And how accountants can leverage them to be trusted advisors.
By Hitendra Patil
It's said that accountants are the trusted advisors of their clients. But in reality it’s a myth – as far as business owner clients are concerned.
Peer groups, associations, similar business owners, people from the same industry ... entrepreneurs don’t listen to anyone else who has not “been there, done that.” They may hear. But they rarely listen.
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After talking to several business owners about what they expect from their accountants, we figured out six key insights into how entrepreneurs think.
1. Entrepreneurs understand only their own. Entrepreneurs are driven. They are in pursuit of their dream. They are in their own world. They have jumped in the water because they are passionate about their aim. As an accountant, you can only try to tell them the big challenges in their accounts. When you do so, they will become even more driven! It’s not about presenting accounts at all. So what can you do?
It is about first understanding their passion and then telling them if they are closer to achieving their dream or actually drifting away from it. That’s what will make them feel you are their trusted advisor.
2. Entrepreneurs don’t select from choices. Steve Jobs created the iPod, iPhone and iPad, when none existed before. He created a choice. Accounting information can show some choices to them to control or augment what they already have (losses or profits) but it cannot create a choice. More likely than not, they will look at this information, say hmm … maybe ask for more details and logic. And then they will simply do what they want. They will create new choices so that such current challenges are overcome or do not recur. So what can you do?
As an accountant, you may be well advised to just tell them that the situation demands for them to create some more choices. Don’t tell them WHAT (e.g. you need to reduce your overhead), tell them WHY (e.g. look, you are making no money because your overhead is high).
3. Entrepreneurs make their own rules. Sure, they do follow the law but everything else in their business is done how they want. As an accountant, you will be risking your business if you tell them NOT to do a few things or do them differently. They won’t listen. Why? Because they are the ones taking the risk, not you. So what can you do?
That is the key – their risks. If you understand their passion, you will understand their risks and you are the one who can identify whether those risks are indeed taking shape in their accounts. Telling them WHAT are the real risks at the moment is what will get you their attention. Leave the HOW to overcome those risks to them, unless they ask you for advice or suggestions.
4. Entrepreneurs want more. Entrepreneurs dream. Then they acquire skills or hire skilled people to turn their dreams into reality. And once they achieve their dreams, they dream again – not just to make more but because they want to make a positive difference in the lives of more people. It is an extremely different aspect of their persona that most people do not have. So what can you do?
As an accountant, you just need to remind them of their dream (you must know what it was) or prompt them to dream again. If they grow, you grow!
5. Entrepreneurs don’t go with the flow. They swim upstream. When people sell stocks in panic, they buy. When gold prices plummet, they don’t sell, they buy. They simply don’t go with the flow. They won’t bother much about trends in their accounts. So what can you do?
As an accountant, when you see that they are actually just floating around for a while, show them a line graph of their financials. A horizontal, near-straight line graph will wake them up from their slumber. They are used to upward rockets! They will change the flow. You don’t want to be their compass to tell them whether they are going in the right direction. You want to be the inner dome that reverberates their inner voice.
6. Entrepreneurs are already in the future. They live in augmented reality. They visualize the future. They live in the future. And if you show them current financial statements and problems therein, they think you are talking of the past! So what can you do?
Paint the future for them. E.g. make some logical assumptions of their business growth. Tell them if the current trends continue, what exactly their future will look like. E.g. present their 2016 income statement and balance sheet right now in 2014.
As an accountant, you want to crack the “entrepreneur code” in order to be the real trusted advisor of your business clients.