September 29, 2022

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Art of Accounting: How I became a mink coat industry expert

Early on in my career as a junior accountant, I would show up at a client in the morning, write up the books and leave at the end of the day with a draft of a financial statement. I was a kid. My mother had a mink stole that her sister-in-law gave her when my aunt bought a full mink coat. To my mother, it was a big deal. To me, it meant nothing. I was a kid not interested in what my mother wore.

Write-ups were where I would write up the cash receipts and disbursements books, a sales journal, perform the bank reconciliation, post everything to the general ledger, take off a trial balance, make some recurring journal entries and prepare a financial statement. I also prepared the payroll and sales tax returns, kept the accounts receivable ledger, and wrote out and mailed statements to customers. It was a lot of work, but I got it all done in a day. When I started doing this, it seemed like an impossible job, but it easily settled into a comfortable routine. As the months flew by I had time to think about the business, its controls, how the client made money, how the banks and factors interacted with the client and some of the industry nuances. Looking back, write-ups were probably the best training and education I could have gotten.

My boss had a varied clientele, but five of the clients I worked on were mink coat manufacturers. After a few months and as I became a familiar face, the clients would drift toward me and would share thoughts about their business. Occasionally they would ask how others were doing, without prying for specific or confidential information. They were just interested in trends I noticed. When this started I mostly listened, nodded once in a while and soaked up what they told me. At some point, based on what I heard, there was a transition to where I could offer some observations about industry leanings, rising imports and the influx of new participants in the pretty close-knit industry that resided within a few blocks on the southern edge of New York City’s garment center.

It got to the point where the clients eagerly welcomed me and hung around a little more, even sharing personal and business problems. Without my trying, they looked at me as a resource for them. Not as their accountant, since that was who my boss was, but as someone with my ear to the ground who might provide a glimpse of what was happening outside their doors since they were barricaded inside their shops working nonstop to fill their orders.

This was great for my ego, but I also realized I was a kid. I had to keep client information confidential and still needed to get my work done by the end of the day. However I also realized that these “clients” were people with doubts and insecurities. While to me they might have seemed rich, some were barely holding on. The tidbits I provided were viewed as significant by them and showed me that industry information was valuable, any industry information.

Whenever that realization was, it became my Aha! moment. From that point on I looked for bits of info I could pass on. I also looked for other things I could find out to pass on. Keep in mind that I was still a kid and did not really know what to look for, but I kept my eyes and ears open and tried to focus on what was going on around me, in the office or factory or wherever I happened to be sitting. Even today, I still look for aberrations or things that do not seem in order, or controls or processes that do not make sense or could be better.

Many of our clients pay us for the deliverables they must have, but they retain us because of the unspecified extras we give to them. That is called advisory services but is not exactly what the larger firms are providing or the accounting industry consultants are touting. I am part of a large firm and see what they are doing. Some of it is really cool and outside the realm of what is considered typical accounting services. Withum’s advisory services, like those of other large firms, are not necessarily what can be offered by small firms unless they have a specific expertise in a niche. But small accounting firms can provide the type of advisory services (such as what I did early on and still do) that are essential to their clients, and that is what they should concentrate on.

With today’s fixed pricing and subscription models, it is not necessary to keep your eyes on the clock or posture yourself to justify how time is used. I feel there is room to digress from the agreed-upon deliverables and wander into the advisory or consulting services they need. Wander in this case means looking for opportunities to add value to the client. If the situation passes beyond an exploratory or beginning stage, then a separate engagement can be proposed. The continuous assistance and add-ons will not be specifically billable but will add to the value of the relationship and will be reflected in growing fees, stronger client collaboration and a true trusted advisor positioning.

My career has been fantastic, with many satisfying moments providing help and guidance to clients. I know that some of my most successful endeavors were not billable, but at the end of each year my income ended up greater than the previous year with a growing practice, happy clients, excited staff and days filled with enjoyment for me. And to think, it all started for me with mink coats.

If you want my checklist of 77 high-value, low-effort services you can do for your clients, email me at [email protected] and just write 77 in the subject line. No need for messages.

Do not hesitate to contact me at [email protected] with your practice management questions or about engagements you might not be able to perform.


https://www.accountingtoday.com/opinion/art-of-accounting-how-i-became-a-mink-coat-industry-expert