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Why your accountant may be headed the same way as the dinosaurs

April 11, 2014

These days, there are two distinct groups of advisors forming in the accounting and business advisory industry. In a recent internet discussion, Rob Nixon, the expert coach to accounting firms, referred to these two groups as the “Real-Time Advisors” and the “Redundant Data Accountants”.

Which camp does your current accountant fall in? It is an interesting discussion. Most accountants these days are drowning in annual compliance work, using data from desktop based systems like MYOB Premier or Quickbooks to complete their clients financial statements before using information that could be between 3-9 (or even 12!) months old to try and have a discussion with the client in order to help them. This is how many accountants have been working for years and it is all wrong! This group are the “Redundant Data Accountants”. They typically display the following characteristics:

  • They haven’t visited your business premises in years
  • They sit around and wait for things to happen
  • They work with financial data that is at least 3 months old
  • They have made no changes or advancements in what services they offer
  • They have not offered you any other services than what you currently buy from them
  • They do not have a team that are trained to offer you any other services
  • They are not up with the latest technologies

Is this your accountant? You may be asking yourself some difficult questions right about now. The way the industry is heading, these accountants will be going the same way as the dinosaurs.

The reason for this is simple. The rise of the “Real Time Advisors”. This group are dynamic, showing adaptability to the changing ways of the industry. They work with real time data powered by cloud based accounting solutions that ensure high visibility of current financial information not only for the client but for the adviser as well. They offer their clients value added solutions that could include strategic planning sessions, goal setting sessions, budgeting, cash flow management and monitoring, debtor management, wealth creation and the list goes on and on. They typically display the following characteristics:

  • They instantly know your current financial position
  • They contact you when they see negative trends in your financial information to help with preventing bigger problems
  • They offer you a cloud based accounting solution
  • They have the expertise they can call on to improve your business systems
  • They visit you
  • They have a team trained in offering and providing value added solutions
  • They offer strategic direction in a way that takes your business to the next level

Is your accountant in this group? If you are you’d already know about Xero Online Accounting and are probably a user of the software. Your accountant is probably pestering you about your cashflow position, or how lazy you are being with your bank reconciliation! They are probably contacting you on a monthly basis to advise of any warning signs. Maybe your debtors are high compared to your billings. Maybe your current bank balance is not enough to cover your looming GST liability. The scenarios are endless.

While you ponder which camp your current accountant resides in, ponder also the financial impact your choice of accountant could be having on your business. It may be scary – but it also should prompt you into action.

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