The Challenges Facing Accountants
Many of the commentaries about how accountancy firms should face the exponential changes in business and technologies usually feature all or a mix of three main pillars of advice. The first is that compliance is no longer viable, the second is to focus on a niche area, and the third and possibly the most suggested is to move into "advisory" or "value-added" services. The first two of those are subjective and depend on the individual skills, and objectives of each firm, who are all unique. In this post we focus on what "advisory" services are. Many of the services offered by accountants follow the Ronseal mantra in that they ‘do exactly what they say on the tin’. If a firm says that they offer payroll, statutory accounts/audit, tax or bookkeeping then it is easy to understand what is on offer. You then see "business advisory", and things start to get a bit woolly – what does it mean? The primary challenge is that the term can be interpreted very differently by firms of accountants and businesses alike, and so it’s no wonder that there is confusion. As discussed above small businesses generally understand traditional accounting services. What they often need guidance on is the services they need to help run and manage their businesses more effectively? Successful businesses often benefit from pro-active analysis and insight to provide financial intelligence and guidance to the business owner. This insight helps them to understand the business performance better so that they can make decisions to influence their future direction positively. What does moving into "advisory" really mean for accountants?
This insight requires more than reviewing an end of year P&L and balance sheet. Sure, this tells you what an accounting standard compliant profit figure is, but does it explain that profit, or more importantly where there are other opportunities to make a profit? With the increasingly rapid adoption of cloud accounting by accountants and their clients the amount of data available has increased even more exponentially. The availability of this data represents an opportunity for small businesses, but only if it's interpreted and acted upon correctly. How often have you heard business owners say ‘if only I’d known this 9 months ago, I could have done something about it’. Timely analysis and insight may allow such business owners to make better-informed decisions, which can only lead to improved future performance. Quite often a small business probably doesn’t need and can’t justify the expense of someone doing analysis full time. Maybe though 1-2 days per month, can be a cost-effective way to get strategic financial guidance to help the business move forward in a financially astute direction. In conclusion, let us create ‘financial intelligence and insight’ as a service offering and get rid of the murky ‘business advisory’ tag. This is exactly what Foxtrot Twenty are set up to do. We focus on providing pro-active analysis and insight, to help businesses maximise profits and unlock their true potential. Built on over 15 years working in both a FTSE 100 company and managing the finances of a £15m turnover owner managed business, the experience and knowledge gained means we are well placed to tailor our approach to individual business’s needs. Our success is born out of your progress, we want to be part of your business and help you plot a course to profitable growth.