Consultant practice editor Mark Lee challenges the perceived wisdom that accountants need to be business advisors.
Although many accountants describe themselves as ‘accountants and business advisers’, I have a suspicion that general practice accountants typically fall into one of four camps when it comes to the provision of business advice to clients:
- It’s a no go area: The accountant’s business experience is limited and perhaps they don’t feel that confident with the idea of providing business advice.
- Personal experience: The accountant is willing and able to share their own experiences of business over the years, perhaps drawn in part from working with other clients.
- What others say: The accountant offers advice based on what they have read in books, magazines and websites and possibly what they recall from their studies and from attending seminars and conferences. However, their level of interest in developing this area of skill is much lower than their desire to keep up to date with technical knowledge.
- A systemised approach: The accountant has bought into a programme that assists them in adopting a structured approach to the provision of business advice and either they actively promote the service to their clients or they shy away from doing so and quit the programme.
If I were still in practice I’d like to think that I would probably move up the scale into the fourth category above. Others are happier lower down the scale, and that’s fine as long as their clients are not expecting anything more. Time and again I hear business owners complaining that their accountants fail to provide business and tax advice; they simply do the books, produce tax returns and tell the client how much tax to pay.
Only a relatively small number of accountants seem to be willing to experiment with the systemised approach, so there is plenty of pressure on the others to do this or to beef up their approach and provide business advice, as well as to learn how they can get paid for doing so.
‘It’s not worth investing in’
There are a number of business focused coaches for accountants and also a small number of providers of ‘business and strategy focused’ software and training for accountants in the UK. They are all competing to work with pretty much the same (relatively) few accountants who are interested in developing their skills as strategic business advisers and making more money than is possible as a conventional accountant.
However, the number of firms that have invested in doing this is thought to be less than 2,000 across the UK. That’s significantly less than 10% of those in practice. Indeed, the true number is probably even lower as many of those who join up with one or other of the key players are pretty inactive and just move around each year, looking for the ‘holy grail’.
The majority of accountants may attend taster sessions but don’t seem willing to invest in such services; they don’t see the need. Perhaps they are already making enough money (or do not have the cash to invest), or it could be the upfront time commitment to find out more, to be trained or to research the opportunity - or perhaps there are other reasons.
It seems somewhat counter-intuitive that relatively few accountants are willing to buy into this idea, however attractive it might be in theory. I suspect that this reluctance is partly due to a belief that clients expect business advice for free and that it’s not something that an accountant can charge for separately.
Another possibility is a concern that if one were to charge for business advice, the accountant would need to ensure he/she provides value for money, and perhaps there is a lack of confidence here. Some might ask ‘are my experiences and knowledge really worth anything? It’s all just common sense isn’t it?’ This may be so, but common sense isn’t the same thing as ‘common practice’.
In my experience there is a general feeling among many accountants that they should be providing business advisory skills but they’re notoriously reluctant to pay to develop such skills and to learn how to get paid well for providing related advice.
What’s your approach to providing business advice and getting paid for doing so? Share your views below.
Mark Lee is chairman of the Tax Advice Network and consultant practice editor for AccountingWEB.co.uk.
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I porvide NED-style mentoring support to sole practitioner accountants and am Chair of the Tax Advice Network - a nighly ranked online resource for anyone seeking indepdent tax advisers. As such it is also a long established lead generation facility for tax advisers and tax accountants.
Many of my articles on AccountingWeb date back to my...