From Compliance to Reliance Or, why your firm should move from scorekeeper to coach

 EDI OSBORNE for accounting today writes:   Nearly every accountant I've ever met refers to themselves as a trusted business advisor. However, when asked what makes them a trusted business advisor, most of their answers better fit the description of trusted accounting technician, acting more like a scorekeeper than coach.

The path from trusted accounting technician to trusted business advisor is a value-adding journey that extends beyond a compliance-oriented relationship to one of reliance, where clients "rely" on their accountant to help them make better business decisions.

For accounting technicians to become trusted business advisors, they must move up the value chain from:

• Being a scorekeeper delivering hindsight,
• To providing technology-enabled, real-time oversight,
• So they can deliver value-added coaching insight,
• As well as mission-critical foresight that clients can rely upon.

VALUE-ADDING STEPS:

1. Hindsight. This is the act of reporting on past outcomes. It's difficult to add value at this level. It's also very difficult to compete with other firms, not to mention the DIY accounting programs that are flooding the market.

2. Oversight. This 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 to keep an eye on day-to-day outcomes, are starting to move into the realm of trusted business advisor.

3. Insight. This 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. Teach them to understand and strategically respond to what's happening.

4. Foresight. This is the science of breaking down company goals and strategies into key performance indicators -- with 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.

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.  [snip]   The article continues @ AccountingToday,click here to continue reading....