What is the trusted business adviser mindset for accounting firms

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mindset

Speaker 1: What is the advisor mindset and what if you seem to be, maybe common deliverables that have come up amongst or other firms the you work with?

Speaker 2: That’s the million-dollar question. I think that the difference between being an advisor to your clients and just being very compliance driven had to do with the way that we serve them and direct them. And I’ll tell you that out business is becoming more and more complex. I just got back from two weeks in Tokyo, Beijing and Shanghai and I was speaking at conferences there and we were talking about how the world is getting smaller, businesses getting more and more complex and more complicated. So if you think about who we’re serving and what we’re doing, we are serving business owners and business leaders and we are helping them solve problems so that they can grow their businesses and they can be more profitable and they can deal with all of the complexities of doing business internationally and they can deal with margin and regulations and all of the things that go with running a business.

So sometimes as financial people or accountants, we put ourselves in a box and we think, “Gosh, my role is simply to complete a tax return or complete an audit.” And that’s what we’ve been taught and what we’ve worked on, and the reality of it is that’s not exactly what business owners need business owners are starving to death for advice around how to run their businesses. And again, you don’t have to know all of the answers, but if you take yourself out of the box and you think about, “For my clients, how can I help them retain and recruit staff? How can I help them project financials and make decisions that will impact they’re bottom line for three to five years. How can I help them come up with ways to be more innovative?” Those are the kind of things that they’re looking for.

Now, does that mean that you as a CPA have to know how to solve all of those problems? Heck no. There’s no way. There’s no way that we can all be experts in every area. But if you shift your mindset and you are able to look at your client holistically and look to them for ways to solve their problems, you are acting as more of an advisor. And in terms of just the kinds of services you might offer, I tell my accounting firm clients to take a look at when you worked with a firm, maybe you worked with a startup company and you worked with them for 10 or 15 years. And you may not call that advisory kinds of services, but you helped them grow their business. You helped them overcome obstacles and challenges. What are the things that you offered? And if you start to look at different kinds of consulting, whether its strategic planning or cost reduction or different things like that, in terms of the way you helped your businesses be successful, that’s the first clue in what kind of advisory services you can offer.

Speaker 1:
Perfect. Yeah, it’s interesting that you go down this pat to dig into their business a lot more, to see it on every angle. And I love the point of, you might already be doing advisory work, you just don’t really realize it just yet. Or it might have been one-off projects that had a lot of value, didn’t realize it was advisory. Steve, you’ve worked with a number of firms internationally as well. When somebody comes to you and they’re trying to understand one, what does becoming and advisor look like or mean, and what are some of the deliverables you see firms introduce? What’s your typically frame of reference or perspective when a firm comes to you with that question?

Speaker 3: I’ll come back to deliverables in a minute. I’ve got some very specific ones what hopefully will translate across the pond. Just to step back slightly, I am a 55-year-old charted accountant here in the UK and I’ve been in the profession for almost 30 years. I’m completely and absolutely passionate about this profession. I sweated blood to joint it. And I sweated blood [inaudible 00:04:23] because I believe that the account profession can make a profound difference to businesses and through businesses, to the world. But what was really interesting to me was that over the many years that I’ve been working with accountants, there’s this huge confidence crisis in the profession, certainly on this side of the pond, i.e. the, “We’re only accountants. How could we be advisors?”, crisis of confidence is what I’m talking about.

So I started just over two years ago an 18 month research project because what I wanted to do was look specifically at the difference that accountants are actually making so that we can try to address this confidence crisis, but also focus in on the services which accountants can readily and easily and quickly and simply deliver that will make the greatest difference. And the end result of that was a book published earlier this year, “The World’s Most Inspiring Accountants.” In fact, it’s a bright yellow book. It’s this one here. And it features 62 case studies of accounting firms from every continent in the world, including lots of firms from the states and Australia and Europe and elsewhere. But what we were specifically looking for were case studies of the different that accountants had made to their clients. And actually, what we found was the different that accountants are making, regardless of which country they’re in is absolutely profound. It’s life-changing profound in terms of the success of the business and the success of the lives of the people running those business and the wider state [inaudible 00:05:51] groups that they touch. So the main reason for doing that research was to provide a body of evidence to fully account impression, to say, “Look. Wait a minute guys. What you are doing is making a profound difference. So stand tall and start going out and doing more of it.” That was the first insight from that.

What we found, and what was extraordinary in the findings was that I’d did not involve putting on Superman’s red underpants and becoming some kind of business advisory management consultant guru. Actually what we found was that the core skills of the account profession throughout the world, our core skills with numbers can in themselves make a profound difference. Now, rather than merely using them to keep the score of decisions that were made two years ago, transactions which happened in a 12-month accounting period, but actually use them for forward focus purposes. And the process that seems where we as accountants can make the greatest difference, and I would call it advisory because if it changes businesses, if it changes results, if it changes lives, if it changes the world, that’s not just compliance is it? It’s actually very simple. It’s us as accountants using our core skill with numbers to restore rationality into the business decision-making process.

Whether they’re small businesses or large businesses, most businesses do not make fully rational, fully informed decisions, and as a consequence they get sub-optimal results. They get sub-optimal profits, sub-optimal cash flow, they work too hard, the businesses are not worth as much as they want them to be, it’s frustrating, customers service isn’t as good as it should be, and so on and so forth. And yet, what we found in the research was that when we as accountants use our skill with numbers to help restore rationality into the decision-making process, and that’s a very simple causal chain there. Number one, we help our clients get better, more robust, more reliable data. Of course, cloud accounting and all that wonderful new technology that’s out there makes getting better data easier than ever before, but easier for us as accountants, as skilled professionals, to sort of mash all that data.

Second element of that is to wrap around better analysis on that better data so that it’s not just numbers but it’s numbers that make sense. It’s numbers that help. And to use that better data and that better analysis to help our clients learn to make better decisions. Because when they make better decisions they’ll create better results, they’ll build better businesses, they’ll enjoy better lives and we’ll collectively experience a better world. And what we found was that alone, that process alone, and there are lots of advisory elements in there, but the joyful thing, the really good news for the profession is all of that is rooted in the skills we already have, the competences we have, the confidence the we should have, and crucially, the credibility that we have in the eyes of our clients.

One of the biggest mistakes I think that accountants make is that they think they have to put on Superman’s red underpants. They think have to be some kind of consulting guru and that’s frightening to them, but it’s also not very credible in the eyes of their clients. And the reality is that we don’t have to do any of that stuff. We need to root out deliverables in our core skills with numbers, restoring rationality and we will make a much greater difference than we then we did to imagine. And then crucially, and I’m sure this links back to what Ron Baker and others would have been talking about,because we can then use our skills with numbers in a way that makes more of a difference for our clients, in other words creates more value for them, adds more value to them, we can then also build according to that value.

Whether you value the price in a strict sense or whether you merely increase your other prices to reflect the fact that you are now more valuable. Either way, we can share in more of that value that we create with our clients. So that for me is the key sort of big picture inside which is, we can do this. This doesn’t require us to completely re-skill ourselves. It requires us to marshal our skills in a more meaningful 21st century way. We can by all means look up what those services are and those deliverables are, but until we understand and buy into that principle, we’re never going to do what it takes to really succeed.

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