Why Third-Party Accounting Firms Should Own Business Intelligence
by Lenny DeFranco
This article originally ran in Spring 2021’s PASBA Insider, the quarterly newsletter for the Professional Association of Small Business Accountants.
To learn more, visit PASBA.org.
Imagine a doctor who didn’t advise you on your health. Or a trainer who didn’t customize your exercise regimen. Or an architect who let you draw your own blueprints.
They wouldn’t be very valuable, would they?
For a small business, the equivalent of that doctor or architect is an accountant who has access to the company’s financial data but doesn’t use it to offer any expert advice. Someone who collects paperwork, manages the payables and receivables, and keeps the GL organized — but nothing more strategic.
That kind of accounting is an important service. But it’s not as valuable as it could be.
Accounting firms have a unique opportunity to own strategic intelligence for the businesses they serve. You already have the data a strategist would need. You have insights into the market that your customers do not. Most of all, you see their business from a unique vantage point: you’re knowledgeable, financially-minded, and objective.
In the corporate world, CFOs are becoming ever more important leaders in their organizations. In a 2020 Grant Thornton survey, 42% of CFOs reported spending half their time in a “strategist” role.
Small businesses deserve their own CFO-caliber advisory. And if anyone is able to provide it, it’s you.
Here’s why third-party accounting firms are ideally situated to provide strategic expertise to their small business customers.
See how Plate IQ is helping accounting firms automate their customers’ invoices, bill payment, and spending in this case study.
Accountants have the data
Data is the key input of any good strategic practice. Before someone can advise action, they have to know what’s going on. This is one reason the CFO has become such an important strategist.
In a corporation, finance and accounting is where the organization’s data converges. The P&L, employee information from the HRIS, operational data from across the company — all of it meets under the watch of the finance team, giving them a bird’s-eye view of the company.
Managing your customers’ accounting provides a similar level of data access. You own the systems that run their business: accounting software, their payroll information, and more. Together, this data creates a snapshot that even the owner of the business doesn’t have.
Accountants are objective
In many ways, you know your customers’ businesses better than they do. You can see the tangible results of the managerial decisions they make, and more importantly, your observation is not clouded by personal involvement.
As every accounting firm knows, one of the primary hazards in small business is when an owner lets their ego start dictating business decisions. Or, in another case of personal entanglement, when the owner has a hard time seeing the business as anything other than their founding vision of what it could be or, in their mind, should be — not what it is.
There’s a reason lawyers don’t represent themselves in court. Objectivity is essential to making good decisions. Accountants can provide that for their small business clients, helping business owners steer their company through uncertain times.
Accountants have the right tools
As the old saying goes, any job is easy if you have the right tools. And while running a business is never easy, investing in the right technology is the difference between operating inefficiently and getting a step ahead.
Left to their own devices, a business will invest in a solution once and not think about it again for years. An accounting firm, however, has more of a mandate to always be searching out the most intelligent, flexible, efficient way to service their clients’ workflows.
Technologies like optical character recognition and natural language processing — two machine learning processes that help computers transcribe and interpret documents — are getting better all the time. The businesses that know how to leverage them are able to save minutes from their week and weeks from their year.
If you make it your business to always help your customers use the best tools for the job, you’ll become an important part of the way the owners view their operations.
Accountants have market knowledge
Small business accounting firms usually have a number of clients in the same industry. This gives them a distinct vantage point over the market.
Market knowledge takes many forms, from hearing rumors to keeping up with regulatory developments to anticipating trends. Serving multiple customers in the same industry helps each of them understand their competition and see around corners. Third-party accountants, in fact, have a claim to knowing the market better than any of the businesses on the playing field.
Accountants are comfortable in the weeds
As an accountant, your eye is fixed on the bottom line. You think of business moves in terms of their real financial impact, and likely, their tax implications.
Strategy from an accountant is especially valuable because it comes wrapped in financial and tax expertise. From a business owner’s perspective, advice counts for more when it comes from someone with an innate understanding of its financial and tax ramifications.
This has never been more true than in our current era of PPP loans, dealing with the SBA, and other complex stimulus situations. Factoring in the financial impact of these programs, not to mention the direct help in applying for and managing these loans and grants, is a meaningful form of counsel any small business appreciates.
Grow your practice with strategic advisory
Customers hire professional services for their expertise. Third-party professionals deliver value by providing a service that their customers cannot do on their own. That’s what drives customer retention and grows your practice.
The unique service small business accountants can deliver is strategic expertise. With the right tools and the right frame of mind, you can help your customers manage their companies smarter in ways they couldn’t do on their own. You’ll grow your own business while putting it at the heart of your customers’ success.
To learn more about how Plate IQ helps accounting & bookkeeping teams reduce manual work and eliminate errors with Zero-Touch AP Automation, click here.
Lenny DeFranco writes for Plate IQ about how businesses in hospitality, accounting, and more can gain efficiency and earn revenue through AP automation.
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