental and belittles your ability to ever SOLVE the problem, look out. That’s not helpful. But if he tries to encourage you, if he tries to find ways to get you THROUGH the problem, then no matter how unpleasant it might feel at the time, he IS helping you.

Everyone needs help sometimes. Help that you pay for has to be proven helpful. Otherwise there’s little point in paying for it, right?

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Does the accounting firm have a BASIC consulting package available for tailoring to your individual needs and requirements?

Accounting firms come in all shapes and sizes. It’s not possible to evaluate the quality of service based on the size of the firm.

The same applies to their physical appearance: The office can be either grandiose or tattered, the accountant can be well groomed or shabby... and every shade in between.

None of that is really a good indicator as to how the accountant’s service will benefit you.

But there is an indicator that will show whether or not the accountant is THINKING about the needs of his clients.

See. Every client has his own individual needs. Each industry is different. Each company within each industry is unique.

Your goals and policies for your business, your preferences on how to handle your finances and so on... all these factors SHOULD influence the service you’re offered.

Exaggerating a fair bit, we could say that there are two kinds of accountants; those that still work according to the traditional role of accountants as it was in mid-20th century... and those who’ve developed their services and adjusted their role more toward a consultant for the client than just a dusty old bean counter sitting quietly in a corner.

In today’s competitive market, business owners require some basic consultation and advice on finances. It’s not like it was in the 50’s when companies were institutions. Then things just rolled on without continuous problems and companies were quite stable on their course.

Today, the business owner is faced with far more problems than half a century ago.

The economy is constantly fluctuating, the competition is dog-eat-dog, and businesses have bigger risks, costs are much higher and the slightest CHANGE in income-expense ratio can plow the company six feet deep unless its direction is monitored and adjusted regularly.

With the nature of enterprising having changed, so should the accounting services have changed to accommodate the new reality.

But it hasn’t changed, not with all accounting firms. Some still see themselves as merely organisers of documents, with no added role aside from those routine tasks. Other accountants have realised that much more is needed to give a good service to business owners.

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And here’s how you can see the difference (with all the previously given warnings): Look whether or not the accountant has created some form of BASIC consulting service which he can TAILOR exactly to your needs and requirements.

Look especially for a BASIC service of this type (as opposed to more advanced added-value services) because if he HAS such a service intended for ALL CLIENTS (suitably tailored for each) then he understands the need to give more information to every client.

He might not call it “consulting” as the word has bad connotations to many. Management consultants aren’t necessarily liked by everyone and, if the accountant offers “consulting” it can easily be misunderstood as something negative.

But the gist of it is this: He should already have some type of service that’s COMBINED with those basic “compliance services” — bookkeeping and accounting tasks that every company is forced to get done — which gives you INFORMATION that will make the running of your company an easier job for you.

In other words, he should offer this package to every new client without you having to ASK for it.

In the package, there should be some form of these functions: -

Monitoring of a sufficient number of key financial figures (which you agree upon together)

-

Reporting the development of your finances month-to-month (both in writing and verbally)

-

A guarantee on that the information is delivered in understandable form (and not just as a spreadsheet)

-

The existence of advice and support so that you can get help in solving any problem if you feel you need such help

-

Timely and expedient delivery of this information (so that you get last month’s figures within the next month and no later)

Furthermore, the package should be such that it is totally TAILORED to your individual needs.

With this I mean that it should take into account your NEEDS and WISHES. Your wish may be to have some specific area of the business under close monitoring. Your needs may require some additional key figures to be monitored and, in such case, the accountant should bring that to your attention.

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So, why is it so important that the accountant has already thought out these things BEFORE you approach him?

Well, you don’t want to be his guinea pig, do you now?

And you want him to BELIEVE in such service which he will if he has already figured it out and made it part of his services.

But if he STARTS this service just because YOU are the first one to ASK for it, one wonders whether HE has realised the true necessity and usefulness of such a service to his clients, right?

YOU know it, you have realised it... but he may just go along with you because you insist upon such service.

If that’s the case, then it’s not likely that you’ll get the expected advantages and benefits out of the service...

Don’t be anyone’s testing particle. Don’t let yourself be forced to PERSUADE an accountant to deliver the kind of service you want and need... that’s just a bit too much, don’t you think?

Instead, choose the accountant who actively PROMOTES this service because that’s the best proof that he is convinced about such service and knows how to deliver it... which all comes down to the benefits YOU receive from the service.

With so little added cost you could get SO much more...

I won’t lie to you. An accounting service which INCLUDES monitoring several (additional) key figures will cost you more than if you had your accountant only do those customary basic (mandatory) tasks for you.

But it won’t cost that much more.

