Comments on: Why accountants must become business advisors

By: jasonholden

jasonholden — Fri, 27 Nov 2009 18:42:13 +0000

Lets be honest here Den, how many accountants have ever set up a business? Hands ups ...

Personally I have, firstly a couple of IT businesses in the late 90s and 6 years ago Holden Associates, all from scratch, all did/doing well (touches wood).

Most accountants get the role of partner because they have a paper qualification, not really good enough, but hey thats the way it works!

True a lot of accountants come across many businesse sover their working life, all good experience and knowledge, but only if they pass attention and learn from it.

Personally I also went one step further, I am a full member of the IBC (http://www.ibconsulting.org.uk/ ), doesn't mean I do my job any better, but I know where I am on the Business Advisor ladder, and it does not involve a systemised appraoch as Mark suggest, just not real world I am affriad.

But hey, wach to their own ....

By: Richard Murphy

Richard Murphy — Wed, 25 Nov 2009 13:15:27 +0000

Dennis

100% agreed

Run a real business - I did, in parallel with being a partner. Something like 10 in the end.

It's shocking to realise that in real business 5th April does not guarantee an annual cycle of work

Although Christmas helped in some

My point is: accountants who think they know how to run a business because they were promoted through the ranks to partnership in a firm are sadly mistaken

Richard

By: Mary Adams

Mary Adams — Wed, 25 Nov 2009 05:44:51 +0000

One of the factors that limits accountants today is the growing gap between the needs of knowledge era businesses and the accounting model which was optimized for the industrial era.

50% goodwill in the average acquisition, 60% intangible (vs. 40% tangible) capital investment, equally large gaps between corporate and book value. All these are symptoms of the fact that accountants no longer capture the production and accumulation of value (even though it is being built with hard cash).

These gaps are only going to grow. And accountants will become more and more marginalized as strategic partners.

By: Steve Phillips

Steve Phillips — Wed, 25 Nov 2009 03:22:34 +0000

The problem with most accountants I have run into over the past 30 years is most think in terms of income statements and controls, not business processes. Until accountants get out of this mindset, no one that I know within the business operations (where most of the money is spent and value added) will take the them seriously. For example, accountants worry about how many cups of coffee an employee drinks while millions of dollars of operational deficiencies fly out the window. Accountants first of all must become educated and fcoused on business processes and best practices not becoming a production line for journal entries at the end of the month.

By: StuartJones

StuartJones — Tue, 24 Nov 2009 23:42:18 +0000

One of the biggest problems is the business owners themselves. Too often they don't want to hear what they don't like/agree with and in many cases they won't change what they do. They expect simple answers to what is a difficult and many faceted problem namely "How do we improve the business?".

Turning the problem on its head accountants will have to become better communicators and be willing to invest their time (at least initially) for £nil cost. Business owners will have to realise that time is limited and the accountants reward (fees) will have to be higher to reflect the added value.

A good starting point for any business is to improve its records and stop using their accountant as a bookkeeper. If the accountant doesn't appreciate the change then the business has the wrong accountant. They'll never receive business advice from an accountant who is happy running a Dickensian practice.

By: alastairharris

alastairharris — Tue, 24 Nov 2009 21:29:52 +0000

as nor will a “long form MBA” whatever that is. IMO ACA's that make it in business make it because they are able to understand the numbers in a business context and because they are able to make the jump from looking backwards to looking forwards. An MBA can help with that, but only if they also make the jump from practice – you are quite right that it is not an academic discipline.

Of course the ACA experience in an office with the right work mix is an ideal training ground if you are prepared to make it happen – And I also happen to think the best auditors also are able to understand the business in the same way, but are able to work with an audit hat on. I dispair of the current vogue for box ticking – that fails for both camps.

Having said that, I do think a business model of accountants as business advisors does not work. If they have got it then by far the better model is to get out there and put your money where your mouth is. “Work on the business” rather than advise it! The rewards (money yes, but satisfaction much more so) are much better.