The age of the super accountant

2) Balance sheet gearing has become more and more important for investors to get their returns.
In part this has been caused by the current high level of money available in private equity and their willingness to gear up their businesses as high as six or seven times a company’s EBITDA.
But it has set a trend that is affecting us all; for example, if you want to make an acquisition of a competitor your most likely rival bidder will be a private equity player using, yes you got it, tons of debt.

3) Regulations and yet more regulations
The fact that the US has now outlawed internet gaming may flavour my views here (I’m the chairman of PartyGaming) but there is more and more regulation being heaped upon us each year. In a small business this is often the area that is dealt with by your accountant. Get it wrong and the penalties can be ferocious – damage limitation is therefore vital. All in all it’s becoming a much different world again – perhaps the age of the super-accountant really is upon us!

4) Managing the existing business better
Yes, accountants can also help build businesses, not just cut costs. In a competitive environment really knowing your business inside out becomes increasingly important. So, product line profitability helps you choose where to put your marketing spend, sales effort or capital expenditure.
Pricing, the endless but probably the most important determinant of gross margin, needs constantly to be reviewed in conjunction with marketing. Good commercial accountants can often drive the debate on issues such as outsourcing, be it in the UK or overseas. To stay competitive may mean that you just have to manufacture in the Far East or India – the numbers will often speak for themselves.

5) Mergers or acquisitions
In slow growth or mature markets, consolidations become viable and important. To succeed in this area, you need to have a really good numbers man, or woman, by your side. This is often the vital ingredient in what is still rightly perceived as a risky process.
His or her responsibility will include not just due diligence but also analysing and verifying the true merger synergies and costs to achieve these.
The right financing structure will be key – too much debt and a small donation could really harm you – too much equity and you may just wonder why you did the deal at all!