Many experts name relevance as one of the top challenges that has the potential to undermine the role and value of a CPA in the future. In fact, I believe relevance separates an ordinary accountant from a true "trusted business advisor". Admittedly, my definition of trusted business advisor is narrower than most. I meet hundreds of accountants every year who consider themselves a TBA but when I press them for specifics about what that title means and how it manifests itself in their practice they have a hard time responding.Relevance means making sure that your efforts and deliverables add important insight or benefit that helps the client move closer to their goals. If you want to be relevant in the eyes of clients, start by making sure the financial information you provide is organized and presented in such a way that informs the client on "what" they need to focus on right now and in the future as well as "how" to achieve better outcomes in specific areas of performance.
Relevance is based on these three criteria:
1) Context: If you have ever gotten a medical lab test result you know that once you look at your current number you automatically look at the standard range for comparison and your past results for trends. You may also have a specific target in mind, such as cholesterol levels),that further inform you about how far you have come and how far you have to go to achieve your goals. This is context. The lab result alone - without the proper context - don't do much good.
Likewise looking at a current set of financials without the benefit of comparisons, trends, and progress toward a goal leaves the end user uninformed as to the real meaning (and value) of their financial information. For the most part, accountants provide some comparisons and trends but when it comes to monitoring progress toward a specific goal, most accountants are so historically focused they assume the client can connect the dots between where they are and where they want to be in the future. Knowing your client's "end in mind" is an essential part of providing a relevant context.
This requires the CPA to have reviewed the client's strategic plan or, in many cases, help clients develop a plan as a standard practice. If you are not regularly having the "end in mind" discussion with your clients, you are missing a critical piece of the TBA puzzle.
2) Timing: There's an old saying, "timing is everything." This is especially true when it comes to the issue of relevance. Cloud computing is making it much easier for firms to provide clients with real-time oversight and insight on their most critical activities. Unfortunately, many accountants only see the cloud as a workflow efficiency tool. The real value proposition with on-line accounting is the insight that the accountant can pro-actively provide. This is a brave new world for many firms that purposely removed themselves from the day-to-day bookkeeping transactions because, in the past, it was perceived as low-end work. The truth is real-time insight (and therefore relevance) is only achieved when the accountant is willing to jump in mid-game to observe and coach and not wait until the books are all neatly tied up and presented for final inspection in prep for other accounting services. To that end, a great many firms are now looking at out-sourced accounting services (a.k.a. real-time bookkeeping) as a doorway to a closer "advisory" based relationship.
3) Impact: This third element isn't possible if the first two are not in place. Your relevance will ultimately be measured by the impact your advice has on the business. As a trusted business advisor, you are good at monitoring the impact of changes in your client's organization so it will be easy to quantify the impact your insights are having on business performance. This means the client can easily cite examples of where your insight guided them to better outcomes. This also means the value proposition (relationship of fees to perceived value of insights) is transparently obvious.
Clients are starving for a true trusted business advisor to help them learn how to make better business decisions, keep them focused on the right things and guide them to their desired future. Closing the gap between what clients really want and what the profession traditionally provides all comes down to this issue of relevance. You'll know you have reached a level of relevance when the client wouldn't even consider making a significant change in their business without first consulting with you. With that level of relevance, comes the moniker of a true trusted business advisor.
