Yesterday, I was asked for more context about “bridging the gap between operations and finance”.

That phrase was said to me by a participant after a training workshop and I felt that it is a good summary of what I try to do.

I was a late convert to accounting, having qualified first as an engineer. I then worked in multinationals where I was exposed to Lean. I take the view that accounts reflect the underlying transactions of the business. I think of a business as a process converting inputs to outputs.

When working on projections, the framework I use is to identify and quantify the key activities of the business, then to determine the cost of the resources used in completing those activities and finally scheduling the cashflows for those costs.

I am a big believer that accounts should confirm what the business owner already knows about the business. This knowledge is built up from having good KPIs and a good understanding of the Activities-Resources-Costs so that they can anticipate the results and are not surprised by the accounts when they get them.

I like to apply the concept of PDSA to the accounts. Make a plan (P) – this is the budget or projections. Execute the Plan, Do (D) – run the business. Study the results (S) – use the management accounts to identify any invalid assumptions or gaps in knowledge. Finally, act on the learnings (A) – change the assumptions or identify and implement improvements. So having management accounts is a key part of the business feedback loop.

Finally, I see the accounts as a database of the transactions of the business and I believe they should be analysed (sliced and diced) to help the business owner improve his/her understandings.

I try to have a good understanding of what is happening in the operations of the basis.  Then I consider how that will show up as transactions in the accounts.

Thinking of it this way forces me to have a really good understanding of what is actually happening in the business – the operations – and to be able to help operations to understand and anticipate how their actions will impact on the accounts.

Sorry for the length of this. You challenged me to think about something that I had begun to take for granted.

Outsourced Financial Controller

If you struggle to get reliable financial information, or you cannot understand the information that you are getting, then you should consider taking on an outsourced or part-time financial controller.

I was talking with a business owner recently who is running a substantial, exporting business.  They don’t have any qualified accounting staff in-house.

At the end of the year, the external accountant prepares the annual accounts but these accounts arrive several months after the year-end and they don’t shed much light on why the business is getting the results they are getting.     The business owner isn’t happy that they are helping him to manage the business.

Option Of An Outsourced Financial Controller

I suggested that he consider using the services of an outsourced financial controller.  He hadn‘t realised that this was possible.

The option of having an outsourced controller is quite common now.  There has been a growth, in recent years,  in the number of companies taking advantage of the services of outsourced financial controllers.  This is partly due to the rise in the use of computerised accounting systems, which make it easier to analyse and understand the information, and also due to the increased awareness of the need for better financial management skills.

Outsourced Financial Controller

What Will An Outsourced Financial Controller Do For You?

1. Understand the business

The first thing that I would do on starting an assignment for you is to understand your business and what information you will need to run the business.

Typically, I will want to get familiar with your products or services, with your customers, with your production or delivery process, and finally with your suppliers and what you buy from them.

I will also want to be very clear on the goals of your business so that I can provide better support.

2. Design systems to give you the financial information that you need

I would use my understanding of your business to identify what sort of financial analysis you need for the business.

This could include how your sales are analysed, how your purchases and overheads are analysed, and if you should be making use of cost centres or departments.

Usually, I would help you to identify your Key Performance Indicators (KPIs) for the business although the KPIs should not be just financial.

3. Optimise the financial processes

Next, I will look at what you are currently doing with your financial information.  I will want to understand the workflows within your accounts department – identifying who is doing what, what controls you have in place to secure the company’s assets and what sort of systems you have and if you are using those systems well.

4. Assess and develop existing staff

I will also want to ensure that everything that needs to be done has been identified and allocated to someone and that they are clear on what they have to do and that they have the appropriate skills and experience.

While getting familiar with your business, I will be interacting with your staff and I will form an opinion on how much support and/or development they might need.

Usually, I work with the existing staff – coaching them so that they are comfortable doing what needs to be done.  But sometimes, if there’s no one to do the job, I help to hire someone to fill this role

I will also be available to answer any questions that they might have.

5. Prepare budgets/forecasts

I like to prepare an annual financial budget for the business.  This will be based on assumptions about growth, staffing, costs, and investment plans.

The budget will show how profitable the plans of the business are and will highlight any problems with cashflow.

Depending on the business, this budget may have to be updated 2-3 times during the year to reflect developments that are emerging as they work through the year.

The budgets will feed into the monthly management accounts.  By comparing actuals to budget the management will develop their understanding of the business and will become much better at budgeting.

6. Cash management

Most businesses need to manage their cash closely.  Even when a business has large cash reserves, you find that they have built these up by managing cash closely and that they continue to do that.

The financial controller will develop short and long-term cash forecasting and management procedures and will provide guidance for the staff on how to work with these.

7. Providing financial inputs to decision making

As the business is carried on, issues crop up that will require decisions and as an outsourced financial controller, I can provide key financial inputs to those decisions.

To do this I draw on the understanding of your business that I have built up by working in your business and also on the reliable accounting information that is now being prepared in your business.

Outsourced Financial Controller

What To Look For In An External Financial Controller

It would be expected that an outsourced financial controller would have good accountancy skills.

Secondly, your outsourced financial controller will need to be able to develop a good understanding of your business.   He/she will also need excellent commercial awareness.

You should be looking for an outsourced controller that has already held a full-time controller position and can bring that experience to your business.

Additionally, because most outsourced financial controllers have many clients they will be exposed to lots of different businesses.   They can take the best ideas and practices from one sector to another.

Your outsourced financial controller will have to have good relationships with your management and staff and will require to be able to communicate accounting information in a way that is easily understood by a non-accountant.

