An accountant is not a financial adviser/planner and should not be offering investment advice unless he is qualified to do so. But the tight-margin industry of accounting forces accountants to be able to provide more and more services that our clients consider valuable.
One of those services is to advise our clients as to their cash flow and where we think they might be losing money. This is not investment advice per se, and it is essential to understand that difference.
In this respect, an accountant can indeed be a “Financial Advisor” if that advice relates to where the client might be losing money or spending too much. But if you really want to give your clients value for what they’re paying you a month, you’ll need to come up with something more in-depth in terms of financial advice.
One solution is forecasting and reporting tools.
Futrli is our personal favourite when it comes to calculating potential cash flow problems for our clients, or to create highly sophisticated forecasts and reports using its “Advisor” features.
It comes in two primary flavours:
This latter is designed for businesses, although accounting practices can also use it. For this article, we’re going to focus on the former.
We’ve used it for years, and I can tell you from personal experience that the forecasts it provides are impressive. It gives “at a glance” insight into whether or not specific business actions might result in a profit or loss — invaluable data for a client to receive from his accountant.
Where Advisor for Accountants really shines is in its reports. In this tight-margin accountancy industry of ours, adding more services to our repertoire too often means adding more workload to our day-to-day grind. That’s not the philosophy here at We Run Your Practice. Our gameplan is all about reducing workload, and Futrli’s reporting features do just that.
Instead of you having to number-crunch the data into a customised Excel spreadsheet and generate homemade reports — or some other clunky solution as that — Futrli generates the reports on your behalf. You can then simply send those reports over to your client as-is for them to pore over.
Professional financial reports and forecasts which are of value to the client build trust and make for long-term businesses relationships — which is the bread-and-butter of an accountancy firm.
Futrli also offers a white-label solution so you can bake your own branding into the reports.
Futrli Advisor integrates with QB, Xero, Excel and MYOB.
Fathom is another forecasting giant which provides “Comprehensive financial intelligence, performance reporting, dashboards and consolidations,” to quote their website.
One of Fathom’s features which we consider extremely useful is its Goalseek functionality. Using this component, it is possible to tweak various drivers related to a KPI and thereby figure out how to achieve a pre-determined goal. This might actually mean reducing prices or volume in order to increase cash flow, and the internal algorithm which powers Goalseek and Fathom works out precisely what needs to be done to achieve that goal.
All the data can then be downloaded as a PDF and provided to your clients so they can make decisions about their finances.
Fathom integrates seamlessly with Xero, QBO, QuickBooks Desktop, MYOB and Excel.
3. Spotlight Forecasting & Reporting
Spotlight Reporting is a high-end tool which offers tremendous flexibility in its forecasting functionality. It provides an easy-to-use comparison feature which lets you quickly see differences between forecasts.
Spotlight’s lowest-priced plan begins where the highest-priced plans of the previous two offerings end off. It is definitely geared toward a premium market.
Like the other two tools, the more companies you wish to generate reports and forecasts for, the more costly the subscription will be.
Spotlight also integrates with Google Analytics.
Users report that Spotlight’s dashboards are top-notch.
Accountancy practices must urgently modernise
If there is one thing the COVID-19 pandemic taught us it’s that accountancy practices which are not up with the latest technology and service offerings will simply not survive unforeseen disruptions. Accountants tend to be a little too “old school”. Like the local DVD store which didn’t recognise changes in the way people accessed movies, and then collapsed, so will accountancy firms collapse which do not adapt to new times.
Even if COVID-19 hadn’t hit, one thing you must be sure of is that your competitors are absolutely making use of more and more tools to reduce their workload while increasing their service offerings.
Accountancy is a tough field to turn a profit in, and the only way to survive these changing times is to continually modernise, continually improve one’s service offerings while also reducing one’s workload.
As an accountancy practice owner, you must continuously look for new and innovative ways to keep your practice alive without working yourself into the ground.