Entrepreneurs Are from Mars, Accountants Are from Venus

Ask a business owner how they feel about their accountant, and you’ll often hear the same things:

• “I’m frustrated because they fail to understand that my business is a living and breathing organism, and not just a set of numbers. I wish they would take some time to understand my business.”
• “They don’t generate financial statements in a way that is easy for me to understand.”
• “They can’t tell me how my business is doing and what I can be doing to improve.”
• “They don’t help me manage my cash flow.”

Ask accountants what they think about working in companies and you often hear the same things:

• “Marketing and sales get all the resources and all the glory. We’re constantly understaffed.”
• “People don’t appreciate the amount of work we do to keep the company in good standing with CRA and we never get the information we need.”
• “Management is clueless about accounting and doesn’t understand the numbers we put together.”
• “The business takes unnecessary financial risks that don’t make any sense.”

What is really going on here? Are accountants and entrepreneurs from two different planets? Well not necessarily, but it is easy to argue they have strikingly different personalities and points of view. However, it is clear that many organizations have a high level of disfunction and mistrust between accounting and the other departments. Business owners often view the accounting department as a “must have” cost center for compliance that does not add significant value to the business. Let’s take some time to unravel this mystery.

If you walk into any business, you will often find that the accounting department is the quietest department in the office. They do not socialize with other groups, they keep their heads down and focus on completing financials to meet deadlines. Most accountants are introverts and spent the majority of their academic career working independently with a curriculum that is virtually 100% technical. On the flip side, entrepreneurs are often extroverts due to the necessity of doing business development. They likely studied business which required group work and case studies. This creates a stark personality difference between accountants and entrepreneurs.

In order to understand some of the comments made by entrepreneurs and why accountants behave the way they do, we need to understand the nuances of most accounting courses:

1. They often provide assumptions with black and white answers, while the real world is grey where assumptions require critical thinking and there is often more than one right answer.
2. Most exams are calculation focused, rather than essay based requiring interpretation, analysis and conclusions.
3. They focus more on the risk side of equation vs. reward, so they underappreciate the level of risk entrepreneurs are required to take in order to acquire market share.
4. Budgeting and forecasting are often a very small component of the curriculum and most assumptions are provided. Entrepreneurs are often shocked at the inability of their accountants to help them plan ahead.

So we can’t be surprised by the observations made by entrepreneurs when accountants come out of school or even have only a few years of experience. The education they have received is linear and they believe their jobs begin and end with the completion of financial statements and tax filings. It is really important to understand the shortfalls in their education in order to set realistic expectations on their capabilities.

If you are looking for an accountant who has the potential to grow into a Controller or CFO role in your business, identifying fit in the interview process is vitally important. This requires a massive paradigm shift in the way they think and ability to adapt. It is quite common to think that the solution to development is to send them to more advanced accounting courses where they are surrounded by other accountants and continue to engage in “accounting speak”. However, their accounting knowledge is not what is holding them back from progressing. It is the soft skills dealing with non-accountants and this is not taught in school.

To achieve success in your business, the accounting department needs to become a value add service that not only achieves compliance but provides information for the business to make important decisions. They need to be included when you make major decisions to expand revenue, take on capital expenditures or assess projects. The path to collaboration requires patience, the right education forcing accountants out of their comfort zone, and hiring the right people who show the potential to adapt.