The outsourced financial controller will likely have a number of different clients and will need to be able to manage time and to be able to easily switch between clients without having to spend a lot of time catching up.

How Much Time Will A Financial Controller Need To Input?

That depends on the business – both on its complexity and on its stage in the business life cycle.

A young ambitious business with challenging growth plans will need more time than a mature stable business.

It will also depend on the quality of the in-house accounts staff.  The more you can delegate to them, the less time the outsourced financial controller will have to input.

In my experience,  the time input can range from as little as a half-day or a day per quarter and can be as high as 2 to 3 days per week.  It really depends on the outputs you want and the resources already within the business.

Typically, I find 1-2 days per month the most common.

Normally, before taking on an assignment, I will sit with you and understand your business and needs.  We then discuss the different elements of the service allowing you to customise the service to suit what you need.

Who Needs An Outsourced Financial Controller?

If you are having any of the following problems, then you should consider hiring an outsourced financial controller.

  • Disappointing profitability
  • Cashflow problems
  • Accounting surprises at year-end
  • Difficulty  explaining the performance of your business to your bank managers
  • Having aggressive growth plans that require tight financial management
  • Thinking about bringing external investors on board
  • Not satisfied with the explanations that you are getting from your annual accountant

Management Accounts vs Annual Accounts

The focus of an outsourced financial controller is usually on delivering management information.  This will help management understand the financial effects of their decisions.

The focus of the annual accountant is usually on compliance – preparing the annual accounts and the annual return and the tax returns.

Do you need more than one accountant?

You don’t have to have more than one accountant, but sometimes different people have different skillsets and you may be better off having 2 or more people with specific skills rather than one generalist.

Some business owners like to have one accountant who provides outsourced controller services and can also handle the compliance work.  Other owners like to have the year-end work done separately. It doesn’t matter and it’s really down to your own preferences.



Running a business can be demanding but there are resources available to modern owner managers that were not available prior to this.

Having the services of an outsourced financial controller available lets the business owner have much better information and analysis skills available at a fraction of the cost of a full-time controller.

Over To You

Have you had the experience of working with an outsourced financial controller?  Did you find it beneficial?

If you have any comments or advice to offer to others, feel free to leave a message in the comment sections.

right type of accountant

Which type of accountant is right for you? Do you need to hire an accountant but you don’t understand all the different types of accountants and how they differ? Your relationship with your accountant is very important. A poor decision could have negative impacts on profitability or the amount of taxes you’ll pay. You need to choose well.

Although I am a chartered accountant myself, I have worked in industry with all types of accountants – chartered accountants, certified accountants, cost and management accountants, and certified public accountants. I think that I have a good understanding of the value of each of the qualifications. I have also hired lots of accountants and I didn’t always hire the chartered accountants.

Different Types Of Accountants

What are the main types of accountants found in Ireland?

Chartered Accountants (ACA/FCA)

Chartered Accountants are members of the Institute of Chartered Accountants in Ireland. There are about 25,000 members of that institute but they are not all working in Ireland.

The main training route for chartered accountants is to enter a training contract with an accounting firm in practice. The contract allows for time off for study which is a big advantage for the trainee. While working in practice, the trainee usually gets very good exposure to preparing accounts and tax returns for many different types of businesses.

The chartered accounting exams have a broad syllabus so they will also get exposure to other aspects of accounting. After qualification, they can go into any industry where they can get further experience in many different roles.

In recent years, a new training route has been added for people not working in practice. However, to qualify to set up in practice themselves, successful students will have to gain experience in practice after passing their exams.

Certified Accountants (ACCA, FCCA)

Certified Accountants are a member of a global organisation that has an Irish Branch.

Students can either work in industry or in practice.  They usually have to do the study and exams in their own time.

You don’t have to be working as an accountant while you are studying and doing the exams. However, once you have passed the exams, you have to have relevant supervised work experience to be recognised as a full member.

The syllabus for the exams is broad and students get a good technical base.

If a successful student wishes to go into practice after qualification, they will have to show that they gained relevant experience working in a practicing firm.

Types Of Accountants

Cost and Management Accountants (CIMA/FCMA)

Cost and Management Accountants are members of the Chartered Institute of Cost Accountants. They specialise in providing accounting support for management.

Students typically work in the industry and, like certified accounting trainees, do the study and the exams in their own time.

From my experience working with Cost and Management Accountants, their training tends to put less emphasis on the reporting and tax work than Chartered or Certified Accountants.  I feel that they would be stronger on costing and use of accounts for decision making.

Certified Public Accountants

This is a younger body but it’s similar to Certified Accountants in that students can study and do the exams independently of their work.

The CPA institutes set their own exams.

Again, like Certified, to become a full member the applicant has to have relevant supervised experience.  Again, to go into practice the accountant must have relevant practice experience.

Importance Of Accounting Qualifications

Not many people realise this, but there is no restriction in Ireland on using the title accountant.  Anyone can call themselves an accountant and can set themselves up in practice as an accountant.

While I have come across some very good unqualified accountants and, while I have also come across some very poorly qualified accountants, I think you have a much greater probability of having a good experience if you work with a qualified accountant.

Qualified accountants will have to take regular update courses (Continuing Professional Development – CPD) to keep up with changes in tax and legislation so they maintain their qualifications.   If they are in practice, their institute will insist on them having professional indemnity.

Types Of Accountants

Type Of Accounting Work Needed To Be Done

When choosing an accountant, the key thing is to be clear on what type of work you want them to do for you.

