How Accountants Should be Like Waze for Business
A couple weeks ago, I took my family to Legoland to celebrate my son’s 4th birthday. The park is about 3 hours from my house and I had never been there before, so as we were loading the car I plugged the address into my Waze app. I was pleasantly surprised to see the estimated drive time was only 2 hours and 45 minutes (it was a Friday morning and I wasn’t sure what to expect from traffic).
On the drive that morning, Waze led me through parts of Southern California I rarely get to see. There were a few slow-downs along the way, but we seemed to avoid the worst of it by taking some side streets I never knew existed. And in the end, we arrived at Legoland in 2 hours and 51 minutes (I know we demand a lot from our technology these days, but I am willing to forgive the extra 6 minutes).
When I was a kid and my family took a road trip, the most state-of-the-art navigation tool was the Thomas Guide. I hate to imagine the ordeal if that had been my only option that day. I can picture myself the night before the trip, finding Legoland on page 1168 B7, finding my house on page 927 D3 – and then flipping page after page trying to figure out how to connect the two (if you didn’t grow up using the Thomas Guide – just know that it was never a fun experience). And finding just one route to get there was never enough – there were a never-ending set of questions you had to ask yourself. Are they still doing construction on the 405? What is traffic like on the 5 at 7:30 am on a Friday? Should I take the toll roads?
No wonder my parents never took me anywhere.
It got me thinking – there are a lot of accountants who brag about providing a “road-map” to success for business owners. But business owners don’t need a map – a map is piece of paper that sits in a glove box and only gets pulled out when you need something to wrap up your gum. Business owners need advisors who can help them figure out where they are, where they are heading, and the best way to get there – they need Waze for thier business. And accountants are in the best position to provide that to them.
There are (at least) four features that make the Waze app so much more useful than a map. These same features should also be the foundation for today’s relationship between accountants and business owners.
Use real-time data – The day a map is printed, it is already out-of-date. Waze is constantly being updated and even provides real-time traffic information. Accountants have historically hung their hats on the preparation of tax returns or financial statements. This data is usually several months old by the time a business owner has a chance to look at it – and more often than not, they never look at it. You can’t make business decisions based on information that old. Businesses should be using forward-looking forecasts that are updated on a regular basis.
Identify dangers on the road – One of the things I love the most about Waze is when it tells me a police officer has been spotted ahead. Or that there is a vehicle on the side of the road. Especially when it says those things in the voice of Stephen Colbert. A good accountant should be alerting the business owner about things to look out for – things like falling profit margins, slower inventory turnover or cash-flow concerns. By helping to develop key metrics and management dashboards, an accountant can help a business owner keep an eye out for the dangers without having to take the focus away from running the business.
Have an opinion – When you type an address into Waze, it doesn’t give you every possible route to get to your destination – it tells you the fastest way to get there. If the only thing an accountant is delivering is a historical financial statement or tax return, it’s like handing a business owner a map and saying “you figure it out.” The biggest value an accountant can deliver is an opinion (and I am not talking about an audit opinion). Instead of focusing all their time on generating the data, accountants should spend the bulk of their time on deciphering the financial data to help the business owner figure out the best path to get to where they want to go.
Use the best technology available – I am sure there was a time in history when the map was seen as cutting-edge. Obviously, something like Waze couldn’t exist without the abundance of smart phones and gps technology. In much the same way, there was once a reason why accountants (especially those that worked with start-ups and small businesses) weren’t able to provide this advanced level of service. If you wanted real-time data, an accountant had to be on site at the business on a regular basis. And even then, most of the time was spent entering transactions or processing paperwork. But with the introduction of cloud-based accounting software, automatic bank feeds and integrated reporting and data analytic packages, there are no more excuses.