The metamorphosis of accounting –
cutting costs or delivering genuine growth?
You can be forgiven for being confused about the role of an accountant. It has been under continual development over the years as the profession has expanded, technology has developed and business needs have changed.
The role has morphed into a new beast.
Traditional accounting has always been very focussed on the numbers. At times, this focus has been to the exclusion of all else. In fact, many businesses (particularly those who are small to medium, and reliant on outsourcing their accounting requirements) still work with their long-time accountant. And while a large percentage of accountants have embraced the metamorphosis of accounting into analysing more than mere ‘numbers’, there remain those who haven’t budged from the traditional approach.
Traditional accounting versus modern accounting – what’s the difference?
The main difference is how we each approach the role.
As a modern accountant, I provide my clients with holistic advice related to their business. I look at the numbers in line with their business strategy, marketing plan and internal systems and processes to ensure that all recommendations are made within the context of the entire business. Many traditional accountants look purely at the numbers in isolation from the rest of the business – they aren’t too concerned with improving your efficiencies or growing your client base, but instead focus only on the figures in front of them.
Delivering genuine business growth
The difference can be evidenced by the actions we often will take within a particular business. All accountants want to advise their clients on business growth – but our approach varies.
A traditional accountant will primarily deliver financial growth via cost cutting. An analysis of the numbers can often reveal ‘fatty’ parts of a business that can be trimmed down to deliver a positive financial return – although a conservative approach, it can deliver the desired results.
But is it sustainable, and will it deliver long-term results? I would argue no, which is why I am a firm believer of the progression of modern accounting.
All clients want to see growth, and across all areas of the business. My approach is simple – I look at the entire picture with a goal in mind of increasing the bottom line and improving my client’s profit margins. In a nutshell, I look at sustainable business growth.
Taking a holistic perspective of a business, and implementing changes at the core of the business that will deliver improved financial returns over the long term, is common sense. It is, however, overlooked by many business owners (and their accountants) to the long-term detriment of the business.
So… what side of the fence does your accountant sit on? And where are you?
Do you view your accountant as an essential business cost, or as in investment in revenue generation? I’m keen to hear your thoughts!