Annual accountants & tax work

If what you need is simply annual accounts and tax returns, then an accountant in practice is likely to be a good fit for you.  Most practices tend to focus on this type of work.

Providing accounting support for management

If you are looking for help with managing profitability, preparing costings or projections, and helping with decision making, then you want someone with experience in that area.  You should probably be looking for someone who has industry experience.   You should be talking to the many accountants now who are offering part-time or outsourced financial controller services.

Raising funds from investors

If you are looking to bring in investors, then you want someone with that type of experience.  They typically refer to themselves as corporate finance specialists.   You will be looking for someone who will know the key people interesting in investing in your sector.  They should have experience putting together the documentation that an investor will require to help evaluate your proposal.

Liquidation/Insolvency/Restructuring work

If you have a business in financial difficulties that may need restructuring, you are likely to be looking for someone who has experience in that area.

Bottom Line

As I said already, I have worked with and have hired all the different types of accountants. While I value a qualification, in my experience, the right type of accountant is more important than the actual qualification that they hold.

I believe that to find a good accountant you need to look for a number of characteristics:

  • Qualified

    They should hold a recognised accounting qualification and they should be maintaining their education through a CPD programme.

  • Experienced

    You want them to have relevant experience.  It doesn’t necessarily have to be in your industry – sometimes new eyes bring new insights – but it would be better if they have done similar work for someone else previously.

  • Interested in your work/business

    You want someone who is interested in the type of work that you want to do and interested in helping you to succeed. If you want to understand and improve your profitability, then you don’t want someone who prefers working on annual accounts and tax. Equally, if you are happy with the performance of your business and all you want to be done is the annual accounts and tax, then you may not want someone who is more interested in understanding why you are getting the results that you are getting.

  • Attitude/Approach

    This is the last quality but, in my opinion, it’s the most important. You want an accountant who is on your side, who will be anxious to do a good job for you. You want them to be organised so that they don’t miss deadlines. Finally, you want them to be proactive so that they give you heads up about what is happening in the business and you don’t want to have to wait until it happens before you and, then, they react to it.

Types Of Accountants


While I think that using a qualified accountant is important, I am open as to which qualification.  I would put much more emphasis on the personal characteristics of the accountant.  You need to meet with them and understand their experience, their interests, and their approach to the work.  To do that properly, you should also talk to other clients of theirs and understand what their experience of working with the accountant has been.

Your Turn

This article has been written from my own experiences.  I’d love to hear your thoughts on this topic too.

If you disagree or feel that I missed out on something, feel free to share your thoughts in the comments and feel free to ask if you have any questions.

AccountsPLUS not good fit

I know that AccountsPLUS is not going to be a good fit for everyone.

Over the years, I have worked with many different colleagues and with many different clients.  As I review my experiences, I realise that there are some types of clients who don’t benefit from my approach.  Equally, I get more enjoyment and satisfaction out of working with some clients more than others.

I feel that we offer less value if you fit the following criteria…

You believe that your accounts are a necessary evil

You think that your accounts are just something you have to do for the taxman or the bank or the Companies Registration Office.

How I think

Your accounts should be the voice of your business.

I like to understand, and to help the client to understand, why they are getting the results that they are getting.  I believe that your accounts contain useful information which should be analysed to drive understanding and improvements.

You believe that you have a straightforward and easy to manage business

There are some businesses where the owner will have a very good understanding of what is going on and will not need account information to tell them what they think is obvious.

How I think

I don’t believe that there are many of those types of businesses.  If that is true, then I agree. You do not need the experience and skills that I can bring.

But I also believe that, from time to time, even those businesses hit rocky times and can benefit from external insights and help.


Your main focus is on minimising your tax bill

That is the only thing that counts to you.

How I think

I prefer to focus on the amount of after-tax profits that you keep.

You can make 40K in profits and maybe pay 8K in taxes keeping 32K.

Or you could improve your business to make 60K in profit and maybe pay 13K in taxes while keeping 47K.

I would prefer to be in the second case, where I have 15k more of after-tax income.

You think your business is already doing as well as it possibly can

You are running a tight business and you know what is going on and why.

Nothing is perfect and there is a point in striving for perfection.

You think that you just have to work hard and no accounts will change that.

How I think

I haven’t come across a business that could not be improved in some way.

I am always looking for an improvement opportunity – something that will help increase sales or profits.


You don’t see any benefits in planning

Plans don’t always work out anyway.  There are too many variables at play and planning is essentially sticking your thumb in the air.  You just think “why bother?”

How I think

I like to quote Verne Harnish, who in his book “Scaling Up” says “A fundamental responsibility of leaders is prediction.”  Your accountant can help you see make those predictions by creating planning models that help you see the effects of events both inside and outside the business.

I also believe that the process of planning and then comparing your actual results to your plans helps to develop your understanding of your business.

Preparing plans can provide early warning of upcoming problems that can be avoided by increasing your awareness of what to watch for and by helping you spot indicators that are off.

You keep basic records and you don’t like technology

You keep the basic documentation and believe that it’s the accountant’s job to take those documents, organise them and use them to prepare your accounts.  Furthermore, you believe that the accountant should use his/her software to sort it all out. You don’t want to be worrying about software licenses, updates, hardware or backups.

How I think

There is cheap and easy to use software available now that makes it much easier to organise your information.  My time as an accountant can be better used analysing that information to help clients to manage their business.

