In the past, I’ve blogged about what we see as the main problem with “mainstream accounting”– and how we’re changing it. (See This Changes Everything Part 2 post if you’d like a reminder.)
We’ve made it a mission to make sure that no business – of any size – has to fumble about in the financial dark, with no idea of how they’re doing. The technology of the last 5 years has made that possible.
Our secret sauce is to build a service offering for our clients that use this technology – and use it to transform their understanding of their business. We remove their financial pain-points, help them to understand the impact of their decisions, and eliminate nasty surprises.
Many of the clients who come on board tell us this, sometimes in these words:
“Everything to do with my numbers has been horrible, for too long. I’m done. Fix it. Please.”
When we started, that was our initial focus: to dramatically improve a deficient process and thus improve our clients’ lives. After all, we’d remove all the bad associations or limitations surrounding their numbers – and as my 9-yr-old son just told me, subtracting a negative is the same as adding a positive…
We’ve been surprised by the take-up: so many businesses are embracing this that we now have two staff members who are fully employed in setting up these systems and “onboarding” new clients.
But…. although there’s value in removing those bad things, there’s a limit to how far that can take you.
Accountants who make a difference
With this as the foundation, we’ve been paying more careful attention to what some of our clients have been telling us:
“We’ve got this far through smarts, hard work and good luck. So far this has been without any good financial information or understanding what drives our profit. That’s not been a problem in the past – but now we’ve hit a ceiling. To grow, we really need to start managing with data. Where do we start?”
For a public accountant, this is the holy grail. This is known as advisory work, which we at H&Co define as “an interaction that improves your client’s business”.
Now, decent bookkeeping, painless audits, efficient tax compliance and planning are good things, and too many people do without them…. But I’ve never yet a client who was excited by these things. Which probably explains the profession’s historic image… And here are our clients actively begging us to help them build and improve their businesses!
What are advisory services? How can we improve your business?
Here are some examples. We have projects currently underway on all of these:
- Budgeting, forecasts, cashflows – OK. The basics. So at least you have a way of benchmarking where you stand today and holding yourself or your team accountable to targets. But you’d be amazed how many businesses lack these fundamentals. Easy with the new tech.
- Costing – how to make sure that you’re pricing to make a decent profit, and when to pass on sales opportunities because of their opportunity costs.
- Profitability improvements – how to leverage strategic pricing to maximize profits; how to improve your bottom line by offering to pay your suppliers faster; how to evaluate the impact of a marketing campaign on your bottom line
- Risk and volatility – how to reduce these in your numbers; or improve your bottom line by taking them on.
- Metrics – what should you be measuring in your business whether it’s a five dials model or a full-fledged dashboard, how to gather that data and once you’re measuring it -what does it mean?
- Improved financing – how to identify and obtain the best financing for driving growth
And that’s just those with direct financial impact. Other advisory firms we know help with strategy selection and implementation, HR, etc. etc… Of course, we also build and implement the systems that can capture and present this data – and we’re talking complete dashboards, not just financials.
Surely this can’t be new?
Well, no, this isn’t. Accounting firms have been offering advisory services since the profession began.
The problem is that it’s often been impossible to do it efficiently. We’ve talked to a lot of people who offer a lot of advisory services, and the problem they always mention is that you need to have clean data. A lot of it.
That’s traditionally been the blockage. Businesses may have data, but it may be in incompatible formats or contaminated. Or one data set contradicts another. And so on. Which means that advisory is harder than it should be. “It’s easy once you actually have the numbers.”
As Steve Jobs commented, the world has now changed. And this brings us back to where we came in: By creating and automating systems that are clean, run with minimal human intervention and actually talk to each other (hello, single-point-of-truth), it opens the door to much “cleaner” advisory. Which means it becomes accessible for many more businesses.
And who wouldn’t want to improve their business – or their clients’ – if they had the chance?
Tell us what you’d love to know!
We’re developing these services every day. Tell us ONE THING that would really improve your business life – an easier way to get information; data you could trust; understanding how actions improve your bottom line. We’d love to see where it can take you!