Similarly, if the accountant analyses the data and writes a short clear-form report and contacts you for a verbal report, it takes more of his time and requires more of his work... and, obviously, more cost for you.

But again, if the accountant has organised his services then it won’t be THAT much more.

How much more?

Well, that depends on your individual needs and wishes, of course. We can give you an estimate once we’ve done the Client Requirements Analysis on the telephone with you.

But it shouldn’t be that much more than what you’re already PAYING for accounting services.

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However, the BENEFITS of such a service can be surprisingly substantial. What you can DO with the information and support, how much you can improve things in your company and how much easier it can make your own job... the difference is simply amazing.

To really see how such a small added investment could give you SO much more, you need to use your bonus service.

Call me today to set a time for Client Requirements Analysis and you’ll get to define your own individual needs much more precisely than you perhaps thought possible.

Go for the maximum benefits from your accounting service.

In the end, it’s the best choice!

THANK YOU AND BEST OF LUCK! 85 | P a g e

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Thank you for purchasing and reading this manual!

Your trust means very much to me personally and I sincerely hope that this manual has helped you come up with some ideas on how you can utilise accounting services more to your benefit.

I also hope it has managed to show how much the right accountant can do for you and that accounting services have developed quite a bit in the last few years.

If you have questions about this manual or any of the subjects it discusses, please feel free to contact me personally. Also, please contact me for the Client Requirements Analysis at your convenience. It’s a special bonus for you and done on the telephone. See “Bonus Pack” for a presentation on this service and what it can give you.

Thank you again and let me end off by wishing you and your company the best of success!

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BUSINESS OWNERS PROFIT GUIDE

Bonus Pack

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As a special bonus, I’ve included our Client Requirements Analysis service for you as a thank-you for purchasing this manual.

Since the idea of doing any kind of “analysis” with an accounting professional may make one hesitate, I wanted to give you some information about this service beforehand so you know there’s nothing to worry about.

Client Requirements Analysis is basically an interactive interview done on the telephone. I have a list of questions which are in understandable English and which any business owner can answer easily and comfortably.

You don’t need ANY documents or figures. You don’t have to know anything about accounting.

And promise that I won’t ask you about the financial situation of your company or any information that’s confidential or would require you to get additional information not available to you then and there.

Instead, what you know about your company is needed... and this service only works with the owner or top executive of the company, so you do need to avail yourself to do it. The offer is valid only to the owner or top executive since this service cannot be delivered to anyone else.

But let me just repeat that what you know now is more than enough to answer these questions.

After all, the whole idea is to define what YOU want and that can only be done BY what you know now.

All of the questions are such that you can answer anything you want. There are no “right or wrong” answers and no trick questions whatsoever. You will not be “lead” by the questions and we will not make you wrong for your decisions EVER. Instead, it’s very friendly, interesting and relaxed. No accounting jargon, no negative issues whatsoever.

And I promise that many of these questions are such that they will give you some new ideas on how to improve the accounting services you’re already paying for and utilise accounting to make your job easier and more profitable.

This interview is for the purpose of defining what you want and need from accounting. It is not a sales interview and we will not offer you our services during or after the interview. If you do want to get a quote from our accounting firm then we will offer you a chance to meet face to face later on for that purpose.

I am not a salesman but a consulting accounting professional, so you can feel completely at ease on that and any other account!

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The only reason why you should take advantage of this special bonus is for finding out more about what type of accounting service would benefit you most.

We’re not here to sell that service and you’re welcome to use the knowledge you’ve gained with your current accountant. My goal is only to give you more insight into what is available from accounting services and show you how these services could be tailored to suit your wishes and needs.

I very much want you to HAVE this Client Requirements Analysis so that you can then have a full picture of what you can achieve with the information available in your accounts. Together with this manual, the Client Requirements Analysis will complete the knowledge and “graduate” you as a business owner who will know exactly how to find the best service at the lowest cost.

Now, that’s not too bad to have, is it?

The Client Requirements Analysis only takes about 20-25 minutes. It’s comfortable and interesting... and it may well be the best invested half hour you ever spent!

So don’t hesitate to contact me for setting a telephone appointment for your Client Requirements Analysis.

Thank you again and the best of success to you and your company!

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Generally, businesses stay many years with the same accounting firm. In some cases it can be 10-20 years.

But sometimes it becomes necessary to change accountants.

This is often the case when the company’s needs for financial information increases. A business can outgrow its accountant’s level of service.

Often the business owner may simply want a more modern all-round service which gives the kind of “almost realtime information” about finances that will allow for more ways to instantly utilise opportunities.

Or it could be that the working relationship with the accountant isn’t what the business owner wants. Sometimes you want more advice or different kind of help, be it more detailed backup on how to handle something or simply that you want to be briefed in plain English instead of trying to decipher spreadsheets.