You are looking for the lowest price accountant

For you, preparing the accounts is a simple job and you want it done as cheaply as possible.  You think you will get the same result from an accountant so why pay more

How I think

I know I am not the cheapest, but I also know that I am far from the most expensive.

Certainly, I help clients improve profitability by having better information and better management tools.  In addition to that, I help clients save money on taxes through better tax planning.  Most importantly, I give clients peace of mind by improving their overall control of the business.  My clients tell me that the benefits they receive are worth multiples of the fees that they pay.

You don’t see your accountant as part of your management team.

It is important to think of your accountant as an outsider who does a very specific job.  You don’t involve your accountant in any of your management decisions.  The accountant’s job is to summarise it all at the end of the year and do your tax returns.

How I think

One of the key roles of the business owner is to make decisions.  He/she needs quantitative information to make the right calls. Your accountant can provide that information and should be included as a key advisor.


Accounts are something you get done at the last minute

You don’t worry about your accounts until your deadline is approaching.  Then you gather everything and send it off to the accountant. By the time, you get your accounts the period covered is long past and there is nothing you can do about it anyway.

How I think

Your year-end accounts should just be a matter of taking the management information that you have and using it to complete your filings.

You should be analysing your information as early as possible so that you time to identify and take appropriate action.

To paraphrase Verne Harnish -” your year-end accounts should confirm what you already know about your business”.  There should be no surprises.

If you are a business owner, you probably have an accountant. Sadly enough there are some common problems that arise when working with accountants. Having a good relationship with your accountant is very important.  This is because your accountant prepares and helps you to interpret the accounts for your business and ensures that you comply with various regulations regarding reporting and taxation.

As we can see, having a good accountant is important, however, if your relationship is not fruitful then you definitely need to think about changing.  If you decide to change you don’t want to end up with the same problems just working with different accountants.

I have been a practicing accountant for many years and during this time I have taken on several clients who left their previous accountants because of the problems they encountered when working together.

So let me highlight some of the most common problems previous clients have faced when working with accountants. I will also let you know how you could avoid or at least minimise them.

Little or no explanations for your results

There will be times when you will be expecting a certain profit but when your accounts are complete the results are different – usually not as good as you expected. Out of confusion, you try to look for an explanation so as to understand your business and identify how to improve your results. Unfortunately, your accountant can’t provide an explanation or any other insight.  This will definitely lead to problems working with your accountants.

How to avoid this

Try to speak to existing clients of the accountant you are considering moving to and ask how the accountant has responded in similar situations in the past.

You can also give the accountant a couple of scenarios that you have had and ask what may have caused them.  This way you will learn a lot from how they approach answering these questions.

Little or no advice is given

Some accountants are reluctant to give advice.  I had one client who asked his previous accountant if he should renovate his offices. The accountant simply replied, “That’s up to you.”

Technically speaking, that is a correct answer but what the client is really asking is “how do I make the decision.”

You need to be able to ask your accountant for help with major decisions.  Additionally, your accountant has access to all of your financial data and if he/she spots something that could help, you want them to tell you.

How to avoid this

When you meet up with a potential accountant, have one or two questions that you can ask. This way you will get a sense of how they reply.

You can also speak with other clients to see if they are always provided with relevant and useful advice whenever they need it.

Too much contact is with junior staff

In many firms, the principal can be very busy and often delegates the interaction with a client to employees.

While it’s normal, and more cost-efficient, for junior staff to do the number-crunching work, you want your accountant to share his/her expertise and experience with you. At least, the principal should review the file, become familiar with your situation, and provide analysis and advice. This is because the junior staff is unlikely to have the experience or the confidence to deputise adequately for the principal.

How to avoid this

When engaging with the accountant, ask who you will be interacting with, and let them clarify the purpose of the interactions.

Again, find out what happens with existing clients of the same accountant – not clients of his/her partners.

When the accountant is issuing the letter of engagement, you could consider asking that this letter be used to specify the type and nature of interactions that you will have with the accountant and his/her office.

Too much jargon

Many clients report that their accountant is no good at explaining things to them.  The clients give up asking because they don’t get the answers that they need.

Typically, what is happening is that the accountant is so familiar with the material that they unconsciously use jargon which is not easily understandable to most clients.

How to avoid this.

Test the accountant by asking him/her to explain something to you.  Bring a situation that you previously had or something topical for you now and discuss this with them.

You can also ask existing clients how they rate the explanations of the accountants.

Hidden commissions or biased advice

Many accountants earn commissions on sales of life and pension products or tax-based investment products.  They can also earn extra income by acting as resellers for software products.  These practices are more common with larger firms.

These accounting firms may have associated companies that sell software or financial services.  They may appear to be independent but the shareholders could well be partners in the accounting firm. If so, they should disclose any fees or commissions earned that could make them give biased advice when recommending something to you.

If they are a tied agent for a particular life and pension company, that should be disclosed as this relationship likely means that they will not have researched the whole market when selecting the product offered to you.

How to avoid this

Don’t be afraid to ask the accountant if they are earning any fees or commissions on any product they are recommending.

Consider asking them to operate on a fee rather than a commission basis.

Ask them to include a statement in their letter of engagement relating to transparency around fees and commissions.

Recommending systems that suit only them

Some accountants want their clients to use accounting or payroll software that they already use themselves.

On one level this is fine, as it delivers efficiencies to the accounting firm.

However, if the software does not have the functionality that you need then it may not be the best fit for your business.  For example, if you want to use cloud systems but they only work with desktop systems then their proposed solution is not a good fit for you.

How you can avoid this

Ask upfront, if the accountant has any preferences for which software systems they like clients to use and ask how flexible they are around this.

