from traditional accountant to management consultant
DESCRIPTION
TRANSCRIPT
From Traditional Accountant to Management Consultant
Presented by
Marc R Bruce, CEO
True North Group Sdn Bhd
AgendaAgenda• Some background … perspective
• Global trends in the accounting profession
• The Accountant of the Future … defined
• Creating a Business Consulting firm
• Strategic Planning
• Case Study
• Question time
a time to reflect ...a time to reflect ...
It’s about expanding your skills…
It’s about creating new career opportunities …
It’s about adding value to your existing role …
It’s about helping other people …
It’s about you.
Hollywood movies are threatening to turn accounting into a 2nd class profession according to an academic study. (Uni of Sth Australia)
Modern accountants are portrayed as “dowdy”, nerdish, anti-social and incompetent.
The lawyer as hero is common place: LA Law, Ally McBeal, The Practice …
For accountants, we have (bar propping) Norm Peterson from Cheers and Ernie Niles in Twin Peaks: “I can’t do that, I’m a coward, I’m a CPA”
If these perceptions are not changed there is a danger the best and brightest students will join other professions, they say.
The authors argue the profession must try to change public perceptions.
But, without action, there will be no heroes and accounting runs the risk of becoming regarded as a second class profession, they conclude.
Sunday Telegraph - Sydney
The bean counters fight backThe bean counters fight back
Video 1
Video 2
Video 3
from traditional accountant …
for accountants’ in business & industry …
According to a Global Best Practices Survey, the majority of finance executives still spend most of their time directing and coordinating general accounting transactions, initiating and maintaining internal controls, preparing management reports and managing accounting employees
Despite compliance pressures (preparing statutory accounts) the principal role of the CFO remains improving organisational strategic and commercial performance.
… and in the profession …
a UK Study commissioned for a Business School as to why clients leave their auditor/accountant:
• Reason # 1 - Not having a real understanding of the Client’s
business – what makes the business tick?
• Reason # 2 – Availability … returning phone calls and handling
urgent matters
• Reason # 6 – (and the bottom on the list!!) Price
Has the balance tilted too far?Has the balance tilted too far?
The
Accountant
Compliance
Strategic
the world needs you …
A survey conducted by Price & Associates in the USA (Sept. 2000) found that less than 10% of High Net Worth Individuals and Small Business owners currently obtain financial products and other services from their accountants, however, the majority would turn to their accountant for these services, if they couldThe survey also found that clients who sourced such services from their accountants, were highly satisfiedGlobally, over 2,265 new businesses are started every day! They need help
Globally, Dun & Bradstreet estimate that 82% of businesses go under by their 10th anniversary, and over 95% of products fail. Every time a new venture starts, nearly 4 fail
A study conducted by Ohio University of 356 companies over 19 years found that 50% of all business decisions failed. Nearly 2/3 of executives never explore alternatives prior to making a decision, instead using manipulation, persuasion and heavy handedness. Only 7% considered long-term priorities or conferred with colleagues
Astonishingly, 91% of business people have confidence in their ability to make decisions
A NY University study found that over 65% of M & A’s have been failures resulting in negative shareholder value
the world needs you …
AICPA Vision Project (www.cpavision.org)
Around 3,400 CPA members devoted 21,456 hours to identify both challenges and opportunities for the Profession in 2011
Core Purpose (the accountant’s reason for being)
… making sense of a changing and complex world
Vision Statement
CPA’s are the trusted professionals who enable people and organisations to shape their future. Combining insight with integrity, CPA’s deliver value by:
• Communicating with clarity and objectivity• Translating complex information into critical
knowledge• Anticipating and creating opportunities; and• Designing pathways that transform vision into reality
Core Services
Assurance – services that provide quality information for decision making
Technology – improve decision making and knowledge management
Management Consulting – advice and insight on the financial and non-financial
performance of an organisation – operationally and strategically
Financial Planning – wealth management & planning
International Services – in response to globalisation
Growth by Segment Past
Decade
Accounting & Audit 2%Taxation 6%Financial Services 38%Business Improvement 27%
Next Decade
0%
-2%
30%
30%
from traditional accountant …
the accountant of the future …
Today, CFO’s are superb managers who, on top of strong financial and deal-making skills, boast a grasp of operations and a keen sense of strategy
Instead of simply measuring value, today’s CFO’s create it
The CFO must be a ‘navigator’ of the business, not just a custodian. They must help the CEO anticipate the icebergs ahead
The scope of work can be broad and includes determining strategy and business plans, reducing costs, negotiating sales contracts and approving human resources policies
from traditional accountant …
What is Business Consulting?What is Business Consulting?
Helping business owners grow and manage their businesses more effectively, while improving quality of life.
Making a difference for your Client, and all of their stakeholders.
