"I'm a creative person. I don't do numbers. I can't do finance. I don't get it. I don't understand it. It's not for me." Sound familiar? Accounting doesn't always come naturally to the creative, and that is okay! For once, we're not going to advise you to bury yourself in educational resources on accounting for creatives—we're going to suggest you get an accountant!
Erin Walls is a chartered accountant and the founder of WardWilliams Creative—an accountancy firm exclusively for creatives. In her work, Erin has noticed a common thread of questions and reservations among her clients and so she's here to clear up the misconceptions. In short: don't be put off by accountants, because they can be helpful.
Read on for Erin Walls' advice on how a healthy relationship with your accountant can transform your small business, and how you can achieve it.
Meet Erin Walls
What do you do?
When you have a company or you're a sole trader, there are legal obligations to file certain reports and tax returns—I help people to make sure they meet those obligations. However, I am also here to help creative business owners to save tax, negotiate any tricky transactions and, ultimately, grow their businesses.
How did you end up in your role now?
Lots of work! After my 3-year degree, I completed another 3 years of education to obtain the professional qualification. After that, it’s all about experience. The longer you work the more experienced you become, so your advice becomes better and better. I trained in a bigger company, but soon realised I prefer working with smaller businesses where you can make a bigger impact on someone’s life.
Step 1 when taking on a new client is...
Getting to know them and the business. Every business is slightly different and the advice and support we give depends on what stage you and your business are at, how much experience or knowledge of finance you have, what you are trying to achieve and so on. For the first few months, we learn as much as we can about our new clients so that we can best serve their needs.
Why do you work with creatives?
All my friends and family work in the creative industries; when I qualified as an accountant they all came to me to ask for help. Many were already paying for their own accountant but didn’t understand what they were being told or felt intimidated, and often even patronised. I spotted a gap. A lot of creatives are left-brain thinkers and they need a different approach to make the financial side of the business click for them. So that’s what WWCreative does, it works with creatives on a level which is helpful and supportive.
Erin Walls' 5 rules for a healthy relationship with your accountant
1. Do your homework
Keep the receipts
Not so long ago, you used to have to keep paper copies of business records but these days, photographs will suffice. As soon as you receive a receipt—an invoice from Amazon, a restaurant bill etc.—take a photograph and save it to a drive or an app (Dexter or Expensify are good options). It is that easy.
Stay on top of things
You can't stop marketing just because you're having a busy spell, and you can't stop keeping financial records either. Dedicate time every week to review your invoices, receipts etc. and organise them in a logical way to pass on to your accountant. Tackling a backlog of paperwork is a scary and time-consuming task, approaching it in manageable blocks is easy. A positive side effect of this system is that you'll also have a better idea of the money coming in and out of your business and so can make more informed, reactive decisions.
Be smart with your expenses
The common sense approach to expenses: if you spent the money because you needed to for your business, then it will be allowable. The areas where people tend to come unstuck are entertainment and travel—to be on the safe side, consult your accountant!
2. Meet up often
The frequency with which you need to see your accountant depends on how comfortable you are with the figures and what is going on in your business. At WardWIlliams Creative, we have some clients who are in a growth phase: they need to register for VAT, they're beginning to make overseas sales etc. Naturally, they have a lot of questions and need a lot of support and so we are in regular contact. Then we have other clients who are just ticking over. They have been doing the same thing for a while with the same clients and feel fairly confident in that. These kinds of clients speak to us once or twice a year and then at the end of each year, we have a meeting to go over their figures and plan for the year ahead. It comes down to how much support you want or need at any given time.
If you're ever feeling unsure, you should be able to easily speak to your accountant for advice. Equally, if things are working well for you you don't need the burden of overly-frequent communication. These days most accountants don't charge per hour, they charge an annual fee—so don't hesitate to reach out when you need advice. It is better to check in regularly than be in a mess at the end of the year because you were worried about additional fees!
3. Don't be afraid to ask for help
Don't be scared of accountants! I regularly find myself asking clients: why didn't you speak to someone before? And the answer is that they assumed an accountant was going to be too expensive, or they thought we might patronise them, or they didn't want to feel like they'd done something wrong. In the long run, this attitude is bad for business. The lesson here is: Don't suffer in silence. Don't be afraid to accept help or ask for it. If your budget is tight, sometimes the bank has mentorship schemes and a lot of accountants will give you a free initial consultation.
4. Find the right match
Obviously, from a business perspective cost is always going to be a factor in your decision. Which is why, before hiring an accountant, you need to be honest with yourself about how much support you need. If you opt for a really cheap service, you'll likely receive less attention and support. That will work for you if you're a business owner who does not need that support, you simply need to tick the boxes for filing. But if you know you require more support, you probably need to pay for a slightly more involved accountant.
But the biggest thing for me is the relationship. You need to feel that your accountant understands your business. Most accounts will give you the same work because we all use the same rule book. It's more about the journey. It is about finding a relationship with someone that you feel comfortable with, and you think will support you.
5. Set your value
Accountants can help you manage your money, but they can't help you make it. Creative industries are very hard to work in because making money is very hard. In an attempt to differentiate themselves from the competition, many creatives lower their prices, but this has negative consequences on how people value the work of creatives. The fix: everybody in the creative sector needs to hold to their value. Over time it will get better, and people will get used to paying what they should rather than knock down prices. Rather than focusing on undercutting your competition, focus on what you need to earn. Remember: the price you set, sets your value.
Book a consultation with Erin Walls, founder and director of WardWilliams Creative.
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