Why accountants need to be like doctors: How to have confidence when offering business advisory services
September 7, 2012
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Note: This article is the fourth installment in our series on offering CPA Business Advisory Services. See Part III
Think about a doctor’s job for a moment. When you tell the doctor that you are sick, he or she will likely run tests, show you the test results, and explain the results in an understandable language. As part of the diagnosis, you are usually asked a lot of questions about your habits, symptoms, types of medications you prefer, and any allergic reactions you may have. Based on all the information a mutual decision can be made on the proper treatment approach.
The same is true for offering business advisory services. As an accountant, you have a wealth of financial expertise and experience that can help a business fix its problems. This could include issues such as excessive inventory days, poor cash flow, or accounts receivable delays. But, despite your expertise, you still need to run tests through your financial statement analysis, and you have to ask questions of your client. For example, if your client has problems collecting accounts receivable, you might ask the following questions:
- How do you invoice your accounts receivable?
- Do you send collection requests via mail, or do you call them personally?
- What are your penalties for late payments?
Based on these and other questions, you’ll get an idea of how to fix the client’s problems. If you still don’t have the answers, don’t be afraid to do the research to find them. It’s okay if you don’t have the answers right away; just be able to provide them to your client in a timely manner.
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