The Accountant as a Trusted Advisor

Ricardo Ruiz Betancourt is a former International Committee member for MGI Latin America and is partner at MGI Worldwide member firm MGI P&P Asociados Contadores Públicos, based in Caracas, Venezuela.

In this article, he points out the importance of MGI Worldwide members making that extra effort to become trusted advisors to their clients and the essential steps that can ensure accountants across the globe can provide added value and build strong and lasting partnerships when it matters the most.

New studies have shown how the public accountant has progressively and firmly been able to carve out a role as a trusted advisor for clients. The International Federation of Accountants (IFAC) pointed out that “accountants are the service provider most likely to hold the role of most trusted advisor and, therefore, to be the most common source of advice”[1]. Sabrina Parsons argues that “most small businesses look to their accountants to provide not only bookkeeping and tax services, but also look to them to help keep their business financially healthy, and make the right financial decisions.”[2]

Adapting to new technology and change

Swift technological advancement has changed the role of the accountant over the years. Agnes Ann Pepe states: “Towards the end of the twentieth century the accounting profession began to take on a whole new look. Computers and accounting software has changed the industry completely. With use of the computer, an accountant can now perform statistical accounting or forecasting analysis with greater efficiency. Accounting technology has eliminated the number cruncher sitting behind a desk working on people’s taxes and has allowed the accountant to find new challenges with much more to offer then decades ago[3].”

Progress in information technology and its impact on the accounting profession are forcing the accountants to acquire new tools. Moreover, in many countries, information technology is part of the syllabus and it is even included in postgraduate studies. In other words, nowadays, not only is accounting expertise, how to apply standards and principles and to interpret fiscal matters required, but also an accountant must have a solid knowledge relating to information technology and must be capable to combine this understanding with all aforementioned know-how[4]. The aspects that are causing impact mostly refer to Enterprise Resources Planning (ERP), Supply Chain Management (SCM) Systems, legal requirements related to information technology (IT Governance), Sarbanes Oxley Law, and Business Process, among others.

A well-rounded approach to business

Actually, this research provides a key insight: that the public accountant is perceived as an advisor, which the client can seek out to request advice on almost every business topic; legal matters, complexes financial issues, processes and risks, marketing strategies, payroll management, business development, and so on.

I once attended a prospective client. During the presentation meeting, the conversation turned from the basic required service (financial auditing) to a conversation about business. We talked about their businesses processes. This quick talk included topics related to the company’s products offering, presentation, characteristics, prices, and acceptation from consumers, market segment targets, proposals about cultural activities as a value proposition, storage issues, food distribution logistics, cash control, transportation, security issues and collection. Change management, business complexity and even considerations about social responsibility (always a main issue in our Latin-American societies). To be clear, it was just a conversation not a consulting engagement. The meeting concluded in a very positive way. Days after, we got the contract. The experience shows how these themes just come up and the how clients expect your opinions on these matters.

This story gives us pause for thought: All MGI partners, managers and staff are experts in technical matters, auditing, taxation and accounting. Traditionally, our career has been tied to a learning curve and the process of developing cumulative experience. David Maister mentions that “none of us begins our career as a trusted advisor, our technical skills prevail. Then we begin to focus on our ability to solve more general problems. At the third level we might be consulted on broad strategy issues related to our specific expertise, we are seen in terms of our ability to put issues in context and to provide perspective. We begin to offer advice proactively and to identify issues in their organisational context. Then, we can provide advice in virtually all issues, personal and professional. The trusted advisor is the person the client turns to when an issue first arises, often in times of great urgency: a crisis, a change”.[5]

Expanding beyond technical skills

It is interesting to note the site www.cpaaustralia.com.au recently published a report entitled ’The Firm of the Future’, in which they envisage an important growth in non-professional services. Its findings show that such professional services are not mainly related to our hard technical skills, such as auditing, accounting and taxation. Accordingly, it is imperative to capture other knowledge and abilities to provide additional value when advising clients[6].

This is a challenge and also an opportunity for accountants. On one hand, they should open their minds to other and new knowledge; however, keeping an eye on the day-to-day running of a practice can take a lot of time. In my experience, accountants find it difficult to open up to new business knowledge because they are absorbed by their own professional practice. Many have organised their firm in a way that they become indispensable, with those at the top unable to delegate and doing both the complex technical work and simpler administrative tasks, like purchasing office supplies. Many also fail to create and encourage professional development for their staff, leading to the creation of a vicious circle. Entangled in the daily activities and having nobody to delegate to or to get support from, many accountants become too focused on technical issues and are therefore missing out on opportunities to grow and expand their own knowledge.

This means that we should stop being field auditors and convert ourselves into leaders of our business and trusted advisors. However, this can be extremely difficult to achieve when all our time is taken up by operational work. This shift in mental attitude can therefore open up a new business perspective for us.

Experience is key to building trust

To become a trusted advisor does not requires taking an MBA or other postgraduates study, although this can help, but our seasoned experience along with reading books and specialised publications - regarding management, risks analysis, business process models, IT, strategy, complexity and change management - will give us this capacities to become such an advisor. It requires “an integration of content expertise with organisational and interpersonal skills”.[7]

That capacity will be our value proposition, the distinctive element that will differentiate us from our competitors, who own the same technical qualifications. Being perceived as a trusted advisor, will give to our clients a grateful experience from the emotional point of view, taking into account that emotions, as well as reason, are a relevant element in the provision of professional services[8].

The aforementioned article from CPA Australia nevertheless pointed out that specialisation will become one of the key elements for the successful future of firms, no matter if they focuses on traditional professional services (accounting, auditing and taxation) or shift their focus to services like business and financial planning, among others[9].

Building alliances for best results

A final warning: These acquired knowledge or capacities, do not signify that we are experts in everything, be careful. A consultant must be authentic, this “means being honest with ourselves and being direct and honest with the client”.[10] We must have the ability to say “I don´t know”, but also have the wherewithal to find the answer. Then, we need a balance, as well as understanding the importance of developing strong links with those who have different expertise than us. If we decide to stay in our technical niche, we must not lose sight of other business aspects.

Nowadays, this is a common topic and “my guess is that, […]in today’s dynamic world, professional services firms need to foster a careful balance of digital, intelligence and emotional skills to adapt and thrive”.[11]

There is no doubt, for an accountant to become a trusted advisor they must develop capabilities beyond technical matters. Indeed, today’s market and the swift development of technological change demand this.

MGI Worldwide is a top 20 ranked global accounting network with some 5,000 independent auditors, accountants and tax experts in over 250 locations around the world. MGI P&P Asociados Contadores Públicos has been a valued MGI Worldwide member for the last 13 years.