Carol Cheesman left the corporate world to set up a thriving accountancy firm which has hundreds of small business owners as clients. She tells us what the most frequently-made mistakes are by business owners, and what to look out for when choosing an accountant.
How difficult was it to move from a large accountancy firm to start your own firm of accountants?
It was difficult in the sense that I was leaving a large organisation with a wide client base to set up my own business where one of the main pressures was developing my own client base. An issue that applies to many business startups! However, I was confident in my own ability and now have a client base that I am very proud of.
What were the biggest challenges you faced, starting up, in such a competitive industry?
Funnily enough, the thing I remember is running out of loo paper and keeping the stationery cupboard stocked. Suddenly, I didn’t have the back up of a large organisation. If the loo paper ran out I was the one who had to go to the shop and buy some more. If a chair broke, I was the one who had to get it fixed or replaced.
Do you see the revolution in ‘cloud accounting’ as a threat to traditional accountants, or do you think that web-based accounting software is a win-win for everyone involved?
I don’t see the Cloud as a threat. I think that in my business, security of data is paramount. I wouldn’t want to see any of my clients’ business uploaded to the Cloud. We keep all their data secure right here on our own server. It’s safer that way.
One of our most-read articles on Company Bug is ‘do you need an accountant for your limited company?’ Do you think some business owners underestimate the importance of hiring an accountant?
It’s true that you don’t need an accountant for a limited company. But would you really want to do without one? Using a firm like mine takes away a lot of the heavy lifting that’s involved in managing a company’s finances. Do business owners underestimate the importance of hiring an accountant? Most definitely, yes.
Aside from cost (which is just one factor), what are the most important things business owners should look out for when talking to prospective accountants?
Quite simply, chemistry. Do they get on with them? Are they potentially members of your team? Do they show an all-round interest in your business? Are they willing to meet you regularly, face to face? Of course, cost is a factor, but it shouldn’t be high up on their list. It’s all about feeling comfortable with the potential working relationship.
What are the most frequently made accounting mistakes committed by owner managers? – For others to learn from?
The most frequent error is to believe that cash equals profit. Growing too fast without proper cash flow. In fact, growth that’s too fast can be as devastating for a business as failure. I would advise any owner manager to make regular cash flow projections. They should know their break-even point, how much are their fixed overheads, how much have they sold, and do so on a weekly basis.
Many cite ‘poor cash flow management’ as the leading cause of business failure. What measures do you think business owners should take to keep their cash flowing?
This goes back to my previous answer. Quite simply, have a cash flow forecast – so they know what to expect – and monitor it. They might also consider factoring or invoice discounting to make sure they get paid promptly.
As a great believer in building long-term relationships, do you think that online networking provides a viable alternative to doing business face to face?
There is no alternative to doing business face to face. I always deal with clients eye-to-eye, in person. So, I’d say no to online networking.
Carol is Principal of Cheesmans Accountants based in Islington, North London. Always client focused, she regularly meets with clients in person and has a hands-on approach in all of the services the firm offers. Get in touch with Cheesmans for an initial free, no obligation consultation.