Ask any entrepreneur or business owner who their top three most trusted sources of information are within their business and nine out of ten will put forward their accountant in that list. In fact, in most cases the accountant rates as the number one resource.
Well, if your business were to be likened to football, strategic accounting would fill the role of a defensive midfielder whose invaluable role goes wholly unnoticed by the casual observer but, upon whom praise is heaped by the winning coach.
The streets to financial viability and success are littered with failed businesses that ignored the importance of strategic accounting, only to find that even an excellent product doesn’t compensate for inadequate focus on the numbers. A key strategy for any small to medium business is to invest in strategic accounting and, hence an accountant that is forward focused.
But, if this is true why are more and more business owners dissatisfied with the level of service they are receiving from their accountant? Why are they not having their expectation’s met?
The accounting industry has evolved significantly over the last decade ago yet, it still has a way to go to service the needs of business owners and entrepreneurs.
In researching this article I spoke to entrepreneur Jessica Schebesta of The Frank Team, who was clear on her needs “I want my accountant to not only show me the numbers but, also provide guidance and advice on what those numbers actually mean for me and how I can use it in my business to increase its growth and value.”
Another business owner, David Cervelli of DC Corporate Solutions, commented that “Forecasting appropriate times for growth and consolidation based on business trajectory are two main areas I would like my accountant to touch on given the importance of the topics within my business.”
Both these seem reasonable requests of an accountant.
Neither of these business owners noted anything about tax time reporting. This is a given.
Despite some accountants being an excellent strategic resource, there remains a massive gap in the market for progressive accountants to take action on the projections and financial strategies of their clients.
With industries becoming more competitive and technology dramatically increasing the speed in which business is conducted, entrepreneurs are turning to their accountants for more than their tax returns.
They no longer want a service consisting of neatly aligning numbers in rows and columns that balance to the cent. Rather, the new age entrepreneur wants to work with their accountant to understand their numbers on a strategic level.
John Winter who is the head of Australia and New Zealand at ACCA – the global body for professional accountants believes: “The removal of data processing and an increase in the automation of accounting and book keeping within business has shifted the direction of the accounting industry. And, this trend will only accelerate as the industry continues to evolve.”
“Business owners are now expecting more from their accountant. They want someone who understands their business, and is able to provide strategic value and work with them as partners. If accounting firms don’t evolve with the industry, they will be left behind and clients will soon visit competitors who offer a more wholistic approach to their accounting needs.”
When you consider the fact that on average a new client would stay with their accountant for at least five years, and the strategic advice could dwarf the fees from mere tax reporting, the opportunity is immense.
Speaking to numerous entrepreneurs about this opportunity I have developed five qualities that the new breed of accountant needs to possess to stay relevant:
1) Connected – I want my accountant to refer me to other trusted advisers and key services I require. Accountants of the future have a network of services in-house, outsourced and trusted providers that they can refer their entrepreneurial clients to;
2) Responsive – When I want answers, I need them now, not tomorrow or, next week. The days of waiting weeks for an appointment in a physical office are slowly becoming extinct. In a world wired, accountants need to communicate with their clients in real time using mediums that didn’t even exist five years ago.
3) Future Focused – Last year was last year. What are we going to do next month or, next year? Accountants need to be the curators of key strategies and programs that help an entrepreneur work on their business, not in it. They need to focus on how to grow their business towards a timely exit.
4) Simplicity – I don’t want to drown in number counting and analysing. I want to know the key figures to track and, the insights to improve them. I need simple cash flow, plus profit and loss statements that can be tracked in real time.
5) Invested – I want a new method of engagement that is less about clock watching and more about partnering for the future. Accountants need to take a customer lifetime value approach and invest in making their clients successful. As they grow, the needs become larger and, so the billings can follow.
With entrepreneurship being the latest craze, there is an unprecedented opportunity for accountants willing to put the old ways behind them. The great news is that this new breed of accountant is developing or has already developed these skills – watch-out world!