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5 Fad Free Tips for Management Accountants
Posted on 27th July 2017 in Advisory
Written by Freya Hughes
Management accounting is no fad. Your duty is to help clients understand what their figures really mean, how to best spend their money and how to get them ready to grow their business sustainably. This is a heavy workload without enough hours in the day and that’s why we’ve put together this blog to keep you working efficiently and purposefully.
Your role is constantly adapting to industry-specific technological advancements. It can be difficult to squeeze your day-to-day responsibilities in and keep up with what’s being released into the market. You need to be providing your clients with strategic plans, specific to their business, and that takes time. Stop hunting around for the newest updates, and ensure you’re providing the highest quality services for your clients.
1. Communicate in person
This is number one because it’s the baseline of your role. Our community are good at asking questions. They don’t stop with a client’s business goals, instead, they dig digger into personal aspirations, family dynamics and more. You’ll get a great understanding of how you can help and what direction to take them in. Business owners come to you to learn – they’re specialists in their business, but not necessarily in their industry from a financial standpoint. This means you need to provide current and in-depth advice to them – that’s what they’re paying you for, after all.
Spending a morning, or even a full day, with your clients when you first meet them is going to show you how they run their business day-to-day. We hear that this insight is priceless. It is too easy to hide in your office with their spreadsheets, surfacing only for coffee and a spot of lunch. You’ve got to get yourself out there and show your face, this approach shows you’re willing to help by observing and coming from a place on-the-ground knowledge. It’s an active demonstration that you’re actually invested in their success but, more importantly, it will allow you to do your job better.
We spoke to Illumin8 Accountants, based in Australia, recently, and the firm’s owner Andrew told us he spends a day with each client to really drill down into what their business needs.
2. Forecast the future
You can’t do your job properly without a forecast – how else can you, and your client get a grip on their figures. What is normal? What isn’t? What’s on track? And what needs serious investigation? Your role is to look ahead at what might happen, so having a forecast set up for clients is like going into battle fully armed. A forecast will help you and your clients to best strategise their next moves, as they’re going to be able to see for themselves where the peaks and troughs fall throughout the year. Once they’ve had a good look at the information, you can start asking them more questions on their immediate goals.
For example, does your manufacturing client need to invest in more machinery? Can they afford to invest in it now, or is it worth them waiting it out until just after a busy spell fattens up their bank account? Forecasting is going to alert you and your client as to when would be the opportune moment to invest.
Forecasting allows you and your client to be proactive, rather than reactive. Let’s imagine they’ve got one big customer that brings in the majority of their cash. If this customer defects to another business, or skips a month’s order, what will your client do? Are they prepared for this? Keeping regular (as in daily or weekly – forget monthly) checks on their forecast will allow you and them to put your heads together and work out a plan for when money gets tight.
Measuring Key Performance Indicators (KPIs) allows your client to see how each member of their team, and each department, is performing at a glance. If you’re struggling to choose which metrics your client needs to focus on, have a look at our KPI Library and our industry-specific KPI lists. Manufacturer Michael (above) would do well to measure his reject/scrap rate, as he’ll notice if he’s wasting materials, or if his staff aren’t using materials as efficiently as they could.
3. Save the trees
Working online not only saves the trees, but means you and your client can share access to their dashboard, making collaboration a breeze. The ability to access dashboards at any time or place makes you client a lot more connected to their figures. Logging in to see a snapshot of their business’ and team’s performances allows them to fight fires before they really ignite. Working online is like having a security blanket around them at all times, as they’ll have access to their business’ performance insights in real-time.
However, you may be experiencing some resistance from clients about having their reports online. Many business owners will want or need printed reports to show their investors, bank and even staff. With this in mind, we’ve created a PDF report builder, ready to go with templates and prebuilt fixtures. Simply hit ‘print’ and your reports will fly out of your printer, laid out as perfectly as your online dashboards.
If you have clients which would like both, that’s great. It’s pretty smart to use both, because you never know when technology might fail you. Advise them to bring their printed reports to board meetings. Investors often prefer printed reports, so it’s likely they’ll appreciate your client working this way, and will have a take away report to refer to after the meeting. Investors having this on file will also allow them to compare your client’s data to the next meeting’s reports, which will get conversations going around the numbers.
4. Pick out patterns
We see management accountants as hybrid beings: a combination of a client’s accountant, business coach, friend and supporter, and your main role is to help your clients achieve their goals. Finding patterns in their figures is going to position you as their number one trusted person. Sharing these patterns with your client will display your mathematical inclinations, but also will open their eyes to how their business stays afloat.
Recognising patterns is a skill, often linked to gambling – but starting a business is a gamble in itself. Your client needs to use your brain to work out which corner to turn next, almost like deciding which number to bet on. This builds trust and focus, and will result in your relationship becoming a lot stronger and the way you work together more efficient.
5. Speak the same language
Your client might feel overwhelmed after your meetings sometimes, and that’s something we need to change. Being able to present their business’ inner workings to them in a variety of ways is priceless – and it’s easy. Many clients will not be able to get their heads around a wall of numbers in a spreadsheet, and there are a few of us here at FUTRLI who can relate! Speaking to your clients about their preferred way of viewing their data is a basic question, but it will add a lot of value to what you’re doing. A staggering 93% of human communication is visual – so make the most of this. You’ll save yourself and your client time by setting up their actuals and forecasts in a graph, and you’ll see that when clients really get it, it starts important conversations.
If you ensure you do all of the above tips, collaborating will come naturally. Show clients how well your software lends itself to collaboration – log in to FUTRLI and show them the levels of access they can set up. Hopefully they’ll allow their managers access, diversifying the way they operate. If they lean more towards printed reports, that’s not a problem. You can set up their account with alerts to tell you when they’re spending too much, which is a bit like managing their business in your sleep. Call them and let them know you’ve noticed they’re nearing the end of their budget is going to build this trust, and doesn’t require too much additional work on your side either.