What Does Trusted Advisor Really Mean?

What Does Trusted Advisor Really Mean?

Every conference we attend, every webinar we see about advancing our practices, every blog post we read on beating the machines, we see the title Trusted Advisor – almost as if it’s flashing in neon lights. It’s the way of the future. It’s how accounting firms will continue to prosper in the face of the technology shift. It’s what we all should be to our clients, but what does it really mean?

Let’s examine the facts. Yes, the machines are taking over. For years we’ve been told there is no more data entry; there is only data management; but even that is being handled more and more by machines as they learn our patterns and our rules. 

So, what is our role? What is a Trusted Advisor? 

The simple answer is – it depends

Each client has different needs, different levels of understanding accounting, different perceptions of what they expect from us. Here are a few things that are relevant as we transition into the Trusted Advisor role.

We know more than our clients do. Mr. Client has a really good idea that he’s passionate about, and he knows how to make money with it. That’s his thing. But, what’s not his thing is running a business. He doesn’t know the rules: independent contractor vs. employee, collecting and paying sales tax, and whether those comfy shoes are deductible. We do know the rules. Mr. Client relies on us to guide him through this unfamiliar territory. He trusts us to advise him.

Reports are only numbers if you don’t understand them. Recently, I was sitting in on a meeting with a client and his CPA. The young man was making a lot of money and was seeking advice on whether to expand. We thought we were having a productive conference until the CPA said something about the P&L, and the client interrupted to ask, “What’s a P&L?” 

It’s not uncommon for clients to be unaware of Income Statements, Balance Sheets, and A/R aging. We are doing our clients a disservice if we produce monthly reports and send them as an email attachment. The Trusted Advisor engages with the client in person, on the phone or via video to present the reports and explain them. Point out trends. Mention anomalies. Explain the difference between profits on the bottom line and cash in the bank.

They don’t know what they don’t know. Even those clients who have a basic understanding of reports may not know what else we can provide. Steve Jobs was famous for giving the customer what he didn’t know he needed until he saw it. We can follow that example. Does your client need a cash flow projection? Of course he does, but he may not even know that’s a possibility. Prepare one for him. Show him the value of advanced reporting. What else can you provide that the client doesn’t expect? The more useful information you can provide, the more you will be trusted as an important member of his support team.

Machines have no empathy. We can program accounting systems to analyze the data. We can set parameters that trigger alerts; but machines will never have the sympathetic ear or the kind voice that our clients desperately need when things go haywire. Do you want a computer to tell you you’re losing half a million dollars this year? Or, do you want a friendly face with knowledge you trust to help you understand what went wrong and offer suggestions to help you turn it around? The business owner wants an expert they can trust to help them through the dark days.

Even the easy days have their challenges for some. For example, one of my clients suffered a brain injury. He’s a brilliant man, but he sometimes struggles to communicate post-trauma. I listen to him. I don’t mind answering the same question six times or explaining a simple thing in a different way until he gets it, because that’s what he needs. His business is small and doesn’t have many transactions a month. I don’t do much for him – but, in this sense, I do a lot for him.

However you choose to define your version of this role, the basics are the same. Be smart. Be kind. Be valuable. In other words, be the person you would like to have as your own Trusted Advisor.