Do a system evaluation before you buy the software and implement any software to make sure that it’s a good fit for you.   I have an article on selecting accounting software called “How to choose accounting software”.

Mismatched Expertise

A friend or business associate may have recommended a particular accountant to you because they were very happy with their service.  However, you may have different needs from your accountant.

For example, your friend may have PAYE income and a rental income portfolio. On the other hand, you have an engineering business.

Clearly, your friend will be looking for basic accounts and tax advice while, you could be looking for support with budgets, product costing, and maybe business planning.

Your friend’s accountant may or may not be a good fit for you.  Pretty soon after starting to work with this accountant you will know whether you have made a mistake or not.

How to avoid this

Try to understand what sort of client base the accountant has.

Does he/she specialise or have sufficient experience in your particular sector?

Consider asking some questions along the lines of how do they handle particular situations unique to your sector. Consider asking if they can outline their experience with your sector.

Lack of contact during the year

Many accountants have little or no contact with their clients other than the few days or weeks when they are working on your accounts.

This may suit some clients but most clients will require some accounting inputs during the year.

Issues arise where it would be helpful to talk to an accountant.  You may have questions that you would like to ask.  There may be legal or technical changes that you should be made aware of.

Not having contact could lead to sub-optimal decisions or non-compliance with certain requirements.

How to avoid this

Talk to existing clients and establish what sort of contact they need and get.

See if this is covered in the engagement letter.  If not, consider including something around this.

Unexpected Fee Notes

Sometimes clients ring up with queries that they think are minor and the accountant should be able to answer off the top of their head.

On the other hand, the accountant sees a more complex issue and undertakes some research and investigation to make sure they are giving the best answer.

The result is that the accountant invests significant time and then bills for this time.

The client may not be aware of the amount of time that has been input and is very surprised when a large bill comes in.

How to avoid this

It’s normal that the costs of responding to minor questions would be covered in the annual fee but issues that take more than 15-30 minutes to address may be charged separately.

In the engagement letter, include something to specify that the accountant will flag when something is going to trigger a separate bill.

You can then have a discussion to see if your request is something that justifies that fee.

Also, check with existing clients of the accountant to see how queries are dealt with.

Why is AccountsPLUS different.

Over the years while working as an accountant, clients have often commented that I am very different from other accountants that they have worked with.  When I try to drill down to understand what they mean a few common responses come up.

They tell me that they can understand me way much better.  They say that I give advice about improving performance and profitability.  Furthermore, they can see that I want them to understand the accounts.   They comment that I have a better understanding of their business because I am more hands-on than other accountants they worked with.

I think it comes from my background and experience.  I relate well to non-accountants because  I qualified first as an engineer and I had no experience with accounting before starting to train as an accountant.

Later I went into industry and my role involved supporting management to understand the financial impacts of their decisions.  In fact, I could see the difficulty they had in understanding accounting information, but I knew that this was down to the way the information was presented.

I also have significant experience working on projects to improve profitability.  I can see how the accounting data can be used to drive the business and I try to use business software to organise the most relevant data and make it available to management.

The bottom line is, my background is very different from most other accountants.


In many ways, the accountant-client relationship is a project.  You need to have a good project definition upfront.

You need to identify what you expect from your accountant and then have a discussion to ensure that your accountant shares your understanding.

Be very careful to do your homework before you decide to hire an accountant for your business.  You are likely to be working with your new accountant for several years and the relationship needs to be excellent. This is the only way you will avoid these common problems when working with your accountants.

If after reading this article, you feel like you need to change accountants but are not sure what to do,  I have an article on changing accountants that might be very helpful – How difficult is changing your accountant.

Over to you

Have you been experienced frustrations when working with your accountant?  What type of problems did you face?

I would love to hear from you, so please leave a comment below.

You are considering getting financial projections prepared but worried about how much this might cost.

You have probably heard a lot of numbers bandied about.  I have heard of business paying up to €5,000 for a set of projections.  Some of those numbers can be quite scary.  Yet, you realise that there are a lot of benefits to come from doing the projections.  What are you to do?

You really want to have a good understanding of how much projections will cost so that you can make an informed decision.

Over the past twenty years, I have prepared financial projections for many SMES of all shapes and sizes.  It;s quite difficult to give a “one size fits all” answer to that question.  It depends on so many things.  Before I explain the various factors, it might be helpful for you to read my blog article on How to Prepare Financial Projections.

Factors affecting cost of financial projections.

Your first time to prepare Financial Projections

If this is your first time having financial projections done, it will most likely take a little bit longer.  For each set of projections, I have to have a model for that business-usually an excel spreadsheet.  If one already exists then that will save some time.  If it doesn’t exist already then I will have to build one.

I have some templates for different types of businesses but nearly all businesses have some elements unique to themselves which means that any  template has to be customised.

The other factor is that we need to understand the relationships between activities, costs and resources.  If you have already prepared financial projections, you are likely to be aware of these relationships.  If not, I will have to spend time with you teasing them out.

What type of business are we preparing financial projections for?

The second key area is the type of business that we are preparing projections for.  Some businesses are pretty simple but others have a lot more complexity.

Over the years I have prepared projections for the following businesses –  professional services, food production, engineering, engineering services, scientific instrument manufacturing, retail, distribution, software developers including SAAS developer.  They were all different and each had its unique issues.

