Holden Associates – Accountants & Business Advisers Blog

This is not as daft a question as many an accountant may think.

It is quite obvious that the only people who really understand the accounts, are in fact the accountants, and in many cases their clients are left with an odd sinking feeling, the kind you used to get when it was biology at school.

This is nothing new, it’s not uncommon that clients we gain from rival firms have no idea about the accounts, how they are made up or what’s in them, let alone having had anything explained to them in a way they understand.

Sounds terrible doesn’t it, but it isn’t a one off, in fact I am now convinced if a new client said he/she fully understood the figures I’d be very worried.

So should you understand your accounts, yes you should! I wouldn’t expect you to be able to complete a set yourself, but I would hope you understood what is going on and why.

At the very least you should know the importance of maintaining your records on a regular basis and the benefits this can bring to you and your business.

Up-to-date accounts allow us (the accountants) to provide a regular review of how things are going, unless you like the surprise of finding out 7 months after the year end how good or bad it all was, oh and ‘here’s your tax bill and mine!’. It also allows us to view tax saving opportunities in plenty of time to implement them, it also lets us keep an eye on the longer term objectives you may have set out for you and your business.

So, although I don’t expect you to be able to put a set of accounts together, I do expect you to have at least a basic understanding of your figures, and if you don’t, then personally I would feel as though I have let you down!

Next time you see your accountant, and you don’t understand the accounts, take the time and ask him/her to explain them. After all, if you don’t understand your accounts, the chances are that this means you don’t really understand what your accountant can or should do for your business, which in turn begs the question, does he/she understand your business?