The Malaysian MarketThe Malaysian Market• Malaysia has a population of 26 million with 17,000
qualified accountants. There are 2,000 auditors, from 1,500 firms. Relatively small numbers causing distortions
• Malaysia has 638,242 registered companies and 2,696,503 other businesses:
• 0 – 4 employees 80%• 5 – 19 employees 15%• 20 – 99 employees 4%• 100+ employees < 1%
• It’s only a matter of time before major structural change occurs in Malaysia to allow SME’s to compete
• Conclusion? The market is huge, and there is capacity for many players to deliver consulting
Organisation ChartOrganisation Chart
M ...... O ...... F .....
Board of D irectors
CEO/M D
S h a re h o ld e rsSystem
s
Systems
Plan
ning
Plan
ning
TrainingTraining
The 4 Consulting PillarsThe 4 Consulting Pillars
An
aly
sis
&
Pla
nn
ing
An
aly
sis
&
Pla
nn
ing
Sy
ste
ms
&
BP
MS
ys
tem
s &
B
PM
Perfo
rman
ce M
easures
Perfo
rman
ce M
easures
Ma
rke
ting
e
-Co
mm
erce
Ma
rke
ting
e
-Co
mm
erce
# 1 # 2 # 3 # 4# 4
Consulting services offered … some examples
First step … Strategic Planning
Then implementation of the Plan, such as:
Sharing the vision and culture with senior management … finding “north” for the business
Interview of employees for their input
Survey customers & clients
Create a Marketing Plan
Designing performance incentives and remuneration policies for managers and sales staff
Develop the Organisation Chart … roles and responsibilities. Teach management how to “manage”
Designing and creating operational systems
Improve financial management reporting & procedures
Leverage EffectLeverage Effect on Profitability on Profitabilityat the Client Level at the Client Level
Type of Service Gross Revenue Net Profit
Compliance - audit $ 4,000
Business
Consulting
Financial Services
IT Consulting
Total
20,000
3,000
3,000
$ 30,000
7,000
1,000
500
$ 10,000
$1,500
The Focus PartnershipBusiness Development Advisors
Providing tailored strategies,
systems and training designed
to unlock the true potential
of your business.
EasitaxTax Advisors to PAYE individuals
Providing PAYE individuals with
access to competent taxation
and financial advice.
Ascent Financial StrategiesFinancial Planners & Advisors
Strategies for creating and increasing
wealth, to provide peace of mind
and quality of life.
The Bruce PartnershipChartered Accountants
A proactive and unique firm,
focused on developing close
relationships to meet business
and personal objectives.
Practical Tips to Getting StartedPractical Tips to Getting Started • “Begin with the end in mind”. Clearly define your
career direction. Prepare a personal plan and set some goals. Aim to achieve balance
• Decide on the skills, tools and resources required e.g. marketing, strategic planning, KPI’s, leadership, HRM, an MBA course, software
• Select the type of consulting work you’ll perform• Target the size of business, and industry • Learn to sell. There are many consultants who
cannot find work. Its about generating leads and converting those leads to work
Lead Generation StrategiesLead Generation Strategies
• Referrals
• Strategic Alliances
• Networking
• Seminars
• Direct Marketing (Mail/Phone/Fax)
from traditional accountant …
The Strategic Planning The Strategic Planning ProcessProcess
WHERENOW
HOW
Components of a Strategic PlanComponents of a Strategic Plan• Analysis, benchmarking
• Vision, Values, Purpose, Mission
• Corporate goals & objectives
• SWOT
• Competitive advantage
• Client/Customer selection
• Strategy Development• Marketing strategies
• Operational strategies
• Human resources
• Finance
• Innovation and continuous improvement
• Key performance indicators (KPI’s)
from traditional accountant …
Malaysian Steel FabricationMalaysian Steel Fabrication& Furniture business& Furniture business
• Father and eldest daughter attended one of our seminar’s at the PJ Hilton
• Revenue was >RM12m, but had dropped nearly by 30%. Over 100+ staff and contractors
• Chinese family business started by father in 1960, now run by the father and the 4 children – model not working
• Mfg located in Johor, with sales offices in KL and JB• Family under extreme financial pressure and being torn apart.
One son had decided to set up a business of his own “on the side”. Father suicidal. Pathetic communication
• Sales decreasing, margins shrinking, quality control problems, bad debts, excessive stock on hand, intense competition, high staff turnover, high gearing, trading losses for 3 years verging on bankruptcy
• Succession planning not working … father’s poor health
Background
Malaysian Steel FabricationMalaysian Steel Fabrication& Furniture business& Furniture business
• Created a Strategic Plan which took 3 months to develop – round table discussions with all directors/family members
• Immediately implemented cashflow improvement strategies … credit control, stock management, increased bank funding
• Designed new Organisation Chart … roles and responsibilities. Appointed MD and explained functions. Shifted from “family” model to “corporate” model
• Set revenue targets by division, and appointed Divisional Heads with clear responsibilities. BHAG RM20m in 2006! Double sales
• Developed a sales and marketing plan to achieve revenue targets. First 2 months of Plan is working, and on track.
• Introduced regular Board meetings - communication• Improved financial management and reporting … developed KPI’s• Father agreed to stop interfering, and let his children/directors do
their job
Results
THANK YOU for your time today … any questions?Start making a difference!