The simplest businesses to prepare projections for are retail businesses.  In that case, the sales should drive the costs of sales calculations and the overhead is usually fairly stable.  Your stock holding levels will usually be the key variable affecting cash flow

If the business is manufacturing, then we need to understand the process.  How many different stages does production go through?  What are the stock holding levels at each stage?  How long does it take to acquire raw materials?

If it’s a software business, then you are likely to have an initial product development costs followed by a period where you will have ongoing product development and maintenance costs.

So you see, that its important that we understand your activities, what they will consume and the payment profile for each of these activities.

Size of the Business

A small business with few employee will be much easier to prepare projections for than a larger business with more employees organised in a number of departments.  If there are several locations that will also have to be factored into.  If you have a sales team or a service team on the road, then we will have to build up the costs for that.

The greater the complexity the longer it takes.

Stage of development of the business

If you are preparing projections for a start up that usually takes longer than projections for an established business.  The reason for that is that with an established business you have a track record and you have historical information that can be used.  With a startup, you have no history so you have to invest more time in teasing out what the business is going to look like.

Who are the financial projections for?

The purpose of the projections is very important.  If its for investors, then you will have to put a bit more time into making sure that your assumptions are solid and that they can withstand robust interrogation by professional investors.  You will probably have to have prepared a couple of scenarios so that you can deal with what if questions.

If you are preparing them for your own internal use, you will still want reliable numbers but you will likely not be as concerned about presentation and you may  be more confident in your assumptions so you will not be as anxious to explore as many different scenarios.

Do you have reliable figures for the opening position?

Sometimes I have been asked to prepare projections for businesses that don’t have management accounts.   In that case, you have to either start the projections for the last good set of accounts or else estimate the management accounts.

Its obviously preferable and highly recommended that a business have management accounts.  However you  can only work with what you have.  So sometimes, you have to invest more time in trying to establish and be confident about the starting position.

How many reviews will be necessary before you are happy with the outcome?

Once I prepare the first pass, then we sit and review the outputs.  At that point,  any issues that you will have with both the assumptions and other key inputs will become clear.  Depending on the significance of these issues, we will have to invest time in refining the inputs and the assumptions.

For some businesses, there will be no issues.  This is usually the case for more mature businesses where the owner has a really good understanding of the businesses.

For other businesses, typically earlier stage businesses or businesses where the owners have not prepared projections before, then the first pass will usually generate a lot of discussion points and the owner may need to take some time to consider the inputs.  The owner may also need to have a few different iterations run to better understand the significance of the various assumptions


As you will understand from reading the article, there are a lot of factors that determine the costs.   Every business is different and its not possible to give a simple answer as to the cost of preparing projections.

What I can do is give you some guidelines.

The shortest time has been about 2-4 hours to prepare projections for a small retail operation that had already got a good handle on the business.  In cost terms, that will work out between €200 and €500.

For a more complex manufacturing business trying to raise money from investors, the time to prepare projections has been 3-4 days.   In that case, you are looking at a cost of €2000-3000.

I would usually find around two days, say € 1400-1500, is a good estimate for most businesses but, as you will now appreciate, there are many factors that can change that.

Before offering a firm estimate, I prefer to meet with the client, initially, so that I can understand exactly will be involved.  That will give me more confidence in my estimates.

If you are thinking about having projections done, feel free to contact me so that I can give you a cost estimate tailored to your unique circumstances.

I understand.  You are running a business and it’s hard to make money.  Then your accountant comes along and presents you with a high fee, anything from € 600 to possibly €1,500 or more per day for his or her work.  You struggle to understand why accountants are so expensive.

I have been running an accounting practice for almost 20 years now. I know what I have to charge to recover my costs and make a reasonable living.

Let me explain why a good accountant is expensive.

A good accountant adds value

Avoiding Compliance Offences

There are lots of regulations around tax and accounts.  If you get them wrong, you could be hit with substantial penalties and interest   Your accountant will know what needs to be done and will help you with your compliance issues.

Avoiding costly mistakes, making better decisions

As a business owner, you have to make lots of decisions.  These decisions can include setting prices, setting payment terms, investing, hiring, expanding, or contracting.  If you get these wrong, the consequences can be costly.

Your accountant will help you identify the key factors that must be addressed when making your decisions.  He/she can help you prepare financial projections and he/she can help you evaluate the opportunities that present themselves.

Understanding the factors driving your profits

To run a business well, you need access to good information.  You need information about product or service costs, about cashflow, about efficiencies and yields among other things.

A good accountant will help you identify what information your business needs and will help you to put in place systems to capture and report on that information.

Identifying and implement improvements

No business is perfect.  There is always room for improvement.  When you have plans and targets it’s easier to identify where your business is under-performing.

A good accountant will prepare projections and compare those to actual results to give you the information you need to identify improvement opportunities.  They will have the skills and experience to help you implement the identified improvements.

The market sets the price for accountants

Business Owners understand the value that accountants can bring.  They are willing to pay accountants highly because they understand the benefits of having a good accountant.

They can calculate how much the accountant is worth and they will pay that.

Good accountants have the option of getting a job and a salary or setting up in practice.

If an accountant is in employment, they can typically earn between about €40K and maybe €120K pa.

Morgan McKinley, the recruitment company, publish an annual salary survey.   The 2017 survey for Irish accountants can be found here

This survey shows that recently qualified accountants outside Dublin can typically earn from € 40-48K.  With 3-5 years of experience, their expected earnings increases to € 55K.  A good Financial Controller can expect to earn from € 55K-75K and an experienced Financial Director can earn between € 75-110K.

