As an accountant or bookkeeper who wants to be seen as a trusted advisor, are you helping your clients choose profit over cash flow?
It may seem like a simple distinction to us, but likely a large proportion of your small business clients don't consciously know the difference. For example, with just a few of your clients in mind, what would their behavior be in the following scenarios:
Do they pay more attention to their current bank balance or the ‘bottom line' on their Income Statement?
When you share the news of increased profit (and the subsequent tax due), do they scratch their head and wonder where that money is?
Both of these are signs that your small business clients really don't understand the difference between profit and cash flow. Yet this knowledge can help them focus on what will help them grow and build a stronger, more stable business.
Situations like this are opportunities to provide your value and grow your own practice at the same time.
Using cash flow versus profit as a topic for discussion, you can easily prove that you have much more to offer your clients than numbers on a report. You can be the advisor they need to succeed.
The Subtle Approach
If your clients have traditionally only spoken with you at tax time or when they need compliance-only record keeping and reporting, you can gently help them see you as more of a trusted business success advisor. How? By making simple observations and asking questions.
Clients may hire us to perform a service, but it's our knowledge and expertise that is the most valuable, since it's what they usually lack most.
Review your clients' books and make note of any trends that may be emerging, positive or negative, when it comes to spending or whether they get tight on cash on a regular basis. Then ask questions that demonstrate that you are interested in your client's business and well-being – not just making the numbers balance.
“I noticed the balance in your operating account was lower than normal last month. Did something unexpected happen? Did you see that coming or did it stress you out?”
By starting simple and showing you care, your clients will likely open up to give you a wider view of what's going on in their businesses. It will likely also reveal additional services you can offer that they may not realize you can provide them. In this case, could they benefit from some budgeting or cash flow forecasting?
Watch Your Language
One of the most common (secret) complaints of small business owners is that they don't understand what we say to them. Because they don't want to seem like idiots to us, they usually just nod their head when we speak. But they won't benefit from our advice if they don't understand what the heck we're saying to them!
When explaining anything to your clients, don't just look at the numbers, look at your client's face and check his expression. Does he understand you, or is he just counting the minutes until your meeting is over? Are you using accounting jargon, or would your grandmother understand what you just said, if she were sitting in the room?
Don't assume your clients understand. Don't talk at them either. Whenever speaking with clients, it's usually best to take a collaborative approach. That means it's a two-way discussion. Ask questions and offer practical ideas for how your clients can increase both cash flow and profits, and how that will affect the strength and stability of the business overall. Ask them about their goals and look for ways to further support them. Again, you will likely find additional services you can offer in the process.
Making the transition from compliance services to filling a more valuable consultative role, the one of trusted advisor, is not difficult. It starts with your choice to slow down and really see your clients, empathize with their situation, and offer bite-sized education and insights in language that they can easily understand.
Making this shift, starting with topics like cash flow and profits, will quickly demonstrate to your clients how you can make a big difference for them almost immediately. They will start to see you as an advisor they can rely on. When that happens, everyone wins!
If you're a bookkeeper and you're looking for more ways to provide high-value advisory services (even if your clients currently see you as a data entry clerk), then check out The Trusted Bookkeeper course. You'll get a deep dive into making the transition one step at a time.