An inch wide and a mile deep!
Business Advisory Services Update
The pioneer of virtual CFO Services by American Accounting Firms, Adam Hale, emphasises that accountants must have knowledge on their clients’ affairs equivalent to “an inch wide and a mile deep!”
If you have been supplying traditional accounting services for the preparation of annual accounts and income tax returns, do you have this level of knowledge about your client’s business?
What is included?
Who are the “brains trust” – (the leadership team) – you may have only dealt with the owner? What are the other managers’ duties and responsibilities?
Where are raw materials sourced from? On what terms? Are there supply difficulties?
What are the energy requirements? Will proposed government policy changes cause supply difficulties or significantly increase costs?
Are there difficulties in engaging labour for this business? Where are the team members sourced from? Are qualifications necessary?
Where are the manufactured products stored? What is the stock turn rate?
Who determines the marketing strategy? Is there a separate marketing budget? Who determines the social media strategy? Who implements it?
Who is responsible for sales?
What assets does the business own? Are any not been productively used?
Is the development of intellectual property being monitored and protected?
Is there an alertness of potential research and development incentive claims by the business?
Do new customers complete credit application forms?
Is there an awareness of the Personal Property Securities Register (PPSR)?
Who is responsible for registrations on the PPSR?
Are debtors invoices processed promptly each month?
Are the “debtors’ days outstanding” calculated promptly each month and acted upon?
How are budgets, cash flow forecasts and projected balance sheets prepared? Based on last year’s figures plus a percentage or is an in-depth analysis prepared and proper budget estimates prepared?
These are some of the factors that have to be considered if you are providing a virtual CFO service.
This is all part of a due diligence review of the internal control system – “an inch wide and a mile deep!” Are changes necessary?
We presented a webinar discussing this subject further. Click https://youtu.be/9GTuRnEsixo to watch the recording.
