Profit Hacking weekly issue #10: PeopleWork

Issue #10 🎉. This week we’re talking about what I do!

You might not know this, but my audience is 50% Accountants/CFOs and 50% entrepreneurs. So I’ll be talking to both halves of the readers with this one.

Why you need an advisory accountant - Why you should offer advisory services.

This newsletter is by:

Profit and Grow is a fractional CFO, bookkeeping, and tax planning firm helping professional service businesses earn and keep more money by maximize their PROFIT, minimize their TAXES, improving CASH FLOW, and making the wisest business DECISIONS.

If profitability and revenue are the most painful parts of your business, stopping you from focusing on what you do best, visit profitandgrow.com and book a call today.

We ALSO help accountants implement Client Advisory / CFO Services in their firms. Add $250,000 in revenue, guaranteed! Email me for more details.

[email protected]

Client Advisory Services, CAS as it’s referred to in a firm, is the newest discipline in accounting.

(I’ll refer to it as Advisory Accounting to spare you the acronym.)

Unlike Cost Accounting, Financial Accounting, Tax Accounting, and Managerial Accounting. Advisory Accounting isn’t taught in school.

Most Advisory Accountants are self taught or have a unique background.

If you caught the earlier issues, you know which camp I’m in.

Major tax bills, unknown financials, and failure, drove me to the world of accounting.

As a notoriously poor student, it should be of no surprise that I’m not into the paperwork of accounting at all. Luckily, paperwork accountants need someone to do the peoplework.

Someone who can interpret the reports and use them to explain and solve problems for the clients.

“What actually is the peoplework of accounting?” you might ask.

The peoplework boils down to problem solving.

We are professional problem solvers.

Maybe an oversimplification.

We solve problems uncovered by the financial statements. We take dreams and turn them into achievable goals. Broken into milestones, with actionable steps, and target dates.

Advisory Services MUST include but are not limited to:

Financial Statement Analysis

We tell you the story written on your Profit and Loss Statement, Balance Sheet, and Statement of Cash Flow.

If the business is healthy, if the business is growing, and if it’s not, what’s stopping it.

This also tells you where all the money you’ve earned has gone.

^{You know who you are...}

The core items to cover on the financial statement analysis are the 4 pillars of business health.

1. Revenue

2. Gross Profi

3. Net Profit

4. Cash

Projections and Budgeting

I know, there’s not much more boring than a budget. Let’s call it a Profit Plan.. Profit Plan sounds more fun!

Based on your operating expenses over the last 3, 6, or 12 months, we help determine what costs to cut. How to improve your take home profit while maintaining growth.

When we do a profit plan, it’s kinda like a nutrition plan. If you eat too many calories, you gain weight. If you eat less calories, you lose weight. If you stay on target, you maintain.

Same goes for your Operating Expenses. If you spend less, you profit more. If you spend more, you profit less.

A good Profit Plan is an over/under that maps toward your goals.

Cash Flow Forecasting

A business, in practical terms, is money in / money out.

Like the tide, cash flows in and it cash flows out. The key is to maintain control over as much as possible.

Cash Flow Forecasts differ from Projections in one key way. The forecast accounts for what may happen that hasn’t happened before, or recently.

For example, it’s summer and the weather has been hot and rainy. A projection will say it will continue to be hot and rainy because it has been hot and rainy.

A forecast will tell you that in 6 months it will get cold and maybe snow. (Not here in Florida, but you get the idea)

Cash Flow Forecasts make inferences about the future. Based on events like deals in the pipeline. Or external forces, like interest rates, market trends, political climate, and new laws.

Every entrepreneur wants ONE thing.

To know what will happen next.

Will I succeed?

Will I be able to sell?

Will I reach my goals?

Will I stay in business?

Will it be hard or easy?

The Cash Flow Forecast isn’t a crystal ball, but it’s the next best thing!

Goal Setting and Executive Decision Making

The last and most important of the CORE peoplework services.

We focus on SMART Goals setting.

A SMART goal is one that is Specific, Measurable, Achievable, Relevant, and Time-Bound.

SMART Goals are Dreams with actions and a timeline.

As accountants, it’s important to not always wear the accountant hat. We own our own businesses too, it’s important to meet our clients CEO to CEO.

We know this self-employment thing is lonely. One of the greatest services we can provide is a good old fashioned Peer to Peer conversation.

When problems arise, we should help our clients weigh all options. Help them make the hard decisions needed to drive meaningful impact.

Business owners deserve that from their advisors.

Business owners,

It’s important to have a great bookkeeper, accountant, and tax preparer.

Don't pass up an Advisory Accountant.

We will help you predict the future. Buy your dream home - or second one. Send your kids to college. Go to Europe twice a year. Build a new wing for your church. Or what ever it is that moves you.

An advisory accountant should easily be worth 10-20% of the value of your dream. Investment in yourself, invest in your future.

Accountants,

AI is coming for the tedious compliance work.

If you think bookkeeping and tax prep will be the core revenue drivers for your firm in 10 years, you’re in for a rough road.

One thing AI can’t do is create a human to human relationship. AI will have a hard time doing the peoplework!

Offer your clients Financial Statement Analysis, Profit Planning, Cash Flow Forecasting, and Goal Setting.

Some additional Advisory Services: Tax Planning, Business Valuation, Fund Raising, Go-to-Market, Pricing, Return on Ad Spend analysis, Revenue KPI tracking.

Charge 10-20% of the value you expect to help them achieve.

For all things peoplework, offering it to clients or getting the support you need, Profit and Grow has a plan for you.

Thanks for reading the 10th issue of the Profit Hacking Weekly newsletter. Past issues will be located on the blog section of profitandgrow.com.

If you need help with anything I talk about, like maximizing your profit, minimizing your taxes, understanding your cash flow, or making the best spending decisions, connect with me on LinkedIn https://www.linkedin.com/in/danielt6/

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By: Daniel Talbott