Accounting technicians must move up the value chain from delivering hindsight, to providing technology-enabled, real-time oversight, so they can deliver value added Insight, as well as, mission critical foresight, only then can they really be considered trusted business advisors.
Let's look at each value-adding step:
1) Hindsight is the act of reporting on past outcomes. As the saying goes, hindsight is 20/20. It's difficult to add value at this level. It's also very difficult to compete with other firms.
2) Oversight is the business of reviewing your client's financial information with an eye toward addressing issues before they become problems. Operating in the cloud will soon be ubiquitous and an assumed competency. However, those firms that utilize cloud and mobile technology, not just as an information transfer utility, but as a means of getting closer to their clients and keep an eye on day-to-day outcomes, are starting to move into the realm of trusted business advisor.
3) Insight is the art of helping clients fully comprehend the implications of what appears on their financial statements. We refer to this as Financial Fluency in support of growing our clients' business acumen. Tell them what's happening in their business and you're a good accountant. Teach them to understand and strategically respond to what's happening and you become an essential partner in their success.
4) Foresight is the science of breaking down company goals and strategies into key performance indicators. The operative word being "indicator." Trusted Business Advisors are focused on improving the quality of information for decision makers. They do this by identifying the 20 percent of activities that are driving 80 percent of outcomes. Populating a client's business dashboard with strategically aligned indicators creates an environment of measured predictability.
Firms need to adopt specific advisory protocols that support each of these value-adding levels. For example:
• A Hindsight action step would include organizing the chart of accounts so a client can access more relevant performance feedback by department, service, or product line.
• An Oversight action step might include setting alerts/triggers when key margins go outside of desired perimeters.
• An Insight action step might include regular Financial Fluency training sessions for clients and their key managers.
• A Foresight action step would include the development of five to seven key performance indicators that provide strategically relevant feedback about mission critical activities.
Advisory services are not the same as reporting on what has already happened. They must include deeper insights and relevant perspectives that support the overall objectives of an organization. And to make sure every client benefits from and every team member can provide advisory services, firms must have standardized protocols to avoid falling into the unleveraged trap of Random Acts of Consulting.Last modified on Wednesday, 11 December 2013