The Enchanted Accountant: Three Ways to Become a Trusted and Strategic Advisor

by Christopher Young, Ph.D., MBA, Red Maple Economics – July 19, 2018
The Enchanted Accountant: Three Ways to Become a Trusted and Strategic Advisor

Once upon a time in a land far, far away lived an enchanted accountant who was able to mesmerize his clients with great stories, insights and strategies for their businesses. He was so captivating that his clients cancelled all other appointments to meet with this great advisor and these same clients offered riches and wealth to ensure the accountant saved enough time each week to meet with them.

For the great majority of accountants, the above story is clearly fictional. The non-fiction version of this story suggests that accountants are often pushed aside by their clients, continually renegotiating fees not in their favor and perceived to be quasi regulators offering limited value. One of my strategy clients told me that their accountant is a great historian — can explain everything that has happened over the past 20 years but offers almost no stra­tegic insight and does not really manage the business. Although not shocked to hear this, I understand the reasons why many accountants are perceived to be more tactical and less strategic. With the rush through busy season and the continued push for deadlines, accountants rarely have time to sit back and think for their clients and offer the value that many clients hope or expect to receive. 

So, what can accountants do to offer more strategic and value-added insight for their clients? How can accountants take their professional game from trusted advisor to trusted and strategic advisor? Consider these three steps:

  1. Store data appropriately. Many CPAs store client data in a short, temporal manner, such as keeping data in spreadsheets for the two or three years for an audit, review or compilation. Instead, accountants should consider storing data in a long-term temporal database or spreadsheet, with like-to-like chart of accounts, so that they can understand long-term trends and identify problems or weaknesses that may be escaping the executive. This longer-term data horizon will allow the CPA to compare data to similar companies in an industry or the entire industry. Interesting observa­tions, such as return on equity, return on assets, return on marketing, client concentration ratio, supplier concentra­tion ratio and market-based compen­sation analysis, can be identified and can help the accountant provide great insight to their client. 
  2. Obtain access to third-party data. There are so many interesting third-party databases in the market that can help CPAs make great com­parisons to their client data. Industry data, private company sale data, salary data and similar databases can be used to help make meaningful comparisons. CPAs should provide insight into financial variables that assist in driving value for the client, such as economic returns, cash flow efficiency, risk met­rics and growth.
  3. Make strategic analysis part of your workflow. It is important for CPAs to build into their regular workflow some form of strategic analysis. There will be some upfront work for each client, but once the firm has a unified framework of how you will store the data, adding additional yearly data is not much of a resource constraint at all. This work can be done during the months when staff is not at full utilization. It is also important to use this enhanced knowledge to meet with clients on a more regular basis, offering ideas on how they may be able to tackle challenges and or further exploit great opportunities. 

CPAs who execute on these three suggestions are taking the proper steps to becoming the enchanted accountant and storyteller. The intent of creating a long-term view of a client’s performance and analyzing these results against competitors is step one. A great storyteller is one who creates stories that help their clients learn, identify important messages and trends, and establish a strategic connec­tion with their clients. When it is all said and done, the accountant needs to create an emotional response from their sto­ries, showing their client that while they are preparing the taxes or the financial statements, their knowledge and insight go much further. Once a CPA can initiate an emotional response from a client, and the client recognizes that they care about the strategic aspects of their business, the CPA will move from trusted advisor to trusted and strategic advisor, will be identified as a great storyteller and will ultimately become the enchanted accountant.


Christopher  Young

Christopher Young

Christopher Young, Ph.D., MBA, is the president of Red Maple Economics and a professor at Rutgers Business School Fellow, Institute of Ethical Leadership.

This article appeared in the July/August 2018 issue of New Jersey CPA magazine. Read the full issue.