In last month’s installment, we ended with this question: “Why hasn’t my accountant offered to help me help my business?”
We hear this all the time in the accounting space. We want to deliver more value to our clients as a “trusted advisor.” Well, to be considered a trusted advisor, one must actually do some “trusted advising.” It’s not that SMBs don’t want it, they do. They just don’t know to ask their accountant for it because accountants don’t market consulting services.
Businesses will immediately pick up the phone and call their accountant with a bookkeeping question or a request on how to enter a transaction in the accounting solution. It’s a natural connection point. But, they don’t think to call to discuss how to build KPIs to monitor the most salient data points of their business.
Generally, accountants will provide clients with standard reports such as P&L, Balance Sheet and Statement of Cashflow with a cover letter that simply says here is your P&L, Balance Sheet and Statement of Cashflow.
How much more valuable would it be to give that same client a report that shows multiple periods across two years with variance and several lines of KPI analysis with trends or ratios? Or, a report that sorts the top seven accounts in the By-Month-YTD-P&L in descending order of amount in each of the types (Income, COGS, Expenses, Net, etc.) with vertical analysis so they can see the biggest factors by type trended and normalized?
There is a lot of data in a 12-month set of financials. Too much to easily digest and do something with.
What businesses want is data they can:
- Easily get
- Easily understand
- Easily digest
- Make decisions with
Plus, they want a trusted financial advisor to collaborate with them on what that should be. Why shouldn’t they think this way? You already have the “trusted” part of the “trusted advisor” piece accomplished.
I can’t tell you how many times in my consulting practice I heard: “I don’t know what to look at or how to create a way to look at it.” It was even more likely that they didn’t even know to ask the question. In smaller companies with owner/operators, they are usually working in the business not on the business and they running “heads down.”
Having a best practice suite of reports that can be automatically generated (including KPIs) is the language you can use to engage your clients. So, do this in Excel. Compile a list of all clients in Column A. In column B put an X next to the name of all clients that have asked for help with business decisions, reporting or consulting and then do the math on the % not served.
You probably have a pretty big opportunity to provide a lot more valuable services across the majority of your clients. Increased value equals increased client retention as well as increased revenue.
But where to begin? Well, we need to think about what we can create and automate for our clients first. You have to have a language before you can communicate. And, as an advisor, what services do you want to provide and in what frequency?
Do you want just to dump great reports to the client and be the KPI solution provider or do you want to collaborate and dialog with them on a regular basis? By the way, collaborating on an annual basis won’t cut it. Monthly or quarterly is the way to go. I subscribe to this theory: You can’t change what has already happened so you better be looking while there is time to adapt. What client doesn’t want that?
In next month’s column, I’ll be touching on one of the main cornerstones of having an advisory service. Stay tuned.