Is Your Business Hurting because Your Accountant is not doing a Good Job?

It’s about the finer things in life

Recently, I started spending more time pondering about this classic age old saying. What does “finer things” really mean? Is it all about luxury? Is it all about owning that luxury yacht? Is it all about owning that ocean-facing residential penthouse?

As I ponder more, it starts to dawn upon me that finer things do not always have to mean luxury materialistic possession. It can be about all the things we see in our everyday life.

As someone who has been living in Singapore for the past decades, we often take a lot of things for granted. Think about buying a TV. If you walk to a Harvey Norman or Best Denki store, you’ll find all the latest TV models from Samsung, LG, Sony and etc. While you go around and look at the different models, here are some questions you’d probably be asking:

• Should I get a 42" or 55" or 65"
• How does UHD 4K compare against OLED, QLED
• Between black and grey frame, which one looks better in my living room

As I travel out of Singapore to nearby places like Batam and JB, I started realising that outside Singapore, a lot of people care less about these questions. To them, a 32" TV is good enough, as long as it allows them to watch their favourite TV shows.

Does this fit into the definition of “finer things in life”? I’d say yes and that’s what puts Singapore ahead of many countries when it comes to quality of life.

Another example is one of my favourite indulgence — durian. Durian fans remember those days when Monthong durian used to rule like king. As we get more acquainted with it, our ability to differentiate evolves. I remember those days when D24 Sultan durian variety was first introduced. And then we are introduced to the Musang king and these days, the Black gold.

Think about it. In many places, paying $100 for durian is unthinkable! To some people, every durian is just another durian. But to those who are able to tell the fine difference, they would never go back to D24 once they have tasted Musang king!

Whiskey is another example. You typically starts with simple whiskey that costs couple of hundred dollars per bottle. Then as you read more about whiskey and the stories behind it, your world of whiskey becomes more than just buying any bottle of whiskey. You know more about the history of whisky (do you know that Whiskey comes from Scottish word that means water of life?) and you know more about how different ingredients and casks would produce whiskey of different taste. Yet, such fine differences only matters to you if you are into whiskey.

Do you know that the most expensive whiskey ever was sold in auction for $1.9M?

Soy sauce is another example. I’m sure most of us would have a bottle of soy sauce in the kitchen. How many soy sauce grades are you aware of? Even for soy sauce, price range for premium grade can be 15–20x more than a typical household brand. Do you know that there are Japanese soy sauce that are brewed in aged whiskey barrel?

What do TV, Durians, Whiskey and Soy Sauce have in common with good accounting?

In short, finer things in life do not have to be multi-million dollars luxury possession. It can be anything that matters to us and make our life better.

When looking for accounting service provider, many small business owners start by looking for the cheapest option. Price is the only parameter that goes into the decision making, every other thing is irrelevant or good to have but not important.

If price is the only determinant and cheapest equates best, you’d end up with accounting firms that cater to the masses. These are firms that treat accounting as commodity and they operate on cut-throat margin. Prices can be rock-bottom but from my experience observing the trend in various industries, race to the bottom will end up with no winner.

When business owners choose to go for the cheapest accounting service, they often find themselves dissatisfied or their business needs have outgrown the quality of work that can be delivered.

Errors start to pile up. The effects of each mistake starts to compound and hurt the accuracy of monthly reports. Important financial health indicators start to get buried or becomes faded.

From our years of working with entrepreneurs, we learnt that one of the most common reason killing a business is when owners operate based on misguided indicators. In many occasions, I heard passionate entrepreneurs sharing how they think they have been bringing in more business but they don’t see it translated to more money in the bank.

A lot of things can go wrong. Wrong tax filing. Wrong money flow. Wrong revenue recognition.

Just like the finer things in life, a good accounting service brings significant benefits that you don’t get from firms offering accounting service as commodity.

How we choose to do it differently

As boutique accounting house, we choose to do it differently. We do not operate on scale but premium customer base. We’ll listen to how you want to run your business and apply industry best practices to come up with accounting and business process flow that brings you closer to how you envision the running of your company.

Some people sees accounting as boring jobs that’s always just about crunching numbers and make sure that the $0.01 shortage is accounted for. A lot of accountants fail to see the bigger picture.

Monthly financial reports shouldn’t be just about making sure everything is balanced out. I’ve seen lots of accountants just focusing on closing the reports without thinking how a business owner would interpret the reports. A balanced book does not necessarily tell you the financial health of your business. A balanced book does not necessarily highlight red flags that indicates bigger problem looming.

Too often, business owners are not getting good view of the financial health of the business until it is too late. I’ve dealt with many budding entrepreneurs who assumed that their business is running well until it is time to show profit or when cash flow is drying up.

Every year in Singapore, there are stories of lifestyle businesses — from Yoga studios to Nail shops, who are forced to shut down. It is not rare that the reason for shutting down is not because they have no business but rather, it was down to lack of financial discipline and improper revenue accruals.

It’s a pity that I’ve seen too many businesses fold not because their product/service is not great but just because they’ve not been discipline in their financial operation. On the contrary, I’ve seen many products/services having mediocre quality but is able to sustain because of goof financial discipline.

Knowing the exact state of your financial health is critical for couple of reasons. It lets you know when and how much to spend money. You do not overspend just because you “think” you have more than what you actually have in the bank. It lets you know when and how much you should be more aggressive in acquiring customers. You do not assume you have more customers that what you really have.

Building a successful business is more than just realizing a brilliant idea and offering higher quality products. A successful business runs like a well-oiled engine. All parts need to work well to make it run smoothly. Accounting, in many businesses, is too often, being overlooked until it is too late.

As boutique accounting firm, it is in our DNA to partner with small medium business owners make it a long-term successful business. As partner, we do not simply crunch number and turn it into reports. Instead, we make sure the numbers are not only balanced but turn into actionable insights and guides that tells business owners if they are moving on sound or fragile financial runway.

Is Boutique Accounting worth the Premium?

This is a question we get asked all the time.

My reply is always to take a step back. Think about this. As business owner, what budget are you allocating for managing your accounts and finances? How many people do you think will be required to do the job well?

If your answer is an accounting division with 1 or 2 persons, then let me share my experience and observation across the industry.

Just like any other department, maintaining a small department of 1 or 2 persons is not an easy task. This may sound counter-intuitive to most people. We tend to think managing a small team is easier than managing a big team. It is true in certain sense but not entirely.

When you have a small team, the challenges you have to address include but not limited to:

• What is the career progression?
• Who and how will the performance review cycle be conducted?
• How do you blend the team into overall organization structure?
• How do you manage retention among millennial workforce?

As a boutique firm, our value proposition is to deliver the quality of work that matches what a small accounting division typically deliver, albeit minus the pain of managing and slightly lower cost.

The question is how do we do it. When it comes to managing accountants, we have years of experience. We understand what it takes to motivate an army of accountants. With accounting as our bread and butter, there is plenty of horizontal growth opportunity to work on different things. By simple economies of scale, we are able to offer the equivalent output at lower cost.

So, whether or not a boutique accounting firm is the best option for small medium business owners like yourself, you’re the best person to answer the question. Does all the intricacies and finer things matter to you?