The accounting sector has grown a lot since its humble beginnings. If in the past, accounting was reduced to the universe of figures and financial spreadsheets, today, accounting may contribute to the foundation of a successful and profitable business. Of course, not all accounting branches are created equally, but advisory accounting is certainly the most complex of them all.
What are the three levels of accounting?
The accounting industry, just like any other industry, has different levels of complexity, each accompanied by its own methods, purposes, and advantages.
Compliance accounting – helps clients comply with the regulatory requirements. Compliance accountants provide bookkeeping and tax services, as well as put together financial reports. Clients pay for compliance accounting services according to the billable time invoiced for each task.
Performance accounting – focuses on helping the clients improve their profitability and encourage their growth. Performance accountants work with financial reporting and various business intelligence tools and base their services on key performance indicators, such as net profit, sales growth, and staff productivity.
Advisory accounting – contributes to establishing long-term business strategies and managing risks to ensure business development and profitability. Using sound accounting practices, analysis, and technology, advisory accounting professionals go beyond compliance and focus on guidance and strategies. They provide both accounting and value-added services to help clients make informed business decisions, increase their cash flow, and prevent accounting issues.
What are the benefits of working with advisory accounting professionals?
An advisory accounting professional provides support, advice, and guidance for your business to achieve profitability and growth. As a matter of fact, over 84% of business owners consider their accountant to be a reliable business advisor. Advisory accountants engage with the client, develop business strategies, and offer consulting services according to the client’s needs. Using their experience and knowledge, as well as technology and automation tools, advisory accounting professionals can help businesses with:
- Cash flow forecasting
- Revenue projections
- Regulatory reporting
- Operations reviews
- Loan applications
- Tax planning
- KPIs and metrics
- Tax and business planning
- Workflow improvement
Advisory accounting professionals provide services that can very well be likened to the role of a chief financial officer (CFO) due to their vast financial expertise that goes beyond tax planning and reporting. They can easily be considered trusted business advisors who help clients get accurate insights and analysis of their business and materialize them into profitable business decisions.
Does your business need accounting advisory services?
If you are a business owner who needs accounting guidance or simply can’t do everything an advisory accounting professional can do then your business would benefit greatly from working with an accounting advisor. Accounting Advisory is beneficial to a variety of industries by simplifying their accounting functions and providing guidance.
An accounting advisory professional can fill the gaps your business may have when it comes to financial assessment and planning. They help businesses examine and evaluate their financials now and help plan for the future. Through financial clarity and analysis, an accounting advisor can identify the weakness of an organization and develop a financial plan that resonates with the owner’s goals and values.
Accounting advisory is so much more than spreadsheets and reports. It is a partnership with business owners that helps them better understand their finances, foresee the challenges ahead, and prepare for potential risks. Furthermore, it helps a business acquire the right technology, business tools and trains the staff on how to streamline accounting work systems. Working with an accounting advisory professional will help you set realistic expectations for your business, come up with a timeframe for changes, and develop business strategies for long-term success. Moreover, if you run a small business, advisory accountants can provide the necessary coaching to help you understand the accounting functions and make informed decisions when it comes to asset purchases, investment strategies, and other important steps your organization needs to take to achieve its potential.
What should you expect from your advisory accounting professional?
While advisory accounting professionals are not expected to have CPA or MBA to provide these services and monitor the associated processes, they need to have impeccable accounting expertise and be familiarized with the accounting principles. Advisory accounting professionals should be able to provide all the services provided by compliance accounting professionals, including bookkeeping, financial statement preparation, and financial reporting but they should also deliver a plethora of value-added services.
They should have great research and evaluation skills, be in the know with the industry and market trends, and master the latest accounting software and technology that can streamline routine tasks that allow innovative thinking and long-term planning. As expected, there is a wide range of accounting advisory services, so you should find the professional that best suits your needs.
Accounting Advisory professionals can provide financial, process, apps, compliance, or successor advisory. Regardless of the type of advisory accounting professional you choose to work with for the growth and profitability of your business, you should make sure they are good communicators who exhibit empathy and curiosity. And they should be ready to offer a fresh perspective for you to be able to see your business from a different angle and shed light on practices and functions that need to be improved or changed.
Advisory accounting is about more than just the finance function of a business or its financial statements. It is about collaboration and communication, as well as about revelatory perspectives and regular counseling. This level of accounting often proves to be more than helpful for small businesses that struggle to understand their numbers. Due to their accounting expertise, as well as technological knowledge, advisory accountants can contribute to the improvement, modernization, and overall transformation of a business.