Accountants’ insights and skills are well suited to assisting other business functions to reduce their costs and increase their revenues, such as:
- Advising around negotiations
- Identifying performance blockers
- Reviewing pricing
- Helping to increase marketing ROI
- Assessing remuneration structures
As financial consultants for client businesses or finance leaders within organisations, accountants have a unique and often unmatched view into the mechanics of a business. They see where debt lies and where profit is made. They know where legitimate expenses are incurred and where the business is leaking cash. And throughout their careers they have seen the same across numerous businesses and industries, identifying best practice along the way.
As Edward Frank, business turnaround expert and CFO/CSO of aviation company Craft said in his report Is your Finance department a profit centre?, “The finance department has the most comprehensive and detailed view of the entire organisation. Not only are they charged with monitoring every dollar going in and out of the organisation, they have unmatched visibility to the financial effect of each and every activity throughout the organisation.”
Holders of powerful business insight, accountants should do so much more than just end-of-year tax, and budget/P&L spreadsheets. Their knowledge lends itself to the improvement of every profit centre within the business.
Here’s how.
Advise around negotiations
It’s often difficult for the people who work closely with suppliers, even those that make up great proportions of a business’s expenses, to negotiate the sharpest costs. This isn’t necessarily down to negotiation skills (though training in that respect can pay off), but is often due to a lack of familiarity with the way the suppliers’ business works. That’s where their accountant comes in.
Accountants can provide insight into the likely operations of the supplier business, can review other sources to compare costs and create competitive tension to lower prices, and may even manage negotiations on behalf of their client business.
Identify baked-in performance blockers
As an outsider to the business or particular departments, and with the ability to understand the value of various resources’ time, contributions and potential, accountants are excellent at identifying what Frank refers to as “we’ve always done it that way” processes.
These are “certain easily identifiable opportunities that have been taken for granted for years and continue to be ignored,” he says.
Accountants have often seen best practice, so can advise on better ways that other departments and businesses manage similar processes, to improve performance, free up staff for higher-value tasks and potentially increase profit margins.
Review pricing
Is a client business charging enough for their products and services, or too little? Accountants should work closely with their clients or with other departments to ensure regular pricing reviews that consider market expectations, cost of sales and profit margins.
For the accountant, this involves consultation with the sales and marketing teams, with the operations department and with those responsible for acquisition of products, parts, materials and people.
Perfect pricing is an outcome of market expectation and cost of product/service to the organisation. Often, the company’s accountant is in the best position to do that calculation.
Manage marketing spend and maximise ROI
Where is the business’s advertising paying off? Which forms of marketing offer the best bang for your buck? Which markets are most responsive? Where does the lowest spend offer the highest reward?
Marketing teams can be challenged to measure their return on investment – and maximise it – and accounting insights and techniques may be helpful.
Start by speaking with the marketing team about their goals and where they are spending, and sharing financial information they may not have access to that will help them better understand the costs associated with their work.
From there, accountants can partner with marketing teams to ensure return can be measured and expenditure is contributing to the achievement of high-priority goals.
Pay your people right
HR teams are being challenged to understand and meet changing expectations on job flexibility, working from home and salary.
Accountants can assist HR teams by offering market intelligence, including salary benchmarking, and advising on other options to improve a staff member’s take-home income while boosting business performance, such as results-oriented bonuses and share options, or perks such as novated car leases.
When businesses see their accountants and finance leaders as insightful consultants to their various cost centres and revenue centres, performance can be significantly boosted as a fresh set of eyes with a deep knowledge of the organisation’s finances identifies new opportunities.
Beyond tax and P&L, accountants can become trusted business development consultants, further lifting their real and perceived value in an increasingly competitive business environment.
