The Enchanted Accountant
The below article was prompted from one of our accounting clients who requested advice from us on how she can offer more value to her clients. The below article is a snippet from that conversation.
THE ENCHANTED ACCOUNTANT
“Once upon a time in a land far, far away lived an enchanted accountant who was able to mesmerize his clients with great stories, insights and thoughts about their business. He was so captivating that the accountant’s clients cancelled all appointments to meet with this great advisor and these same clients offered riches and wealth to ensure the accountant saved enough time each week to meet with them.”
For the great majority of accountants the above story is clearly fictional. The non-fiction version of this story suggests that accountants are pushed aside by their clients, continually renegotiating fees not in their favor, and are many times perceived to be quasi regulators, offering limited value. I vaguely remember one of my strategy clients mentioning to me that their accountant is a great historian – can explain everything that has happened over the past twenty years but offers almost no strategic insight, and does not really help me manage the business. Although not shocked to hear this, I understand the reasons why many accountants are perceived to be more tactical and less strategic. With the rush through busy season and the continued push for deadlines, accountants rarely have time to sit back and think for their clients, and offer the value that many clients hope or expect to receive.
So, what can accountants do to offer more strategic and value added insight for their clients? How can accountants take their professional game from the ‘trusted’ advisor to ‘trusted and strategic’ advisor?
Below are a three easy to implement ideas which can direct the accountant in this direction.
Store data appropriately – Most accountants that I work with store client data in a short temporal manner. For example, they keep data in spreadsheets for the two or three years for an audit, review or compiliation and fail to consider the long term trends. I suggest that accountants consider storing data in a long term temporal database or spreadsheet, with like-to-like chart of accounts, so that the accountant can understand long term trends, and to identify problems or weaknesses that may be escaping the executive. This longer term data horizon, will allow the accountant to compare data to similar companies in an industry, or the entire industry. Interesting observations, such as return on equity, return on assets, return on marketing, client concentration ratio, supplier concentration ratio, market based compensation analysis, and many other analyses can be identified and can help the accountant provide great insight to their client.
Obtain access to 3rd party data – There are so many interesting 3rd party databases in the market that the can help the accountant make great comparisons to their client data. Industry data, private company sale data, salary data and similar databases can be used to help make meaningful comparisons for the accountant. It is my opinion that the accountant should provide insight into financial variables that assist in driving value for the firm. Some of these variables include but are not limited to economic returns, cash flow efficiency, risk metrics, and growth.
Make strategic analysis part of your workflow – It is important for the accountant to build into their regular workflow some form of strategic analysis. There will be some upfront work for each client, but once the firm has a unified framework of how you will store the data, adding additional yearly data is not much of a resource constraint at all. I suggest that this work be done during the months when staff is not at full utilization. It is also important to use this enhanced knowledge to meet with clients on a more regular basis, offering ideas on how they may be able to tackle challenges and or further exploit great opportunities.
For the accountants that execute on the three suggestions above, they are taking the proper steps to becoming the enchanted accountant and story teller. The intent of creating a long term view of a client’s performance, and analyzing these results against competitors is step one. A great story teller is one that creates stories that help their clients learn, identify important messages and trends, and establish a strategic connection with their clients. When it is all said and done, the accountant needs to create an emotional response from their stories, showing their client that although they are preparing the taxes, or the financial statements their knowledge and insight go much further. It is my hypothesis that once accountants can initiate an emotional response from their clients, and their clients recognize that they care about the strategic aspects of a business, that accountants will move from the trusted advisor to the trusted and strategic advisor, will be identified as a great story teller and ultimately the “Enchanted Accountant”.
For any additional advice, feel free to reach out to Christopher Young (chris@redmapleeconomics.com)
Christopher Young, PhD. MBA
Red Maple Economics