From Traditional Accountant to Management Consultant

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%


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


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

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Perfo

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easures

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# 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)


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)


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

Contact details

Email: [email protected]

Ph. (03) 5121 3187

THANK YOU for your time today … any questions?Start making a difference!