How’s your relationship going?

When your business is a partnership, it’s worth watching out for warning signs of trouble on the horizon. If you can act early, you may pre-empt costly disputes.

Working together in a formal partnership certainly has its advantages. It’s a structure favoured not only by many small and medium-sized enterprises, but also by their accountants and solicitors.

Of course, the nature of the arrangement means that two, three or more people come together to make a collective contribution to the firm. In the eyes of the law, they can be equal players, but the reality may turn out to be slightly different.

People’s personal circumstances are different and so are their levels of effort, ambition and motivation. One partner might put in long hours and go above and beyond the call of duty, for instance. Another might seek more of a work-life balance and reduce their level of commitment, but still expect to be remunerated at the same level.

Very often, there will be irritations and disputes, but understandably – in the interests of a smooth-running business and a quiet life – there’s always a temptation to brush them under the carpet. No one said you had to be friends, but if you’re working towards a common goal, it makes sense to be civil.

As a professional adviser, however, I’d tell my clients to watch out for the early signs of trouble. If you can’t deal openly and honestly with friction and conflict, things will eventually flare up – often over a relatively trivial issue. At that point, everyone suffers, including your staff and your clients.

It may be that you haven’t thought of your accountant as a place to turn with these kind of issues, but it’s much better to get things out in the open now than to find yourself talking to lawyers a couple of years down the line.

If you sense the ship might eventually be heading for the rocks, it might be better to start preparing the life raft. Perhaps you need to start thinking about raising cash for a buy-out, for instance? Much better to do it on an agreed basis than find it enforced in a situation where you have no options.

In a world in which many accountants market themselves as ‘one-stop shops’ for book-keeping, payroll, tax and a range of more functional services, there’s a danger we can lose sight of their more strategic role. Qualified professionals will be able to act as an intelligent sounding board and intermediary, bringing that quality that seems all-too-elusive sometimes in the modern business world: integrity.

So, think ahead and maybe start the process of talking things through. It’s what your adviser is there for.