Why Smart Business Owners Choose Advisory Accountants
Advances in cloud computing and accounting software let entrepreneurs flawlessly run everything from bookkeeping to payroll. While that might seem like trouble for accountants, it’s actually prompted a great transformation within the accounting industry that benefits both accountants and their clients.
As technology streamlines accounting tasks involving data entry and formatting, modern accountants are embracing a service model known as advisory accounting. This transformation isn’t just for accountants though, and signals a massive shift in the accountant-client relationship.
What Is Advisory Accounting?
Advisory accounting is a service model in which accounting is combined with other services to improve a company’s operations and increase its revenue. The goal of advisory accounting is providing holistic, finance-informed business strategies that create revenue opportunities and power long-term success.
On the surface, advisory accounting may seem like business consulting “in a different outfit,” but that’s not that case. Companies engage a consultant to resolve a specific problem and, once the problem is resolved, the engagement is completed. With an advisory accounting professional, consulting is built into the accounting service engagement.
This results in a powerful combination of high-level business strategies and practical accounting insights. In short, you get strategies that are based on solid data, not guesses or pie-in-the-sky dreams.
How Advisory Accounting Supports Your Company’s Growth.
As an entrepreneur, you’re likely a visionary, spotting opportunities where others see obstacles. An advisory accountant helps you ensure that your dreams make financial sense and advises you on the most profitable path forward. In fact, there are many ways an advisory accountant can add fuel to your business growth.
By taking a holistic approach to accounting, an advisory accountant provides advice on business processes, technological innovation, and even marketing activities. As I noted before, the unique traits of an advisory accountant means that you won’t get dreamy-eyed theories, but instead get a plan of attack that’s financially sound.
An Outsider Sees Blind Spots.
Working within an industry for years can blind a person to more efficient or effective ways of doing business. Hiring an advisory accountant brings a fresh outsider perspective to your company, highlighting blind spots that you may have missed as you’ve busied yourself with managing and marketing your growing business.
For example, most business owners believe that they need to create new services or products to increase their revenue. However, a 2019 survey by McKinsey showed that the companies reporting the highest revenue growth focused on investing in the growth and optimization of their existing business operations. The outside-in perspective of an advisory accountant can help you spot these opportunities and seize them so you’re well-positioned for success.
The Right Tools Get The Job Done Right.
Another area in which advisory accountants are useful to business owners is technology. A 2018 report by PricewaterhouseCoopers showed that 65 percent of business leaders are frustrated by inefficient technology in their workplace.
Accountants with an advisory perspective are skilled at assessing which technologies will enable you and your staff to produce high-quality work. The strong financial focus of an accountant motivates them to help you trim wasted resources from your company and improve your workflows. This is why many advisory accountants offer process advisory and app advisory services: without a solid system or the right tools, your business will flounder instead of thrive.
Success Starts With Succession Planning
I’ve noticed that there are two types of business owners, those who carry their business and those who grow their business. The “Carriers” are the business owners who mainly delegate low-level administrative tasks and shoulder the entire burden of high-level strategy themselves. These are the burned-out owners who struggle to grow and succeed in their business endeavors.
On the other hand, “Growers” realize that lasting success is achieved when you get help from expert advisors and strategists who understand your goals and niche. An advisory accountant is one such person, offering sound financial advice and holistic strategies to help you delegate responsibilities to people who can get the job done. This leaves you free to collaborate with your new, trustworthy business advisor on high-level strategies that push your business forward.
Engagements Are Long-Term.
One of the top complaints I hear from clients is that their previous accountant ghosted them or didn’t get back to them right away. Being an accountant myself, this is somewhat embarrassing since I place a high value on communication and professionalism.
Advisory accountants address this issue by engaging with clients many times throughout the year, not just during tax season. Some advisory accountants will go a step further, using chat tools like Slack and Google Hangouts to ensure a client’s question never goes unanswered.
We’ve implemented systems within our accounting firm that let us get back to clients very quickly. In numerous online reviews and surveys, our clients have praised us for being so accessible and responsive in our communications.
Insights Are Personalized & Proactive.
Another common complaint I hear from clients about their previous accountant is the lack of personal insights. Unfortunately, many within accounting still rely on hindsight data and a “record and report” mentality. This leaves clients without a clear source of advice for improving their accounting setup or tax strategy. It also means that many businesses leave money on the table in the form of missed tax deductions and costly inefficiencies.
Fortunately, advisory accountants offer long-term engagements that prioritize a client’s long-term success. In this model, accountants are directly motivated to ensure their client’s success and increase the client’s lifetime value. As I like to say, “It’s about the value of the work, not the volume of work.”
Advisory accountants like myself are slowly transforming the accounting industry from one of data-crunching to one of decision-making. For business owners, this is a welcome change since it means that they’ll now have a trustworthy business advisor to consult with during high-risk scenarios and decision forecasting.
While I’m wary of buzzwords and hyped-up fads, I believe that the advisory accounting model is here to stay and even evolve, as we accountants continue to help clients navigate obstacles and seize opportunities.