It can be difficult for accountants to transition from necessary compliance work to having deeper financial conversations, so here is the framework I used to gain the confidence I needed to lean more into advisory work.
In my firm, we do data entry and review at two separate times. This allows the team to take off the compliance hat and put on the advisory hat. We know multitasking is a myth, so by focusing on data entry one day, we can keep our brains on task and potentially eliminate errors the next.
Once we have reviewed to make sure the data entry is complete and correct, we can move out of the weeds and look at the overall picture. What is that tax return or that monthly financial statement showing us? Looking at comparison data such as year over year or month over month can help highlight those areas that need more research.
Do a little digging
I take those comparison statements and use ratio analysis to highlight the key areas of investigation. I start with period-over-period changes that are 40 percent or higher.
Once those areas of interest are pinpointed, it’s time to do a bit more research and glean some insights to share with clients. I look at the transactional data that happened during this period and the comparison period and ask some key questions:
- What time of the year is it?
- Did something special happen this month?
- Are there any seasonal trends we should take notice of?
- Did the client introduce a new product or service to their customers?
- Any staffing changes?
- Any industry-wide changes that could make an impact such as regulatory or state law changes?
- Did the company go viral?
- Is anything missing?
I take notes as I’m reviewing the data and answering these questions. I add in questions I may have to dig even further in my findings or questions I need to ask the client in order to get a better understanding of the inner workings of “what happened here.”
I look at this like a game of Clue where I’m investigating to see if Colonel Mustard really killed Mr. Boddy in the study with a candlestick. I’m looking for the who, what, when, where, and why to better advise my client.
Once most of these questions are answered, we can create a narrative. Client’s don’t always want to make changes, but we can deliver a written report that will help them understand how we can assist them throughout the year with the data to support it, while avoiding any technical accounting jargon. Instead, turn into Detective Columbo and build your case with “just one more question” (if you don’t get this reference, check out this video here).
Let’s have that meeting
Once you have some basic insights, it’s time to reach out to your client to ask your additional questions. You can start the conversation off with the things you noticed in your overall review and tell your client that you would like to ensure that these “catches” aren’t something they need to worry about.
Typically, clients get immense value just from knowing you are paying attention to their data. The care they will feel knowing how concerned you are about them and their business has such a positive ripple effect. This sets the stage for you to become their trusted advisor.
Now, the client is looking at you as the expert and here is where you ask those insightful questions you wrote in your notes to learn more about their’ business. After you ask your questions, LISTEN. This is the most important part of the advisory process.
It’s only when you pay attention to the words your client uses, the information they share about their business, and the fear or excitement they have about the next steps that really allows you to take the client relationship to the next level. The additional information your client adds to the financial story by answering your questions will help you develop the long-term advisory relationship.
You can begin tailoring the information you share with your client based on the things that are important or that will have a major impact on them and their business. Once you deliver the tailored advice to your client based on their specific needs, they will get a great sense of how valuable your expert advice is in tandem with the compliance services they hired you for.
You will now have the confidence to build these additional advisory services into your monthly or annual compliance packages, ensuring your client can stay in compliance and benefit from this advice all year long. Results can reap long-term benefits for clients and your firm.
Don’t discount the compliance work
None of these conversations would be possible if it wasn’t for the compliance work we do, so I want to point out here that the level of attention and care you show to this day-to-day work is super important as well. Ensuring a business’s revenue, expenses, assets and liabilities are being reported properly will allow firms to do thorough analysis that extends the suite of services provided to clients. The advice provided won’t be useful if the data outputs are inaccurate.
Most compliance work can now be automated thereby ensuring teams have the brainpower to dig into the analytics. It also ensures efficient operations. But compliance work shouldn’t necessarily be commoditized, because these services are generally why clients come to us in the first place.
This is the reason I love the compliance side of things, because I know it’s the start of the building blocks that will allow us to create meaningful relationships with our clients to help them take their business to the next level. It’s the foundation that sets the stage for a business to thrive and survive. It’s the treasure map we can use to help our clients get to their pot of gold.
Editor’s note: This article was originally published by AccountingWEB.