Why the annual accounts should be the starting point, not the finish line

Every spring a business owner sits across from his accountant. The annual accounts are on the table. The result is what it is, the taxes are calculated, and the conversation is about depreciation and advance payments. An hour later he is back outside. The year is closed.

For many firms that is where the work ends. Understandably so: the legal job is done, and done properly. But for the business owner, that is exactly where the question that really occupies him begins: how do I get more out of my business next year?

The client who hopes for a CFO

Every accountant knows them. The owner who has lost his grip on the business. Who has no time for paperwork and delivers the invoices in a box. Who calls his accountant first with every question, because there is nobody else to think it through with.

That owner rarely says it out loud, but he quietly hopes his accountant will become his CFO. Someone who does not only tell him what happened, but also where the money leaks away and what he can do about it.

The accounts are one piece of the puzzle

The questions that keep an owner awake at night are only partly in the accounts. Why does one shop make a profit and the other does not? Does that sick leave cost more than I think? Does the marketing bring anything in? Which products sell, and which gather dust?

The answers are in figures that never reach the accountant: till statistics, sick leave, results per branch, marketing, stock, planning. The accountant sees the total on the profit and loss account. What lies behind it, he does not see. Not because he does his job badly, but because it never gets to him.

I wrote about that earlier in the truth sits between your sources.

The profession is changing

Meanwhile the work of an accounting firm is changing fast. Bank feeds, e-invoicing and AI are taking over the bookkeeping step by step. What used to be hours of work now happens by itself.

That is good news, but it has a downside. A firm that only does the legal side gets compared on price. And on price, someone cheaper always wins.

What remains is what no software can do: guiding the business owner. Showing him where he stands, and helping him decide. And the question owners ask today is always the same: how do I get more return from my business?

What I missed myself

I know how it feels on the other side of the table. For twenty-five years I ran my own business, with five shops. My figures came per quarter, and always too late. What I missed was the full picture: how my shops were really doing, where the margin was, what staff cost per branch.

My accountant knew a lot. He saw that things were going less well. But with what he had, he could not do anything with it. He saw the sum, not the parts. Illustrated grew out of that gap.

From finish line to starting point

What changes when the annual accounts are not the end but the start? Then the spring meeting is no longer a closing, but the beginning of a plan.

An accountant can start on that today, even without outside help:

• Analytical bookkeeping. Booking per branch, per site or per product group shows the margin where it is made. That takes no extra accounts, just a different setup. See analytical dimensions instead of extra ledger accounts.
• Looking more often. A short look every month or quarter says more than a thorough analysis after the year.
• Asking the right question. Not only "how was the year?", but "where is your profit, and where does it leak away?".

Return does not only mean selling more with the same people and the same costs. Sometimes it means closing a branch, dropping a product line or working with fewer people. Those decisions are hard, and that is exactly why an owner needs the figures to take them in time. See also what stopping costs.

Where Illustrated fits

The full picture takes more than the accounts alone. That is where Illustrated comes in. We bring all of a business's data together: accounts, till, webshop, marketing, staff, stock and planning. Every piece of the puzzle goes into one complete picture, visible live.

Illustrated hunts for profit alongside you. Every analysis has one goal: showing where the profit is and where it leaks away, and tackling that. The technology is our concern. The advice stays with the accountant.

It works best in retail with several branches, where the differences between shops are large and rarely visible. Manufacturing businesses can get a lot out of it too, provided the accounts are set up analytically.

How it starts in practice

It starts with the accountant. He sees a client who is stuck, and one sentence is enough: "I know someone who can take a look at that."

Illustrated visits for free, looks at how the business works with its data and puts a concrete plan of approach on the table. Then we build, and the accountant advises with the full picture.

There is no licence and no fixed cost. It is a one-off investment that pays for itself quickly. The accountant invoices his client himself and sets his own margin. The client remains entirely his client.

What the accountant gains is more than extra revenue. A client who discusses his whole business with his accountant stays. And the firm stands out: not the firm that does the bookkeeping, but the partner who guides the whole business.

What you can automate

Almost everything that feeds the full picture. Fetching data from accounts, till, webshop and payroll, bringing it together and recalculating margin per branch or product group all happen automatically every day. Alerts can notify both the owner and the accountant when a branch or a cost gets out of line. What stays human is the conversation about what needs to happen.

The claim

For most firms the annual accounts are the finish line, and the accountant who turns them into a starting point becomes the adviser his client was always looking for.

Are you an accountant and do you recognise clients in this story? On the page for accountants you can read how the collaboration works and register your interest, or mail gregory@illustrated.be. I will get in touch myself and am happy to drop by your office for half an hour.