Ever wondered why your accountant doesn’t tell you anything? I mean, you’ve been a client for years now and not once has he or she picked up the phone and said “Bill, can we grab a coffee in the morning, I want to talk to you about your business.” Why is that?
REASON #1 – You didn’t ask
The accounting profession rewards logical thinking. And logically, if you didn’t ask your accountant to tell you something about your business, then they won’t.
So, what were your instructions? Did you explicitly ask for help or did you think it was implied because after all, isn’t that what an accountant does?
REASON #2 – They don’t know much about your business
It’s shocking, but sadly it’s true. Your accountant may not have much to add simply because they don’t know much about your business!
Why? Well, first of all, understand that it’s possible to be a very good accountant without truly understanding how a business works. They are never mutually exclusive disciplines, but the intersection is often smaller than most people imagine.
And accountants that allow themselves to become typecast into the role of a tax agent do so for a reason – it lets them stay within their comfort zone. These are the accountants that we like to laugh at in the movies and that make an appearance in ads like ITP’s ‘Colin the income tax professional’.
They are very process-driven and they are focussed only on ‘the outcome’. When that outcome is the lodgement of a tax return or BAS, they only need to know your business at a superficial level. So, that’s what they do.
REASON #3 – Fear of being wrong
Even Colin probably knows more about business than he consciously acknowledges. But would he tell you if he did? The answer is often ‘no’.
And it comes from perfectionistic tendencies. What if your accountant ventured outside of his or her comfort zone to offer some advice and they were wrong? Wouldn’t that mean that you would leave the firm and that reliable, year-after-year, tax-time fee would be gone forever?
That’s viewed as too big a risk. Especially when you didn’t ask for advice in the first place! No, it’s safer to be silent and leave you to your own devices.
P.S. This is the same reason that your accountant prefers to say ‘no’.
You ask – “Should I spend $45,000 on marketing my business?” and the accountant says ‘No’. You will keep your $45,000 and no one will ever know what the other outcome might have been. But if you had spent the $45,000 and not generated the return on investment you were after, you might just say “hey, you are partly to blame for that because you told me to go ahead and do it!” Therefore, the safe answer is ‘no’.
REASON #4 – They are cost sensitive
Traditionally, accountants have adopted a ‘do-and-charge’ model. i.e. they do the work, they multiply the amount of time it takes by their charge-out rate and that’s how much you pay. The issue is that that model is not at all linked with the amount of value created. In fact, it rewards inefficiency!
This is a fact recognised – whether consciously or sub-consciously – by you. So, quite rightly you place downward pressure on prices.
But your quest for value can mistakenly lead the accountant into a mindset that you are ‘tight’ and you don’t like to pay accounting fees.
So, the last thing they want to do is spend time thinking about ways to add value to your business only to have to write that time off because a. you didn’t ask them to do it and b. they might not be right and c. you might not pay for it!
Note – happily, accountants are starting to adopt fixed fees and value-based pricing.
REASON #5 – They are too busy
Accounting firms stack their schedule with ‘recurring revenue’ (i.e. preparing your annual financial statements and tax returns) and in doing so, leave themselves little or no spare capacity to take on project-based work. The way they see it, carrying spare capacity into the new year is risk – if they retain productive capacity but fail to sell it, then they have lost money.
But this promotes an issue for you, the client. And that is that the accountant in such a firm is too busy to step back and think about your business and what they are seeing, let alone take you out for coffee to talk about it!
So, there you have it. The Top 5 reasons why your accountant doesn’t tell you anything. In our next post, we will tell you what to do about it.