High performing boards often employ an independent adviser who can bring discipline, experience and objectivity. And certainly having the external accountant or company lawyer on the board is common; but it is important to remember that these professionals should act in an advisory role with a ‘big picture’ or business focus.
A pure technician may not be the best choice, and likewise, an experienced member of a large corporate or NZX-listed company may not be the best fit as the mechanics of a SME are significantly different.
How do you know if your accountant is right for your governance board?
Strategic business planning
In this blog, we discussed the importance of giving your strategic plan attention four times a year, and of course at the centre of all strategy is ‘how do we make more money/increase profits?’ Which is why your business accountant is a critical part of business planning – they can provide analysis of retrospective data, as well as assist with plotting your path for the future.
When it comes to being on a board, both on an individual and collective basis, there should be a restless curiosity. The right questions need to be asked to ensure there is understanding of all risks and opportunities, and how proposed plans could affect the long-term success of the business. So this requires an accountant who can see the strategic intent behind the numbers, tables and graphs – because insight without intuition is just yesterday’s data.
Benchmarking for improvement
When it comes to getting ahead, you need to know what others in your marketplace are doing, and how you compare – from performance, to price points, growth and more. And yes, your accountant should be able to provide you with information on competitors, and where you stack up.
This comes down to them understanding your business in depth, and applying knowledge of the industry as a whole to identify areas of improvement – whether it is through price points, service lines, out-of-date procedures, or changes in technology used.
Raising capital for expansion
You know you want to expand your business, but you’re not sure where to get the capital from to action it – so this is where a business advisory accountant can help. Raising capital can be extremely risky, so it is best that someone with the right knowledge works with you to understand the implications of all the options available.
A good business accountant will also be able to assist with negotiating, preparing feasibility studies and prove financial viability of expansion – all due diligence tasks to be undertaken when looking to raise capital for expansion.
Preparing for succession
We have previously talked about succession, and what it means for a business to have a plan in place for the future. There is plenty to think about and organise when it comes to succession, and an advisory accountant is well suited to provide the right knowledge for the step-by-step action points to put it in place.
With plenty of legislative and regulatory changes occurring on an annual basis, it is important that your accountant can provide up-to-date information when these take place, and also provide insight into how it will affect the business and its operations.
Depending on how big the changes are, they might also need to be escalated to the governance board in regards to any impact on strategy – and of course if your advisory accountant is already on the board, then there is a much more seamless transfer of knowledge on the legislation and regulations that are taking affect.