New Model Business Advisors
The increasing influence of technology on the global economy is changing the shape and structure of companies and the way in which wealth is generated.
Becoming an entrepreneur is now easier than ever before, as lower barriers to entry and the growth of e-commerce and trade agreements offer access to huge international markets. New businesses, no longer confined by geographical boundaries, have unlimited potential for growth if they get their business models, products and markets right.
A corollary to this is the changing demands and challenges that these businesses are exposed to and the advice they require in order to negotiate hurdles on the way to success. Accountants have historically been among the most traditional professional advisors, working around a framework of laws and regulations to compile company accounts or assess tax liabilities. The accepted profile is one of a specialist, limited to aggregating and assessing figures rather than providing strategic advice to a client.
That view is changing, rapidly, and the most forward-thinking accountants are pouring significant resources into rebranding themselves as strategic advisors and business consultants, as opposed to simply offering account preparation or auditing services.
Two words are consistently used by accountants within our network when discussing this issue – proactivity and dynamism. Many of our members now offer an interim CFO (Chief Financial Officer) service to their clients, taking a central strategic role in the client business and working directly with the owner or CEO on growth plans.
Being proactive about offering these services, rather than waiting for clients to ask for them, is also critical, since executives don’t always recognise potential benefits to their business until they are pointed out to them.
John Curzon, Founding Partner at CCK Strategies in Oklahoma, USA, says many of his clients are not used to working with accountants who also act as strategic business advisors.
“New clients we work with are not used to being asked the questions we ask. The better the reputation we get for this type of work the more exposure we receive, since the entrepreneurs we work with want close collaboration to help them break into new markets, expand their business, or identify new technology that might impact them.”
This view of clients needing closer collaboration with specialist advisors is endorsed by Florian Diener, Managing Partner at Diener Advisory in Baar, Switzerland. He says that his clients value help with accountancy-related problems such as productivity calculations or analysis of pricing information.
“The questions my clients ask are very market-related, I have to get out of the role of passive accountant and work through the client company’s strategy, talking to different departments and supporting the CEO’s decisions with figures and data.”
It may be tempting to conclude that this collaboration phenomenon only applies to smaller firms without the in-house expertise to deal with strategy themselves, but multinational firms are also struggling to deal with the shifting demands of a globalised economy. Large firms may have greater resources, but typically those in-house accountants are more focused on running the day-to-day business and are not in strategic roles.
John Curzon, again.
“Even companies with dedicated strategic accountants have limited access to developments in the wider economy and the rest of the world. We are able to partner with them and our network colleagues to provide information about changes in important areas such as foreign tax law.”
The advice given to larger clients often extends to training their existing staff how to become more strategic and proactive. Florian Diener describes it as a state of constant learning.
“I field questions as wide-ranging as how to digitalise financial records, or how block chain technology will affect a client’s business. I need to remain plugged in as new developments arrive, constantly reading or talking to specialists, while developing an understanding for my clients from an accounting perspective.”
New technology is a good example of where accountants can add strategic value. The fields of block chain or cryptocurrency are awash with new concepts, strange language and potential opportunities. A good accountant should assess this against a framework of value, using their skill with numbers to understand the opportunity properly, in terms of how revenue comes through the door and what types of expenses there are. This creates a bottom line and a net profit to the business and can be used to work out the ultimate value for the owners or shareholders.
As John Curzon is keen to emphasise, “no matter what industry we are talking about, we always need to come back to value for the owner.”
In conclusion, we must return to the key concept of proactivity and dynamism versus passivity. Those accountancy practitioners that remain in a comfort zone, relying on trusted revenue generation in the form of account preparation and auditing, will likely struggle to survive. Those that see the bigger picture and proactively offer relevant advisory and consultancy services, should thrive.
The above extract was taken from a larger piece, the full pdf version of which can be downloaded via the button below or by request via email@example.com.