At times there’s no alternative but to change accountants.

This is especially so if the current accountant is months in arrears with your monthly accounts, forcing you to guide your business in total darkness and without the benefit of accurate financial data. This will lead to having to make important decisions without needed information which can end up being very costly and extremely frustrating for you.

Whatever the reason for changing, we know that the change itself presents some obstacles.

Why changing accountants can be difficult By survey, we know that many business owners feel apprehensive about changing accountants.

In some cases it’s because of the personal friendship that has grown between the owner and accountant over the years. Business owners are embarrassed to terminate this relationship because it seems such a hostile thing to do.

Other business owners don’t have that specific problem. Instead, they worry about the transition itself; will it go smoothly, will they have to pay double for any work already done which the new accountant then has to do again, and so on?

Some even fear that their accountant will try to impede the change over to the new accountant as much as possible by whatever means — sending a huge last bill and then refusing to give the documents before it’s paid off... and so on.

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Of course, the fear of the unknown is perhaps the biggest obstacle of all. Will the new accountant be as good — well, actually and hopefully BETTER — that the one you’re leaving for him?

There can be many difficulties in discontinuing the current service but most of these can be dealt with if you get the new accountant to help you.

Preparing for a smooth transition First of all, we hope that this manual has given you ways to reach a relatively comfortable level of certainty on how to find out in advance whether or not the new accountant is better than the one whose services you’re planning to leave.

Don’t look for absolute certainty, only a relatively comfortable level of assurance. If the truth is known, one can never reach total certainty about future cooperation with someone BEFORE the fact.

So look for positive indicators which point to an improvement when compared to the service you’re about to leave. The better the new service, the likelier it is also that cooperation with the new accountant will go smoothly.

Once you’ve established that the new service will be better, the best thing is to then make the decisive move and sign on.

The longer you wait, the likelier you are to leave it... which means you’re back to square one with your old accountant whose services you’ve already established as non-satisfactory.

So, evaluate the new service and, if found to be something along the lines detailed in this manual as the ideal service, ride with the wave and go for it.

If the SERVICE is good then it might not be a good idea to try finding the same service at a lower price.

Tailored accounting services are few and far between so you might not find another firm delivering exactly the same service... and you do have to go through the same process of evaluation with EACH firm.

If you don’t, it can happen that you have the picture of the FIRST firm (whose services you examined thoroughly) but then take the NEXT firm’s quote at their word... which may well lead you to signing onto just the same type of service you’re trying to get away from.

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When you search for a special service (like the one explained in this manual) to be tailored to your individual needs, FINDING one like it is a major undertaking.

Keep your eye on the service, not the monthly fee asked for it, provided the fee is within acceptable limits. You’ll be hard pushed to find exactly the SAME service for a price comparison.

Here, it’s better to go for the service that allows you to get the most out of your business. That’s the idea with such a service — you have to take into account those positive results which YOU will be able to produce with the help of this better service — so there’s little point in looking only at the cost of the accounting service.

It won’t tell you how much YOU will make because of choosing that specific service tailored to your needs and wishes.

Once you have chosen the new accountant, you can then address the problems of transferring your accounts from the old to the new firm.

Getting help to change over First, let’s look at how we can limit any possible damage that the displaced accountant could create.

Many accountants belong to various memberships whose licensing they depend on. These organisations are the governing bodies of ethical conduct for accountants. They offer a direct line for complaints of clients of their members in case of any improper actions.

Find out which association your current accountant belongs to... or ask the new accountant to find out for you.

Then, if the old accountant is upset and threatens (directly or indirectly) to cause you trouble, this can usually be handled quite easily by letting him know that any such action would lead to an official complaint to the governing body which he belongs to.

Of course, these are extreme cases and very few accountants resort to threats or attempts of hampering the transition. The coming and leaving of clients are part of their life and they understand this even if they don’t necessarily LIKE to lose clients.

The easiest thing for you is to ask the new accountant to handle the transition — in fact, you can even make this a condition in the contract. There’s a professional code between accountants and this way you can be assured there’s no double billing or undue delay.

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If you’re not friendly with the old accountant, you can give a power of attorney to the new one so he or she can even handle the termination of the contract.

Of course that’s not an option if the superseded accountant is a personal friend.

How to handle termination of contract when the accountant is your personal friend More often than not, personal friendship is the biggest obstacle in changing accountants.

It could be that the accountant was a friend of the family already before you signed onto his services or that you’ve befriended him during the long years of cooperation.

Whichever, you dread the idea of having to tell him you’re leaving. You shudder at the embarrassment of bringing such unwelcome news to him.

