Are you ‘just’ an accountant, or are you a business adviser as well asks Mark Lee.
Many accountancy practices claim to be “accountants and business advisers”. Is this borne out by the way they operate? And do they take their own advice?
I suppose the answer to the first question depends on whether you approach ‘business advice’ as:
- something you provide automatically; or
- an extra service that business clients only get if they ask for it and pay for it over and above the fee for recurring accounting and tax work.
The Insolvency Practitioner’s view
I have also been made aware of a surprising statistic. Apparently a senior Insolvency Practitioner attributes 80% of corporate insolvencies are caused by poor financial management.
What does that say about the advice being provided by accountants? Are they just missing out on opportunities or are they failing their clients?
What do business clients want and need?
Let me offer a theory I have developed by reference to my conversations with many business owners and accountants over the years. It’s not a universal truth, but it may explain the 80% figure above.
Most business owners go to an accountant because they want to pay less tax, not because they want a set of accounts. To the extent that the business owner wants the accountant to do accountancy work it’s largely because they need their accounts for the bank, for their funders and for the taxman. And many accountants are happy to focus on providing these backwards-looking tax and accounting services.
The challenge is for the accountant to help their business clients appreciate the need for effective financial management before it’s too late.
Let me pose a series of questions for accountants who claim to also be business advisers:
- Do you promote your ability to provide business advice distinct from your accountancy services or as part of them?
- Do you take the initiative or wait for clients to specifically ask you for your business advice? Will you provide these services within your standard annual fee?
- What will clients be prepared to pay extra for?
- Can you get in first and make clear that additional services are available for an additional fee?
- Can you highlight the benefits of engaging you to provide those additional services - and sooner rather than later?
- Do you walk the talk? Have you considered the application of your own advice to your own business?
- How accurate is your firm’s claim to be “accountants and business advisers”? Are you really a business adviser or just an accountant who records, reports and focuses on what’s already happened?