As you may know, I head up the Crunchers franchise and through some research I have done recently, I am wondering if we bookkeepers shouldn't take the lead and start offering number based business advice to clients?
I have trained as a tax accountant and through my role as the Marketing Director of a firm of Chartered Accountants I educated myself on small business marketing and management. From this I have a complete business development program which is numbers based.
It seems to me that bookkeepers are ideally placed to offer business consulting advice by rolling this into a bookkeeping/management accounting service. This would uplift the value of the service which makes you more marketable and profitable.
For example, if you did 10 hours bookkeeping and charged £400 you could add 3 hours extra with business advice and get £800 which improves recovery by 50%!
I think that its dangerous ground for most bookkeepers as your treading in the territory of accountants.
Also of course most bookkeepers existing PII would not cover them for offering this sort of advice.
As you appreciate bookkeeper training doesn't go anywhere near the depth of accountancy students. However, not all bookkeepers are the same and many working as bookkeepers are CIMA or ACCA trained, or have experience from previous work relevant to giving business advice.
As a general rule of thumb I would however advise leaving advising business to accountants.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I would have to agree with Shamus. However when I see something in the numbers that needs attention, for example the gross margin is too low, or sales are down but payroll is up when comparing previous year data. I will bing these things to the attention of the business owner, it's then their responsibility to take action, or not.
A great deal of the time I'm asked questions that need to be answered by the tax accountant and I let them know. Then the response is usually, "You charge less per hour, that's why I'm asking you." To which I repond, "If you want the RIGHT answer, you must pay the person who has the knowledge."
So, bottom line... while I do leave the advise up to the tax accountant I will also add billable hours to those clients who insist on asking for my consulting advise. Which, in the end is always... this is my opinion, but check with your tax accountant for the final answer.
I have also done a lot of studying of marketing for my own buisness, and that's partially why I'm here today. I've been looking at Google allerts about bookkeeping franchises. Just a few years ago there weren't any, and I began working to create a system that I could market as a franchise. I'm not there yet and would like to learn more about Number Cruncher's.
Hi Bob, I am unclear of what kind of advice you are suggesting. Tax advice, Marketing advice, the pro's and con's of incorporating?
I think if a bookkeeper sticks to just bookkeeping then it is unwise to offer advice of a taxation matter, however if that bookkeeper also offers to do tax returns I would hope they are sufficiently aware of tax rules at least from a basic level and hopefully would have resources for anything more complicated. To be honest it would not hurt all bookkeepers to have some knowledge here so long as they offer the caveat of 'this is my opinion but I am not qualified in this area to give a definitive answer'. I very often get asked questions relating to employment law, and I know a reasonable amount of what I need to know, but again, I say I am not an employment solicitor so it is my opinion. The problem is that I cannot charge for my opinion unless I am willing to stand by it.
If your number based advice relates more to , well your turnover went down by 8% and your GP was 4% down and unless you address sales, purchases, prices etc then you may be in trouble next year, then I think that would be good advice without taking any real risks but it's the kind of computation that you could do in 5 inutes on he back of a fag packet, so what you could charge for it I don't know.
I think if you charge for advice then you are liable for the outcome of that advice.
I would never give advice that isn't within my expertise, as Rob says you need to make sure it's an opinion and only a guess with no guarantees.
Of course it does beg the question of keeping your client, if you see that things are failing and you know that if they fail then you will lose an income then maybe it's in your best interests to steer people towards a better business plan.
I think all of this would come under a good business relationship, in my experience business consultants/advisors tend not to be worth their money, in fact they manage only to save the company pretty much the cost of their advice. \o/
I think I would just contact a local adviser and ask them to work with me. The way I see it is that there are experts out there who are crying out for business and all we have to do is network to expand our services. Setting up a basic commission agreement is easy, obviously these are more prone to failure as the agreements become more complicated.
I am not talking about tax advice and perhaps some of it would be basic like running what if analysis on pricing.
What I can tell you is that many accountants do not give "business" advice in the area of marketing and business management. However, many are starting to develop these skills BUT I think bookkeepers could do the same and are in the idea position as they are closer to their clients.
This could include targets, budgets and KPI's as well as facilitating developing Strategic Plans and Business Valuations.
I think most of these things would be fine for a bookkeeper to offer if they felt able to do this kind of work, especially budgets and cashflows and business plans. I sometimes find that kpi's sound very impressive but are normally so obvious as to not be worth mentioning. Business valuations, give 100 accountants the job of valuing a business and you'll probably get 100 differnt answers!
