I should say, before I wander on to anything else, that I am not a robot.
I’ve seen a lot of predictions over the past couple of years that accountants will be replaced by robots. From my point of view that feels like the forecasts of a paperless office were 20 years ago – everyone was going to have one, we’d all develop new ways of working and tress would be safe to grow in peace again. See how that worked out?
I must agree that there is lots of scope for automation in the basic processing of information, and software such as Xero is taking full advantage of machine learning and automated scanning to take away the drudge work of entering accounting transactions. Someone still has to check that the machine has got it right, and that’s where professional skill and judgement comes in.
The problem is that with a support function such as finance no-one notices if you get it right, everyone thinks they know how to do it but if it’s done wrong it’s your fault as the finance professional.
I can’t do much about the second and third points other than a steady drip of education and training for my clients, working with them as a team and making sure they own the figures. As for the first point, it’s my invisibility cloak but one I wear with pride. I should be helping my clients to achieve success by supporting and nurturing their finance skills so that they can concentrate of the technology and commercial development of their business – their investors will realise value from those skills first and foremaost.
That support and nurturing starts form the first engagement with what may be very young companies and inexperienced management teams – getting it right from the beginning. This may be as simple as:
- Setting up financial systems which ensure regular, clear, reliable financial reporting
- Developing financial forecasts which bring clarity to future plans
- Ensuring documents are kept and filed so they are accessible for reference years down the line
- Putting in place regular board meetings with concise, accurate minutes which concentrate on decisions, agreements and action points for the future
These are the foundations for the future. Several of my clients have gone on to successful exits, and by adopting these basic housekeeping rules from the get-go the financial diligence part of their exit negotiations was a non-event. Like house foundations the financial and admin housekeeping is rarely checked until the house is being sold, and if it’s are weak it can significantly devalue the rest of the structure. It’s also hard to fix them if it’s not right – you have better things to do with your time during an exit than going back through years of emails looking for a missing option agreement or property lease. If the foundations are firm and solid – the house keeping has been done, everything is there and easy to find with no surprises – the box is ticked and you can move on to wondering what colour you’d paint the rooms once you own it.
If you are interested in having those firm foundations get in touch and let’s talk about how I can help. I might even take off the invisibility cloak for a while.