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Accountant conducting client business health assessment
Accountants

How to conduct a business health assessment for your clients as an accountant

This article has been reviewed by Clive Hand


It’s that time of year again! Time to focus on health and fitness. But, I’m not talking treadmills and cleanses – I’m talking good, clean data and financial goal setting with your business clients.

It’s January, and personal trainers are crazy busy helping millions of adults achieve healthier selves. What a great time it is for accountants and bookkeepers to set health targets with clients!

1. Determine business targets:

  • Financial terminology can be off-putting. Start by taking the time to listen to clients discuss their businesses. Ask questions such as “What do you want to achieve this year?,” “Why is that important to you?” and “How will you know you have achieved your goal?” Listen to the language your client uses and frame goals using the words you hear. If you hear “I’m always running out of money,” consider setting a “money in/money out” goal instead of a “cash flow management” strategy. You can show your clients that you are listening and make the goals feel more familiar and achievable.
  • Complement their goals with ones they have missed. Clients may only focus on part of the picture. If they are excited about sales growth, consider encouraging them to add gross margin or net margin to the list of goals.

2. Ensure your data is accurate

Garbage in/garbage out is a killer when it comes to financial tracking. As the accountant, part of your job is to ensure the data is solid and timely. Key components of a workflow that supports strong reporting are:

  • Client/Accountant Document Sharing with Optical Character Recognition (OCR) – Apps that allow for the quick conversion of paper items, such as vendor bills and receipts, into classified electronic transactions are of real value here. You can do this with QuickBooks when you integrate apps with your accounting software.
  • Online Accounts Payable – Eliminate wondering why your client wrote a check to Amy’s Bird Sanctuary by using an app. QuickBooks allows you to categorize expenses to offer better visibility of the client's entire accounts payable.
  • Accounts Receivable Management – The other half of the cash management strategy is enabling clients to convert invoices into cash at a reasonable rate. Apps such as QuickBooks offer automated client reminders to improve conversion rates.
  • Inventory Management – Getting a satisfactory ‘cost of goods sold’ number can feel like seeking the grail. Often, clients prefer to book purchased inventory as cost of goods sold, instead of using a true inventory software program. Your client will find inventory management a breeze with QuickBooks Inventory Management software.
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3. Generate financial reports

After you set the target and gather the data in a deliberate, accurate and consistent way, it is time to check if the company is on track. QuickBooks® Online offers a great selection of reports from a basic profit and loss to more detailed item-based reports.

Don’t forget, the client still needs YOU to truly connect with the numbers. Justin Hatch from Startegy explains, “There can be a huge disconnect between what a financial report is saying and what the business owner is understanding. Be sure to select a financial reporting application that enhances the conversation between the bookkeeper and client. Establish a common language.”

Being a bookkeeper is a funny thing. Folks hire you to enter transactions, reconcile accounts and hand off the file for tax prep. But, as bookkeepers and accountants, your true value comes from the understanding we create between owners and their businesses. You are bridge builders and translators. You can map out and guide your clients towards the achievement of their aspirations.

Grow your accounting practice with QuickBooks Online Accountant, a cloud-based accounting solution for with features for accountants to manage clients and their practice. Sign up to use QuickBooks Online Accountant for your accounting practice for free.

This article originally appeared on the Firm of the Future site by Beth Melcher.