Aug 18 2018
Ask any leading accountant and they’ll tell you that business owners have two major types of factors driving every decision. They make “need” based decisions and “want” based decisions and understanding the difference between the two can help an accountant elevate the role they serve their clients by offering value based services.
Defining Business Needs and Wants
A business needs to operate within the boundaries of the law. Paying the lease for office space, complying with regulations, etc. These are all decisions that need to be made in order to maintain operations. A want type of decision is driven by the desire to do more than just operate. Wanting a business to grow and expand is an example of motivation behind the other major type of business decision that gets made.
Traditionally, accountants have been helping businesses with their needs (tax preparation, auditing, etc.) but there is also an opportunity to aid with their wants. Accounting firms by design make for incredible thought leaders and the value they can offer clients is deep, research based insight. This became especially evident with the onset of the digital revolution, and all of the digital tools that came with it disrupting the industry. ?
Management, marketing, and business consultant Allan Koltin is blunt when describing how accounting firms are viewed in the digital age by clients. In a recent Accounting Today Article Koltin describes the ideal relationship, “the partner on the account comes to my office once a month, and we spend 10 minutes talking about the financial statement. We spend the other 3 hours and 50 minutes talking about any business challenge or financial problem that I’m having in my business and sometimes in my personal life.”
Accountants need to start taking advantage and providing not just number-crunching services, but value based services as well. Utilizing professional industry research amplifies accountants’ broad knowledge and allows for fruitful conversation that will offer clients the consultation they desire.
A client is an owner of several pet stores in the southeast region spanning several states. They are debating expansion but are unable to make a decision on the new location. There are specific data points that can be shared that might help make a difficult decision, such as investing capital and opening a new location, easier. Compare annual growth from 2012-17 to the projected four year annual growth for 2017-2022. It’s a drop from 1.4% to 1.3%. On its own this data can be read as a decline. Compare that to the national figures and a fuller picture starts to develop. Nationally the annual growth declined from 2.7% to 1.8% showcasing that the industry is much more stable in Florida. The level of competition is also lower in Florida compared to the rest of the US. Trends show that millennials pamper their pets and that bodes well for the industry as the demographic continues to grow.
This kind of information is vital for better and faster business decisions and decision makers look for sources of helpful information. The time is right for accounting to provide not just number crunching, but insights on how to beneficially impact those numbers.
Learn more about IBISWorld’s industry research reports and find out how they can enhance your client-facing conversations.