What Do I Actually Do As An Accountant?

It’s well understood that Accountants are important advisors to a business. What an accountant does is often thought to be understood. Your parents had an accountant and you probably listened in to some of their meetings or heard about your parent's frustrations with an issue that the accountant helped resolve. 

What is going on behind that phone call or meeting? 

Accountants are not made equal. We are all different. We have all had different training and focus on different practice areas. 

You have tax specialists, GST specialists, Business Advisory accountants, business valuation specialists, forensic accountants, corporate accountants, auditors…and more.

I class myself as a Business Advisory Accountant. It’s my job to understand my clients business. From the ground up. All the nitty-gritty details; service / product sold, markets operating within, staff structure and the tax implications of the aforementioned.

What is normally not understood, is that it’s also my responsibility to understand and therefore help my client understand;

The risk exposures of their business and how to mitigate these. 

For instance, the risk of business failure. What this could mean for the company, shareholders, and the wider personal situation. Is your family home exposed? Will you be able to continue to afford your children's tuition fees? Can cash flow keep up with your mortgage coming off its fixed term, especially if your equipment is due for an overhaul or a key member of staff is leaving? 

Risk is a broad category and involves a plethora of areas. 

Have you been thinking of starting another business? or do you have a share portfolio?

Thinking through my clients' wider business and estate structure is crucial in determining how these additional areas of risk are dealt with. Isolating these risks through the utilisation of various entities, and ensuring the financial flows between each are thought through and safe is what you’ll find me thinking about quite often. 

Risk then flows through to other areas of my practice. For instance, the valuation of your business. How do we maximize this value without increasing your risk?

For example, you could sell a minority stake in your business for $X in order to receive a capital injection that will allow you to access a new, higher-margin market that will then increase the value of your business. But what power does the minority shareholder have over the company and you? If you wanted to sell your company, could they get in the way and prevent the sale?

So, yes, it is my job to understand your financial position. But this at a higher level is about understanding your risk. Business is a risk, but it can be managed.