Why benchmarking is good for your clients – and your bottom line
How to become your client’s most trusted advisor
The most effective measure of success
We’re all guilty of making comparisons – with other people, colleagues, neighbours, and even other businesses. It’s a human trait that, whether consciously or subconsciously, we do all the time.
Maybe it’s a jealousy thing. Or a chance to prove that we’re better than others. On a superficial level we love to compare houses, cars, and even salaries with friends.
The more you think about it, the more it’s apparent that we love a comparative list. The Oscars. The Grammys. The World Cup. The Olympics. What are they all if not one thing being benchmarked against another to determine winners and losers?
Benchmarking takes on even more importance in business, as Jorn Lyseggen notes in his book Outside Insight: “Benchmarking is the most honest measure of success,” he writes. “It doesn’t matter how well your company is doing in isolation. It is more important to understand how you are doing compared with your competitors.”
The real trick, though, is determining why one thing is superior to another. If you could tell an athlete exactly why she can’t run as fast as another, and give her instructions on how to surpass the competition, how amazing would that be?
Or if you could analyse a movie and tell the director exactly why his film was inferior to another – and do so using scientific data – how valuable would that be?
Yet this is exactly what accountants can do for their clients – if they have the right data, tools and technology at their disposal.
A new advisory opportunity for accountants
Using the Silverfin accounting platform, accountants can consolidate historical and real-time financial data from each and every client, no matter what bookkeeping solutions they use. Armed with this data they can then benchmark performance in a variety of different ways.
At an individual client level, they can compare specific financial periods, whether months, quarters, or years, and conduct like-for-like data analysis. They can drill into every transaction and track profit margins and outgoings over time.
This puts accountants in a great position of power. With such an in-depth knowledge and understanding of their clients, they can spot risks and identify opportunities specific to a company. They can advise if performance has changed, costs have increased, or payments are consistently late. They can also proactively notify clients of abnormal activity or unexpected changes to finances.
Deliver advisory services at scale
Benchmarking also delivers insights at a portfolio level. Accountants can use Silverfin to identify specific clients that might be impacted by a certain event so that they can provide targeted advice that can deliver real business value.
For example, accountants can identify, and then track, clients under pressure from COVID-19, then offer targeted advice. Not only can they quickly identify COVID-19 measures and apply them to a specific client file, but they can also complete critical cash flow forecasting and scenario planning. This enables the accountant to identify clients at risk and work with them to look at how different measures will impact their performance over time.
This is just the start. As new measures, taxes or regulations in a specific country or region are about to come into force, an accountant could quickly recognise potential risk to a client and warn them, offering advice on what course of action to take.
It’s time to open the door to a world of new opportunities
Because accountants hold such incredible detail about their clients, they can also discover commonalities across the client portfolio.
Using Silverfin, they can view all client data in a clear graphic-rich format, enabling them to compare clients in a specific industry or area. They can get to the bottom of why one is doing well, and another isn’t, and provide a plan of action to improve business performance. They can benchmark pricing plans, monthly expenses, wage bills, and other financial factors.
Having this information at their fingertips also enables partners to identify precise opportunities for advisory services. This is good for client relationships and good for the firm’s own financial performance – opening up whole new revenue streams.
Ultimately, benchmarking is about much more than grading clients. It’s also an opportunity to sell in high-value advisory services and, as a result, deliver real business advice that will make a huge difference to not only your clients’ bottom line but yours too.
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