Small businesses change accountants at will just as we change our clothes. The only difference is that we change our clothes because we have to but small business owners change their service providers such as small business accountants whenever they sense some of the common mistakes that are discussed in this article.
If you are an accountant working for a small business, chances are that you may fall victim of one of the common pitfalls that many small business accountants fall into. As an accountant, you need to be on the lookout for signs of problem and guard practice against them.
This article is an attempt to identify common pitfalls that accountants fall into and make recommendations that when followed will go a long way in protecting your accounting practice from failing.
15 entrepreneur mistakes that small business accountants should avoid
As a small business accountant, the temptation to let your guards down is high especially when things are going on well. Take developing an accounting information system for example, many small business accountants fail to give after sales customer services to their clients as soon as the system goes live.
Neglecting Personal finance advice
The headlines are filled with news of accountants that have gone bankrupt in recent past. This is as a result of finance professionals not practicing what most of them preach. No one needs a prophet to be told that consumers of your accounting services will look for a way out as soon as the news of their personal financial situation deteriorates.
This in other words is same as trying to be over sophisticated when dealing with your client. There is no point in making things look more difficult as they seems. You will create a barrier between you and the small business owner and this will ultimately lead to them shopping around for a replacement.
Waiting till the last minute before they start gathering accounting information
Another pitfall that many small business accountants are guilty of is waiting till the last minute before asking for source documents and other information from their clients. This is one of the reasons why there is too much pressure on accountants to get the tax return ready before the deadline.
Not paying attention to details
Very many often, small business accountants tend to overlook details while working on the books of accounts of their client. This is common when they have automated the accounting and bookkeeping in place. Spend that extra 20 to 30 minutes examining that excel template that you have prepared for the small business you work.
Too shy or proud to ask for help
This might sound strange to you but it is a common mistake that solo accountants make. As professional business advisers, small business accountants should we should seek professional advice ourselves rather than being a jack of all trade. In as much as accountants take some law courses as part of their accounting training, it simply is not enough to serve as a substitute for professional legal advice.
Over reliance on one client
To guarantee your independence, you have to diversify by getting more clients. This can be done through effective marketing of your accounting practice. Even though accounting code of ethics of many professional accountancy bodies has guidelines on this, many accountants in practice tend to ignore that. This is partly due to the difficulty in acquiring clientele, but that should not dissuade you from trying.
Encouraging your clients not to invest in accounting software
One of the most common cheap and dangerous accounting advices that you hear people give is that it is a waste of money to buy accounting software. Well, am not sure where this all started from but I see some professional accountants buying into this. My suggestion is that you stop giving out such toxic advice if you want to succeed in your quest as an entrepreneur. There are free accounting software that you can encourage your clients to use but be smart about this.
Neglecting their online reputation
Your reputation is your greatest asset as an accountant. You have to guard it jealously as your personal brand as an accountant determines your success. Don’t make the mistake of neglecting your online reputation. Be mindful what you post online especially social media and forums.
Giving unprofessional advice to cut tax
In a bid to entice and retain customers, some sole accounting practitioners resort to encouraging fraudulent and sharp accounting practices amongst their clients. Giving advice that promotes tax evasion is a no go area so stay away from it no matter what.
Not performing credit checks and back ground checks on their employees
It is unthinkable for accounting firms to employ people without performing proper credit checks and background checks. Gone are the days when a company pays through their nose for credit checks. Your customers will take their business elsewhere if they find your staff members wanting.
Not giving out freebies
Everyone, no matter how wealthy still appreciate some gifts. Not giving out some freebies is a mistake that you have to watch out for. Things as little as customised seasonal cards can do the trick so don’t bother about the size of the present.
Not understanding the accountpreneur vocabulary
The traditional accountancy courses only equip accountants with the bricks and mortar technical competency and this leaves many qualified accountants handicapped in the real digital world. Avoid the mistake of not equipping yourself with accountpreneur vocabulary. At the very least, you should know the meaning of the lingos discussed in the article on the link above.
Becoming too familiar with your client
Familiarity threat does not only affect your opinion on sensitive matters but also makes the client tired of your service and may start thinking of getting a new business adviser. No wonder the saying goes ‘too much familiarity brings contempt’
Not being in tune with technology
Many accountants have no clue of what you talking about when you speak bytes and bits. Accountants now use technology as everyday tool thereby making it an unforgivable crime for being comfortable with the business technology wave. As new partners, the trader that you consult for expects you to provide useful recommendation on trending piece of technology.
I strongly recommend you become CISA certified as an accountant as this will expand your horizon in both business strategy and creating value through the use of IT.
This article has touched on some pitfalls that every small business accountants should watch out for. Your small business accounting practice contributes to the overall development and growth of the global economy so avoid these common mistakes and stay in business.