Public Accountant or Profitability Consultant?
scandals have served to shaken public confidence
in the accounting profession. Accountants,
themselves, have spent years trying to step
out of the “number-cruncher” stereotype. If
you take a close look inside your CPA firm,
you could be surprised to find out that your
accountant has the ability to be more than your
own personal number-cruncher. Yes, that’s right,
your CPA may have the answer to questions other
than what you owe the IRS. As you will see
in this Business Performance Advantage Success
Story, accountants are taking performance measurement
concepts to a new, and quite profitable, level.
companies only go to accountants to get their
taxes and financial statements prepared,” says
one Business Performance Advantage consultant.
“But after delivering these standard accounting
services for more than 20 years, I realized
that there was a great opportunity to step outside
the box and offer enhanced services that interpret
those same statements.” To that end, the BPA
consultant offered profitability consulting
services for more than five years using a number
of modeling programs. According to this consultant,
convincing company owners of the value of this
service offering was the first challenge. Convincing
them that their accountant was the one to provide
the service was the next one.
BPA consultant continued to search for the right
tool that quickly and easily shows clients
how their financial statement data could be
leveraged into forward-looking performance measures.
After all, improved corporate performance can
often lead to an increase in the client’s bottom
line. Combining the in-depth knowledge of performance
measures with the interactive goal-setting and
modeling capabilities of a software program
allowed the consultant to finally attain this
BPA consultant can now quickly break-down complex
financial statements into easy-to-understand
business drivers. For example, a single page
display might show a wide range of key parameters
such as average days for accounts receivable,
monthly accounts payable, cash flow, etc.
you ever wondered what would happen if you increased
your prices by 10%? What if your debt was reduced
by 20%? Your BPA consultant can work through
many “what if” scenarios, which will allow you
to set goals for your company. Business owners
can specify a desired objective, such as a specific
cash flow figure, and the solution will indicate
how the stated goal may be achieved by adjusting
certain business drivers. For example, a company
may increase cash flow to the desired level
by decreasing the days in inventory from 120
days to 90 days and decreasing the average days
for accounts receivable to 30 days. If this
solution is too severe, manual changes can be
made and the consultant will respond by indicating
how this change will impact cash flow and what
other parameters need to be modified to meet
the original objective.
BPA consultant reports that most of his clients
are small- to medium-sized businesses whose
managers have little or no financial training.
“When you talk to them about balance sheets,
income statements and cash flow statements,
the most common response is a glassy-eyed stare.
On the other hand, when financial data is displayed
in these terms, their excitement is palpable
because now, for the first time, they see information,
not data, and they can understand how this information
affects their profitability. I have yet to
have a client who wasn’t impressed with this
presentation. But even more importantly, every
client who has seen the presentation has substantially
benefited from it.”
scenarios do you want to explore in your own
business? What goals do you have for this year?
Next year? Five years from now? Give us a call
to discuss the things that keep you awake at
night. We can help.