A self-employed accountant in practice would expect to be earning similar amounts.  But the accountant in practice will have the costs of running the practice.  This means that they will need to generate sufficient fee income to provide their wage and their practice expenses.

Practice expenses include costs of marketing and business development, costs of having an office, costs of running that office, costs of ongoing training, costs of motor and travel, and costs of professional subscriptions.  Every office costs are different but are typically about € 15K for a sole practitioner.

That means that someone who is could hold down a financial controller position would need a fee income of 70K -80K to match the salary plus office expenses.

How does an accountant calculate his or her charge-out rates?

Your accountant will not usually be able to bill clients for the full 40 hours of every week.  They are also managing their own business and they need to allocate time for that.  And for attending business development meetings and preparing proposals.  They will also have to attend continuing professional development events.

There’s a rule of thumb that says a typical accountant should be billing 1000 hours per annum. If we divide our € 70-90K target fee income for our financial controller type person by 1000 hours we can see that our sample accountant needs to charge €70-90 per hour or € 560 to 720 per day.

A more senior, more experienced financial director type accountant could earn between €75K and €110K. With expenses of €15K that make €90-125K needed in fee income.  Dividing that by the 1000 billable hours, we see that this accountant should be trying to earn €90-125 per hour or €720-1000 per day.

If they can’t earn the target amounts in practice, the better accountants will migrate into employment and the standard of the accountants in practice will fall.  However, that doesn’t happen because owner-managed businesses value good financial advice and support just as much as the large corporates.

What sort of Accountant do you want?

How important is your business to you?  How important is it to the best professional advice available to you?

If you want to have the best accounting and management support you will have to pay rates that match what your accountant could earn elsewhere.

Do you want to be working with someone with minimal experience or would you prefer someone with much more experience?  Most business owners that I know want the best advice that they can afford because the consequences of poor advice are costly.  The best business owners hire the best advisors and those people cost more because they add more value.

You understand that because you are running your own business and you know how the market works.

If you don’t believe that your accountant is worth the fee they are charging, then maybe you should be looking at changing your accountant.

I hope that after reading this post you’ll be able to understand why a good accountant is expensive but also why a good accountant is a good value.

The other thing to look at is whether you are making the best use of your accountant.  You may be interested in another blog post that I wrote called “Reducing the costs of preparing your accounts”

As always, I would love to get your feedback on this article.  You can leave a comment in the comment section or you can email me at jim (at) accountsplus (dot) ie.

Are you worried about changing accountants?

Are you dissatisfied with your existing accountant but worried about changing accountants? This could be because you are fearful that it would be a lot more hassle than it’s worth?

From time to time, I get asked by prospective clients how difficult is it to change accountants.  Some accountants make their clients think it’s very difficult to find new accountants.  In reality, it’s not that difficult to change at all.

Moreso, many clients have fears things can go wrong when they change them. In this article, I will discuss the issues involved in changing accountants.

Why changing accountants might be necessary?

There are a number of reasons why you might want to change accountants.

It may be that you are simply not happy with the service from the existing accountant.  Or maybe you are unhappy with the newly assigned personnel. The current accountant may have merged or been acquired by another firm and you are not comfortable with it. You might have been introduced to an accountant who seems a better fit for your particular needs.   Honestly, there can be many reasons for changing.

Informing the existing accountants of the changing plans

It’s a rule of thumb that you be the first to let your current accountant know that you are changing accountants. Be well prepared to explain why you are changing and be prepared for them to try to change your mind.

It is very important to request your current accountant to be willing to share information with a new accountant.

In case your relationship is not ok then you can draft a letter letting them know of the upcoming change.

How I go about the handing-over process when changing accountants

As a Chartered Accountant, my professional rules require that I contact the existing accountant. This is to let them know that I have been asked to act for you and ask if there is any reason why I should not take on this assignment.

One typical reason why I would not be able to take on a new client is if there was an unresolved dispute with the existing accountant. This could be about accounting or tax treatment.

If there are no pending issues stopping from taking on a new client, I will ask their previous accountant for copies of what we call the handover information.  This handover information will include the last set of accounts, tax and CRO returns, and the essential background information that I will need going forward.

In my experience, I have never had a problem getting this information within a reasonable time period.

Anti-Money Laundering

Before taking on new clients, I have to comply with the anti-money laundering regulation by verifying the client’s identity. To know more about anti-money laundering read here.

Issues around changing accountant

When changing accountants, there are a few issues to watch out for.

Timing of changing accountant

If the existing accountant is working on accounts or a specific project it’s probably best to let them finish that.  Otherwise, you may end up paying twice for the same work.  However, if you are not happy with the work they are doing, you will not want to stay with them.

If you are on a monthly payment scheme with your existing accountant, just check what you have already paid for and if there any element of a prepayment that will be refunded if you change the accountant.  You may need to check the original agreement that you signed.

If there are any outstanding bills you may have to pay those in full before the existing accountant will release your information.

Most common myths of changing accountant

One myth that I have come across is that if you do change accountant, you are more likely to be audited by the Revenue.  I don’t believe that this is true.  Revenue has software which they use to select candidates for audit and this software is understood to use an analytical approach to highlight issues such as suspicious margins or unusual expenditures rather than the identity of the new accountant.  If the new accountant has a poor track record with Revenue, that may be a factor but for most accountants, Revenue will not be interested in accountant changes.

If you are not happy with your existing accountant, then you should now be confident to make the change.  It is true it might be inconvenient in the short term but, in the longer term, you should be better off.  You need to have confidence in whoever is supporting you on such a critical part of your business.

