PART V: Best Practices for Accountants and their Business Clients

This month, I’m going to go back over the main points from the first four installments in this series. In those articles, I wrote about what you need to do to get started as a trusted business advisor and how to continue to grow that side of your business.

Next month, I’ll be writing about what to do next. That is, what you need to do to keep the advisor relationship going after you have mastered the steps laid out in my first four articles. In the meantime, this summary should help bring you up to speed. Enjoy.

Part 1: What Businesses Wish Their Accounting Professionals Provided

I used the same accounting firm for over 20 years. It was an office of five or six accountants and they handled all my companies’ taxes as well as my personal returns. They specialized in SMBs and did an excellent job when it came to the tax code and our filings.

But, that’s where it ended. Not once in all that time did they ever contact me to offer additional services or enquire about my business. What a missed opportunity. There were any number of other things they could have helped me with that I would have been happy to pay for.

Part II: Why hasn’t my accountant offered to help me help my business?

To be considered a trusted advisor, accountants must first let their clients know they provide advisory services and then actually do some “trusted advising.” Oftentimes, SMBs don’t ask their accountant for consulting services for no other reason than they don’t know they offer them.

Call your clients. Do some marketing. Do anything but find a way to let it be known that these services are an important part of your business. Go beyond providing your clients with reports such as P&L, Balance Sheet and Statement of Cashflow. Find a way to become a business partner and collaborate and dialog with them on a regular basis. What client doesn’t want that?

Part III: Becoming a Trusted Advisor

Most SMBs have an innate distrust of consultants, primarily due to a history of paying for services and not getting what they thought they were going to get. Much of this problem stems from the clients’ inability to define what they want, why they want it and how they plan to use it going forward. They all have big ideas or dreams, but they don’t understand what it’s going to take to realize them. This lack of direction – combined with their natural fear of failure – offers the perfect conditions for accountants to lay the first cornerstone of a trusted advisor relationship.

To begin with, determine where your client is sitting from an emotional standpoint. We all know people should make decisions based purely on facts and deductive thinking, but most of the time, it doesn’t happen that way. Their emotional state is going to impact their decision whether or not to buy and commit to your suggestions or services.

Remember, you have the business acumen that they need but if you underestimate the value of a good “bedside manner” in the beginning, you might never get a chance to show them just how big of an expert you are.

Part IV: The Discovery Process

Many consultants make the mistake of thinking they will get all the discovery information they need from traditional financial statements. And, while it’s true these statements can tell you quite a lot about a business, you should bear in mind that everything in them has happened already.

Of course, the discovery process must eventually take historical financials into account but this should not be the first step. The first step in the discovery process is to ask a lot of questions. You need to get your clients talking. You need to know who they are, where they are and how they got there.

A client’s emotional state accounts for about 80 percent of everything in consulting. You must connect with them personally or you won’t connect with them professionally.

Find out what they want to accomplish and why they think things are the way they are. Your questions should be about having them tell you the parameters of their story. Questions like: “In your perfect world what happens in this situation? How does it resolve? What are the outcomes and how do think this could be achieved? What is stopping you from achieving the desired outcome?”

It’s called collaboration and you want them to enter into it with you. Get answers to these questions, you will be on your way to engaging that client in addition to being better informed as you start to go through historical financials.