The word ‘accountant’ might conjure up a vision of someone poring over sheets of accounts with a fine-tooth comb in hand. While things have moved on for accountants, the truth is, that is only part of the accounting process.
Financial spreadsheets, tax returns and general accounting services all come under the heading of compliance accounting, which is indeed all about the numbers.
However, another type of accounting that has gained popularity and significance in the last few years is strategic accounting. By virtue of the access to a company’s financial data, accountants like yourself are among their most trusted advisors.
And now, thanks to advancements in technology that enable better analytics, your accountancy practice can use the data to provide predictive insights on how a client business of yours can grow and pivot for success.
What is advisory accounting?
People actually use the term ‘advisory services’ quite often, but they do not always understand its implications.
Essentially, advisory accounting is about providing accounting services along with other value-add services like consulting, strategy, automation and tech-related advice, and so on.
This helps an accountancy firm’s client to make more intelligent and more profitable decisions than if the firm were to provide simple compliance accounting services. Today, most accountants engage in some level of advisory accounting to serve their clients better.
The role advisory services play in the accountancy industry
Conduct your research, and you will realise that a little more than half of small business owners feel completely satisfied with their accountant’s services, while more than half of them felt that their accountants are not proactive enough.
At the same time, however, most business owners regard their accountant as a trusted advisor. Clearly, there is demand for accountants to extend their services beyond the traditional scope and move to an advisory mode.
If you are not offering advisory support to your clients, you are stalling your practice’s growth. Let us take a closer look at what this means:
1. Ongoing client-accountant relationship
A lot of businesses feel like their accountants do not truly understand how their business works. However, advisory accounting becomes a year-round relationship rather than just reaching out when taxes need to be done.
You do not just interact with them during the tax season! In fact, the more conversations you have with the business, the greater the mutual understanding will be, which will lead to more fruitful communications and a willingness on the business’s part to seek the accountant out more often.
2. Accounting assistance beyond the black and white (and red)
If businesses run into the occasional snag with their finances beyond the periodic financial statement, accountants can help them out. Matters such as how to classify expenses or what tax benefits a business is eligible for can be effectively resolved by an accountant who offers advisory services. Are you ready to offer a lending hand?
3. A “big picture” approach to accounting and business
Typically, businesses would approach accountants to ask about a single aspect of their finances and how it could impact them and leave the more important strategic questions to management consultants.
However, as accountants take on more of an advisory role and rely on automated software to handle the day-to-day financial work, they might just become the new go-to.
The visibility that they have into a business’s finances, in fact, positions them ideally to take on a strategic role. For instance, by analysing the patterns of cost and cash flow, you can identify ways to reduce waste and optimise resource usage for your clients.
4. Accounting for all scenarios to make success a certainty
Merely focusing on compliance accounting is not enough for crucial business decisions, such as mergers or acquisitions.
Accountants, with their keen insight into cash flows and performance insights, can do the scenario-planning and provide the long-term insights needed to verify that the strategic move is, in fact, a good idea.
By going beyond the regular compliance audits, you can become critical partners in business strategy and steer their clients to success.
5. Curiosity and innovation are a must for accounting advisors
You tend to know a great deal about your clients’ field of specialisation, but what about their clients? To be successful at advisory accounting, you must keep an open mind about what is going on in their client’s industries and constantly update yourself about the latest innovations, technologies, legal mandates and so on.
In addition, you must know about what is happening in any allied industries that could affect the client’s business. This is a full-time commitment and may be hard to replicate across too many sectors.
There is thus a case for advisory accountants to specialise in a single industry and provide in-depth tailored services there. What is your speciality?
6. Technology is a reality and should be embraced by advisory accountants
Today, technology is in a constant state of flux. New innovations are coming out with increasing regularity and supplanting the old ways of working.
Therefore, accountants should stay abreast of emerging technologies and acquire expertise in the ones most relevant for their business to deliver truly exceptional service.
For instance, blockchain has gained increasing importance to share information securely, and many clients are likely to have questions about how it can help them.
In addition, advisory accountants should become conversant with the latest accounting platforms and analytics tools to deliver the most efficient service.
Stellaripe accountants at your service
If you have trouble offering advisory support to your clients, you have us. We will help you create a plan of action and identify specialisms to provide strategic assistance and see your clients grow. To discuss more, do not hesitate to get in touch with us here.