It’s as if you were betraying him, repaying the years of friendship and loyalty with a knock on the head. It feels absolutely horrible to think how devastated he’ll be when you break the news to him... if, in fact, you can ever bring yourself to do it.

It’s very understandable to feel this way.

If examine this problem, we see that there are TWO separate issues involved here.

For the first, there’s the question of breaking the news to him with minimum unpleasantness. We have to find some way to explain this to him so that he won’t feel bad about being replaced.

For the second, there’s the issue of WHY we MUST change accountants. The services of this friend are no longer on par with what we need in order to secure the viability of our company. The livelihood of so many people DEPENDS on that and we don’t have a choice, really.

It’s a question of survival, the point where every one has to fend for himself.

So, you’ve established that it’s in the best interests of your company — and everyone dependent on it for their livelihood — to change accountants but you also don’t want to offend or humiliate your accountant friend in any way.

The first of these things is potentially huge in its future effects on YOUR success and the second is that potentially embarrassing (but, luckily, SHORT) moment when you have to break the bad news to a friend.

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In such a circumstance, it’s obviously vitally important to GO THROUGH with the intended change as that will affect your future to such a decisive degree financially.

It’s important to do it... but is it actually important to be brutally honest to your friend about the reasons behind your decision.

Do you have to tell him that his service is not good enough and that his help is not helping you?

Of course you don’t.

There’s no reason to go into the reasoning behind your decision. You don’t have to explain yourself to anyone and, in this case, it’s better to choose your words so that the message is as acceptable as possible to your friend.

In other words, you don’t lie but you avoid telling any facts that will hurt or humiliate your friend.

Perhaps there’s a reason beyond your control which could be used as the main explanation on why you have no choice but to change accountants... and just leave out the rest?

Are you going to apply for financing sometime in the future or possibly considering a joint venture with some other company... and these have suggested that they require you to have a certain size of accounting firm (or a higher level of accountant) as a prerequisite for negotiations?

Or could it be that you have recently employed an executive who has “forced” you to change into a bigger firm because he needs specific consulting and reporting to do his job properly?

Or, perhaps your financial director wants to begin using a specific brand of accounting software which the current accountant cannot integrate with?

If you write the facts on paper with the viewpoint of finding a reason that your friend could accept without feeling that you’re replacing him because he isn’t good enough, you should be able to come up with a useful explanation which will allow you to terminate the contract without humiliation to your friend.

You want your explanation to be such that it makes your friend feel ACKNOWLEDGED for his good work over the years and avoids any hint of displeasure toward him or his services.

Thank him for the time you’ve cooperated. Tell him how much he has helped you and how grateful you are. Reflect on some actual times when he saved the day for you.

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side with him; both of you regret the unfortunate circumstances that force you apart professionally. Invite him to a social gathering to show that you are still his friend.

You can, you know.

There’s no reason why you can’t remain loyal to your friend. Necessity supersedes loyalty in business simply because, unlike socially, cooperation is caused and maintained only by PROFIT. The business of a business is to produce a profit. If you employ a friend whose input COSTS you money instead of earning a profit, you really don’t have a choice.

Your company is responsible for the livelihood of a large number of people (counting also those people employed by your trade partners, subcontractors and service providers, whose salaries you participate in) and you cannot jeopardise the survival of many just to save the feelings of one.

But you can minimise the hurt down to a level where it won’t damage the friendship.

You can PLAN your strategy so that more than 50% of it concentrates on acknowledging his good work and the rest is built from causes beyond your control so that you, too, regret that this cooperation has to come to an end.

This way, it’s not all bad news and you can take pride in having gone the extra mile to save the feelings of your friend. It’s also much less embarrassing to do.

Don’t lie. But try to find a way to emphasise those facts, intentions and possibilities which will allow you to break it to your friend so that he can live with your departure. There’s nothing to be gained by hurting his feelings or by belittling his help.

Plan your approach carefully and then just go by your plan and tell your friend that you are sorry for not being able to continue. Do it as soon as possible for the longer you wait, the harder it gets.

Ask for the new accountant’s help in the transition and possibly also in planning how to break it to your friend. Accountants have experience in these matters as they see clients come and go. They understand the realities of life better than you might give them credit for.

If you use these tips, I guarantee that it will be much easier to break the news to your old accountant.

Done right, he will actually feel good about the acknowledgment and proud for having delivered a good service to you for so long.

Of course, none of this is needed BEFORE you’ve found a better accounting firm whose services you’re convinced will help you achieve the goals you’ve set for your company.

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So don’t worry about it now.

First look for the new service and then use these tips (and engage the new accountant to help you) and you’ll see how good YOU will feel about having retained a friend and acquired just the kind of accounting service that you wanted to!

CONTACT INFORMATION

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www.goldpatslawrence.com.au

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