financial reports

Financial Reporting and a Lack of Perceived Value


An accountant and a CEO will often look at a financial report and come to a very different conclusion. The problem is that accountants are providing financial reports and statements to business owners, managers and CEOs who do not value them, understand them or use them when making critical financial decisions.

Oct 2nd 2020
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The lack of perceived value in a financial report is the elephant in the room that no one wants to talk about. So let’s talk about it!

Each day I have the privilege of working directly with accountants, CPAs, bookkeepers and CAs all over North America. My work has led me to find countless financial reporting examples that are hands-off and done on a purely orthodox basis (i.e. a standard P&L and Balance Sheet). These are often directly from the accounting software itself. However, if you also ask a group of accountants if their clients genuinely understand any of these statements, you will get a resounding, “no.” Isn’t that the definition of ‘ironic’?

The Numbers Don’t Lie

Our recent research discovered that of the accountants surveyed, 18 percent reported that their clients don’t even read the report they receive and 46 percent only skim the report for a total of 64 percent. Sadly, if you ask the CEO or a manager what they use to make critical business decisions, seldom will any of them cite the statements and reports they are receiving month to month. Not an ideal situation for anyone involved.

So we have a significant disparagement here. We have reports sent out that are not understood and often unwanted. On the flip side, we have managers making critical business decisions without consulting or interpreting the data from the provided financials.

Internal Problems and Questions

Let’s breakdown the internal problems/questions into to more comfortable to digest bites:

  • How can we bridge this gap of understanding? How do we bring the CEO and financial advisor onto the same page?
  • How do we provide the information to business owners that will enable them to make the best business decisions?
  • How do we do it so that it doesn’t put us underwater with the workload we are dealing with already?

This article is a think piece designed to encourage a discussion. There is a big problem out there! Below are the issues we have found and heard from those in the industry and some of the possible solutions.

Market Problem:

  • Tax season is providing a feast or famine billing cycle
  • Clients’ businesses are struggling to understand/use the power of their financial data to empower them
  • Accountants have so much more value they could be offering

Market Solution:

  • Clients retain their accountants year-round to use the provided advisory services and financial information to help drive the business.
  • Accountants move towards a monthly value-based billing/retainer, thereby decreasing the feast/famine problem and improving the accountant’s P&L outlook.

It genuinely is a great fit.

Problem, I Want to Introduce You to Solution

The open market has been trending towards advisory services for a decade now and the accounting industry is following right behind. By moving more toward advisory services and, ultimately, toward providing additional financial assistance to existing tax client, it opens up the opportunity to become your client’s trusted advisor and not just their “accountant.”

These clients are the same ones that are struggling throughout the year to run their business efficiently. Therefore, it would benefit the most from additional services. The feast or famine issue during tax season becomes void when your role changes from tax advisor and preparer to financial advisor.

Accountants have so much to offer to their clients. Being in contact with clients year-round instead of only January to April will enable you to have a more intimate knowledge of their business and provide services throughout the year.  This change in your role will squash the worry of “how the *expletive* am I supposed to advise a company, I have no idea what to tell them? I’ve never run a company before!”

This struggle is infinitely more common than you may think. Suffice to say, as an accountant, you are not alone. You should be a little apprehensive but excited about changing your role, this apprehension helps us sharpen our edge and prepare just a little more.

The key in all of this comes down to an anecdote that describes the issue well. Think of it as the relationship between a rally-car driver and their skilled navigator.

A rally-car driver wants and needs to have an experienced navigator in the passenger seat. This navigator represents the accountant. The driver of the car is the manager or CEO.

The driver is only responsible for ignoring as much as possible and going as fast as possible, 100 percent of their attention needs to be on reacting to the road. That puts a lot of pressure on the navigator.

They must ensure that the driver is aware of upcoming issues, obstacles, curves and turns. They follow the map carefully and observe where the car is on the map (before GPS navigation systems) and its route. If the navigator loses where the vehicle is on the map, the consequences can be catastrophic or even deadly. Navigation is, in many ways, as challenging as driving and certainly high-pressure.

The business world is very similar. We have a manager who is often pushing so hard that they become blinded by their surroundings and focused intently on an objective.

The advisor is skilled in their craft, but to be successful, communication between managers and advisors must be not only valuable but clear and understandable. The driver must understand what the navigator is telling them and the navigator/advisor must have context.

If the context is lost, the advisor may be leading the driver in an unintended way. Or, the manager may be operating with her/his gut and seldom does that end well.

Listening and Communication

The first step in becoming a trusted advisor is to improve the communication between you, the accountant, and your clients. To get it to a place where both of you are speaking the same language and trust the information you are providing them. The rally-car driver believes and understands how his navigator speaks to him and then translates it into action.

Listening is critical. Looking ahead is vital. Looking back is often necessary. Context is everything when providing advice with financial reports and other financial services. Meeting these demands makes CPAs, bookkeepers and advisors so critically valuable.

Let me say this as well, after having talked to countless accountants, no one is absolutely sure how to find the magical path to success. It is ALWAYS a case of trial and error, hypothesis, and careful execution. So don’t be afraid to get started and then course-correct as you move along the route!


We can all agree, the world, as we now know it, it is painfully fragmented. Reports from every group differ from subsequent reports from the same or opposing group.

As accountants, we’re the lucky ones. Our reporting is remarkably different from media reporting, it is fact-based and facts only. Working with facts is the beauty of accounting and the entire accounting profession, we are based on numbers and data pulled directly from the source and absolutely unabridged. Our goal with this makeover into a trusted advisor is to earn our clients’ trust, so they know the data we are providing is honest, correct and helpful.

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