If you have any questions about this article or indeed about any accounting related items, please contact me on 086 2323525 or jim (at) accountsplus (dot) .ie.

Cost of a Part-time or Virtual Financial Controller

Are you running your own business and struggling with the finances?  You would love to have your own financial controller but you can’t afford a full time one.

You have heard someone mention part-time financial controllers and that sounds interesting.  But you are still wondering how much a part-time or virtual financial controller service would cost.

As with many of these questions, there is no simple answer.  It all depends on what you want from the service.

I have been working as a financial control for many years now.  I was a full-time financial controller when I worked with the multinationals.  Since I went freelance, I have worked as a part-time financial controller for a large number of clients in a variety of businesses.

Providing financial controller services is a professional service and these are usually priced based on the time input.  However, there are a number of different factors that influence the amount of time input.

When I meet with a potential client I will be trying to understand and evaluate their circumstances so that I can give them a proposal that is tailored to their situation.

The factors that I will be looking at will include the following

Existing Accounting Capability

How is your accounting function staffed and what level of skills are available to you?   Will we be recruiting new staff, developing existing staff, or supervising existing staff?  How much can be delegated to in-house staff and how much will be left to the part-time controller?

Accounting Systems

What sort of systems do you have?  Are these well implemented or do they need to be enhanced?  Are there standard routines or do we have to develop and install those routines?

Reporting/Analysis Requirements

What sort of reporting or analysis is required?  Is the infrastructure in place to provide this or does it have to be developed?  Has the potential client got a good handle on their revenues and costs?  Are they confident in their product or service costs?  Do they understand the reported profits or do they express surprise that the profits are not as expected?

Type of Stakeholders

What sort of stakeholders are in the business?  What requirements have they specified for reporting and analysis both in terms of frequency and detail?

Stage of the Business

At what point in the development cycle is the business. Is it a startup with external funding or plans to bring in external funding?  Is it a mature business with fairly steady sales and costs?

Challenges facing the business

What are the challenges facing the business?  Are profitability levels acceptable?   Are they undertaking any significant projects – new markets, new products, new processes, new facilities?

Once I have a good understanding of the current situation for the company, I will then start to work on defining what the desired situation should be.  As part of that, we will set some goals – a mix of development goals and some maintenance goals.

Agreed Workplan for Outsourced FC Services

From that analysis, I will create a work plan (read here on how to create a work plan) which will determine the cost of the service.  This work plan will be presented to the potential client and discussed to come up with an agreed work plan.

The level of work needed varies from company to company.  I have one company where I did a lot of work early on developing the staff and the systems and I now attend them about one half-day per quarter with additional time as they require specific, clearly identified issues.

I have other clients where I am with them for two days per month.  These clients with a higher time requirement tend to be either dealing with some major issues or are still in the development stages of the business.

With good broadband, I can also work remotely.  This can be very helpful if something crops up and it will only take a short time to resolve.  So a skype-type call will avoid travel time and can give the client the answer much more quickly.

Service Cost per month

In terms of cost, it can range from € 400-500 per quarter to maybe € 1500 per month but if the client requires greater inputs the cost will be greater.

From the client’s point of view, what they want to get from the service is the elimination of surprises, a much-improved understanding of their profitability, greater confidence when pricing for their customers, and improved profitability.

To get a better understanding of how we work, feel free to browse through our blog articles.   I suggest this article,  “Understanding the nuts and bolts of accounting”, as a good starting place.

As always, if you have any comments or questions on this article, feel free to contact me by phone(086 2323525)  or by email at jim(at)accountsplus (dot) ie.

Today we have a guest post from John Donagher of BSM. A few years ago, I did some work with BSM on developing the client requirements for RFPs for ERP systems. I worked with John then and he is very knowledgeable about ERP and implementing ERP. John recently posted this on his own Blog.

Most organisations are comprised of multiple departments, and when it comes to implementing ERP the impact is felt right across the organisation. Resistance and apathy are major project risks, so how can they be avoided?

The last thing an ERP implementation project needs is a lack of willingness from parts of the organisation to fully engage with and support the project. Negativity can take two forms: resistance and apathy. The root causes for resistance are typically fear of change and a lack of understanding of the rationale for the project. Apathy often results from a feeling that the new system is being imposed, rather than having views regarding what’s required taken into account. ERP implementations are difficult at the best of times, but dealing with resistance and apathy means even more risk for the project.

The road to developing “buy-in” for ERP starts at the beginning of the system selection process. Getting people involved, ensuring their voices are heard and that they’re made to feel part of the decision-making process is one of the best ways to guarantee their long-term engagement with the ERP project. A starting point is to have every department affected by the ERP implementation represented on the system selection project team. Far too often we in BSM see the Finance and IT departments taking the lead role, and while they certainly need to be involved in the selection project they’re generally not best placed to specify the system requirements in other functional areas. A structured selection process with cross-functional involvement can create a positive atmosphere around the ERP project, with dividends accruing right through the implementation in terms of good will.

Buy-in can also be developed through effectively managing and focussing on the business benefits of the ERP project. Ensuring that business benefits are understood, quantified and owned by the business is another important element in achieving buy-in: a manager who understands how the system will improve his area, and who has bought-in to delivering those benefits, is likely to be a strong advocate of the project. If the project is strongly focussed on business benefits, and managers are clear on what the benefits are and are responsible for delivering those benefits, then the project is far more likely to be successful.

This Blog was written by John Donagher, Senior IS Consultant at BSM. If you would like further information on developing cross-functional buy-in please send an e-mail to John Donagher.