Understanding what makes you and your business unique is a challenge for any enterprise, but especially for those in the often misunderstood finance industry.
After overcoming that first hurdle, finance professionals must then find the best way to communicate their value to prospective clients. This becomes an even bigger challenge when working with SMEs, whose budgets may be low but whose expectations are often high.
In the 21st-century, finance professionals face another challenge: the disruption of their industry – and all the long-established rules and traditions – thanks to the creep of technology. So in fast-changing circumstances how can you ensure that you define and express your value well as a finance professional?
Andi Lonnen is an acclaimed trainer, speaker and author in the financial sector, and she’s spent the past two decades helping industry professionals define and take advantage of their professional assets in order to enhance their work and business. “When I first started out, I realised if you can understand the numbers then you can really begin to understand business. So I suppose that’s where my love affair with accounting first begun,” she explains.
When she hit the age of 40, Lonnen took a much-needed career break and cycled around Europe, returning home with a new purpose: to start a training academy to help finance and non-finance professionals better understand accounting. Taking the time to fully understand her own skill set, passions and value has helped her build a highly successful company, Finance Training Academy, whose tagline is “from fearful to fabulous”.
Take a broader perspective
Whether in a practice or within industry, the role of a finance professional can certainly be a hectic one. In order to add value to organisations it’s important that accountants take a strategic, in-depth perspective on the numbers.
“When you start linking the accountants to what’s going on in the organisation, that’s where the magic starts to happen. You quickly realise that you can directly assist people and add more value to their business,” says Lonnen. “You can help managers understand how to run their department better, and you can warn if things are going wrong somewhere.”
Misreported profits is a much-publicised area where things can go wrong. In 2014, more than £2 billion was wiped off the value of Tesco after it was found to have overstated profits by £263 million. More recently, BT took a £7 billion hit on the stock market after an investigation found a “complex set of improper sales, purchase, factoring and leasing transactions” had been used to exaggerate the company’s earnings.
“Ethics have a real impact on the industry. Just making sure everything is transparent and above board is very important,” says Lonnen. “There needs to be more professional training provided in these areas because they’re having a real impact on the profession right now, and will continue to do so.”
Technology brings challenges – and opportunities
“Digital innovation has changed the pace of technology. Many accountants still rely on spreadsheets because they’re so familiar with them, but software like Xero can do so much now,” says Lonnen. “For example, you can take photos of receipts from your phone and an app will assign the right nominal code.”
Automation is a hot topic across many industries at the moment, and it has far-reaching implications in finance. As software takes over the administrative functions that were previously the responsibility of humans, accountants must reassess their value and make efforts to diversify their service offerings.
“Innovation like this means the role of the accountant is becoming more about providing intelligent analysis and being able to interpret data, rather than simply doing the books,” Lonnen explains. “You can’t just do the run of the mill compliance stuff anymore – instead, the focus must be on delivering peace of mind for clients and managers.”
To make the transition from compliance to business advisors, accountants need to find opportunities to affect their clients long-term value. With their understanding of an organisation’s assets, liabilities, and capital, nobody is better placed to identify what drives revenue and expenses. But perhaps the real value accountants can bring as advisors is being able to identify risks that require strategic handling such as new regulations, market volatility or macro-economic uncertainty.
No matter what new technology enters the arena, applying the same business principles and strategic thinking is likely to result in success. “Unfortunately, very few SMEs engage accountants at an early stage and ask how they can add value to their business. As well as compliance, expertise in tax can provide businesses with important growth opportunities they wouldn’t otherwise be aware of,” says Lonnen.
Nobody is better placed to advise on financial decisions than the person who has hands-on experience of the books. Whether it’s hiring new staff, purchasing equipment or restructuring debts, businesses looking for ways to grow need to be given sound advice on how to invest their earnings.
Lauren Razavi is an award-winning writer and content strategist, and managing director of communications consultancy Flibl. She has worked on projects for leading global brands such as NatWest, Google and Facebook, and her writing focuses on technology, finance, entrepreneurship and innovation. Follow her on Twitter @LaurenRazavi.