Why no Management Accounting?
75% of Accountants think we only want Tax work
Yet 89% of us want more than just compliance
Accountant continue to stick to their “tax knitting” despite the fact that most of us clients would really like some good honest old-fashioned business advice.
Recent Surveys reveal:
the Client/Accountant gap is WIDENING
Not everyone wants to offer or pay for every service there is under the sun, but accountants have been progressively reducing their scope of work over the last 15 years focusing more and more on compliance as the demands of governments and taxes have increased.
However, this narrowing has come at a price – businesses both big and small still want, and need, to operate well – efficiently, effectively and above all profitably. And yet the availability of management accounting is now at an all time low.
There appears to be one main reason for this – MISUNDERSTANDING!
The Client GAP – What Clients Want
We conducted a survey over the month of September and unfortunately it appears that accountants continue to think people are completely unwilling to pay for business advice; despite the fact that what is really holding most of us back is lack of time and lack of information.
The graphic below shows the breakup of management accounting offerings each with reasons as to why we haven’t yet proceeded.
75% of us are looking for more business input and advice from our accountants – budgets, cashflows, profit analysis, and business improvement strategies – only 17% of accountants believe we want this work.
What clients want from their accountants & why they aren’t getting it.
To most non-accountants there are no surprises here… but what is surprising is how accountants are continuing to grow the compliance side of their practices ignoring their customers’ management accounting needs.
QUIZ: Is your Accountant any Good?
The Accountant GAP – What Accountants Do
It is worse when we look at what accountants consider to be “proactive service”.
Based on the results of the second survey – the reason for this increasing gap would at first glance appear to be a mix of dis-interest and self-interest (although I feel very sure every single accountant will deny this). I can understand the self-interest, after all even the business of being an accountant is about making a profit; but there seems little excuse for the inability to connect to client wants and needs – given “product” is basic business 101 hence my slightly unfair accusation of dis-interest).
What is a Proactive Accountant ???
– Where clients and accountants don’t agree…
It is astounding that 50% of accountants think it is sufficiently proactive to merely Send Reminders!
Tax and Compliance revenue generate 70% of most practice’s total revenue; so given 70% of Accounting Revenue is generated from within their comfort zone, their strategy has become “do more of the same” instead of “do more of what is needed”.
What management accounting services does your accountant provide?
About the Author
Eve Blackall the small business answer to The Supernanny.
At Smart Accounting you work one-on-one with Eve who has already assisted hundreds of business owners increase cash-flow, grow profits, also ensuring those businesses fetch the highest price when it comes time to sell.[/box]
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