Saturday, April 13, 2013

Good News And Bad News For Accountants

Some interesting results in a survey released by Business Review Weekly has some good news and bad news for accountants and financial services in Australia. 

Why SMEs still trust accountants over financial planners

Published 12 April 2013 11:23, Updated 12 April 2013 13:15

Two points from the article ...

Point One:
SMEs have identified accountants as their trusted external adviser, but they may not appreciate that their accountant is there to help design a sound business plan and avoid the pitfalls that can bring down a business,” he says. “This is especially so in the critical period 12 to 24 months after starting.”
The survey also shed light on the type of advice SMEs are turning to for professionals. It found 63 per cent of the advisers time was spent handling transactional or administrative functions for SME clients, and only 37 per cent gave strategic business advice."

My experience would suggest that accountants are poorly equipped to help with business planning beyond the 'get funded type of business plan' that is a fiction created for banks, and not a blueprint for how to drive the business forward. Indeed, few have one that guides the direction of their own business. 

Let's be clear. 

Marketing is not an accounting skill.
Communication is not an accounting skill. 
Technology is not an accounting skill.
Social media marketing is not an accounting skill.
Customer service is not an accounting skill.
Content creation for the web is not an accounting skill.

And sadly, being an advocate for a business is 
not an accounting skill. 

A financial planner too, has a range of skills and not all financial planners are equal. Sadly, the legislation around the industry lumps them all together but while some are merely providing a sales front for selling managed funds, some actually will work through with you on your life ambitions and help you create a plan that is in your interests - not their financial reward. 

So how do you tell them apart? 

That's a good question. And a good strategy for that is worth developing for selecting (and reviewing the performance) of your accountant and other advisors and suppliers and sometimes customers.

Trusting, or not trusting a 'class' of professionals is a bad idea. 
Having a good process to assess competency, is a good idea.

Point Two:

The survey also points out... 
Cloud-less accountants may be ditched
"Most SME owners said they would replace their accountant if they failed to make the transition to cloud-based computing software.
The survey showed only 23 per cent of accountants servicing SMEs have moved to cloud-based software to manage their clients’ accounts. But of the 77 per cent surveyed who are yet to make the move, 60 per cent said they expect to do so within three years."

The cloud, if you don't know, is where instead of buying your copy of MYOB, you use an internet based  service that you pay only for a monthly subscription, is updated automatically (in the cloud) and is available for you and your employees or accountant with permission, to access as required.  Bank details are updated automatically and you can get your current figures at any time with the press of a button.

This is a real time saver and eliminates so many hassles with keeping the books straight. And should reduce your bookkeeping and accounting costs.

Yet many accountants are still set in the old ways and are not updating their knowledge to participate actively in the way business can be done in this century. 

That can be costing you money.

And holding your business back from reaching out and becoming more profitable and using technology to do more with less in your business. 

We are in a new era and it is critical for business owners to understand that the internet for business is not just playing around on Facebook. Your online strategy needs to be thought out and to do that you need to be able to get quality information that is always up to the minute so you are not left falling behind your competitors who more now than ever could be stealing your business even from outside your local area.

But let me mention a third point the article makes. Many business owners rely on 'instinct' when determining trust. Instinct without a good checking process is a bad idea as the article explains.

So who should you trust?

  • Advisors who are competent at their profession but also 
  • always current in their knowledge of new business information and 
  • who make sure that you are kept up-to-date.  You should look for advisors who 
  • put your interests ahead of what they can gouge you for in fees and hidden commissions.

Oh... and don't look for advice from your accountant or your financial planner on issues that relate to marketing and technology.

Go where that knowledge is demonstrated.

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