Become a Trusted Business Advisor – 3 Ways

By Libby Bierman, Analyst, Sageworks Inc.

When a business owner is searching for an accountant, choosing one isn’t so simple. Providing financial services – despite what some of your tax-only clients may believe – is far from a commodity. And in many cases, location and even price are immaterial. What, then, is the best way to acquire clients and improve client retention?
 
Providing quality work is part of the battle, but when everyone in the industry touts their “excellent customer service,” you need a clear differentiator. One proven way to add value to professional relationships is to become a trusted business advisor, which involves helping the client’s management team make better-informed business decisions.
 

Five Financial Metrics

While different people have various definitions of business success, there are five key financial metrics that can help you understand your business’ financial success and how you’re faring against competitors:

1. Pre-tax net profit margin

2. Current ratio

3. Quick ratio

4. Accounts payable days

5. Accounts receivable days

– From “5 Financial Metrics Every Business Owner Should Know” by Mary Ellen Biery, Research Specialist, Sageworks
 
Interactions with business clients can and should be informal, so they feel welcome to ask questions. Then, based on their questions (or lack thereof), you can gauge whether they’re simply seeking data or if they’re looking for substantive advice to help grow their business. This kind of engaged communication will help you, too.
 
Here are a few points to consider when meeting with a client:
 
Provide explanations
Don’t just provide data and hope your client will be able to interpret it – especially if you’re not meeting with the client to present their financial statements. Include a written report that explains in plain language the financial metrics most important to the success of the client’s company. With this narrative summary, length isn’t the goal; keep it succinct so the client is more likely to read it thoroughly.
 
Connect the past to the future
Connect historical financial data with its impact on future company plans. Brian Hamilton, CEO of Sageworks wrote, “Numbers are not just numbers – they tell a story of how the company is moving toward or away from its strategic objectives.” Historical numbers can provide the context needed to look forward intelligently and avoid repeating past mistakes.
 
List key performance indicators
Focus your conversation on the few key performance indicators of that business and its wider industry. Determine the most relevant metrics and then explain to the client how those metrics impact revenue and cash flow, because those are two indicators the business owner definitely understands.
 
In relationships where you do become a trusted business advisor, you’ll see higher client retention, you’ll uncover additional consulting opportunities, and your clients will be much less likely to view your firm as a commodity.
 
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About the author:
Libby Bierman is an Analyst at Sageworks, a financial information company and Inc. 500 honoree. Bierman is responsible for analyzing trends in the financial data collected from private companies as well as the development of new products for enterprise clients. She received her degree from the Mendoza College of Business at the University of Notre Dame where she graduated summa cum laude.
 

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