If you ever look for a new accountant for your business, you’ll probably notice many firms advertising ‘business advisory services’. (Disclosure: Xeinadin Group is one of them!)
This can be confusing for some people. What has accountancy got to do with business advisory? Isn’t an accountant’s job to look after your books, make sure all your tax affairs are in order and report on financial performance once a year? And what exactly is ‘business advisory’?
To answer these valid questions, let’s think about that trading performance report that is a standard part of what every accountant offers. What’s the value you get from it? Yes, there are compliance and procedural reasons why financial reports need to be prepared. But in terms of business performance, what difference does looking back at the numbers from the previous 12 months make?
The value comes from using that data to inform decision-making going forward. What’s a sensible operating budget for the next financial period? Can you afford the investments you plan to make? Are there any opportunities to increase your revenue streams or find cost efficiencies to strengthen your margins? What are your strengths and weaknesses, and are you on track with your long-term strategy?
All of this is about using detailed financial insights into your business to look forward, not simply report facts about what has happened. And that is exactly what we mean by business advisory services.
As financial experts with privileged access to your financial records, accountants are uniquely well placed to assist with both financial planning and business strategy. If you’re not getting that from your relationship with your accountant, you’re missing out.
Here’s what business advisory from your accountant can add to your business.
Expert insights beyond the numbers
Most directors, entrepreneurs and business leaders pride themselves on being good with numbers. The financial details are, after all, what success in business is based on. But especially as your business grows, those details get more and more complex. With plenty else going on, it’s easy to miss something important.
And ultimately, of course, when it comes to strategy and planning, it isn’t the numbers themselves that are important. It’s the story they tell about where your business is, and what direction it might be heading in. As well as being skilled in crunching the numbers, qualified accountants are experts at interpreting the raw figures to draw out actionable insights.
It’s this kind of intelligence that generates value.
An objective view
When you’re stood too close to anything, it can be hard to see the big picture. That’s what running a business is like. You have your head so immersed in the day to day operations, it can be hard to step back and see how all the pieces fit together. Which is important for successful strategic planning.
Hiring an accountant doesn’t just give you access to proven financial expertise. It brings the benefits of a fresh pair of eyes who can analyse your business as a whole from outside.
A fresh resource of knowledge
Accountants are often thought of as spending all their time with their noses buried in spreadsheets and balance sheets. But a good, experienced accountant is much more worldly wise than this caricature suggests. And they bring with them a wealth of knowledge and expertise ‘beyond the books’ that can be very valuable to any business.
And obvious example is tax efficiency. The maze of tax rules and permissible tax breaks will quickly swallow up ordinary mortals. But one of the key services an accountant should provide is arranging your tax affairs so you benefit from everything you can benefit from, and pay only what you have to pay.
Similarly, if you are looking to raise finance for your business, an accountant is perfectly placed to advise on the best options. And even with things like market and competitor analysis, your accountant can be an enormously valuable resource to draw on. Individually and as a firm, years of experience working with other clients translates into deep knowledge of the state of the wider market that you can use to your advantage.