Take Decision Support To The Next Level

Edi Osborne, president of Mentor Plus, shares invaluable insight regarding how to grow your business. The Mentor Plus whitepaper, Level 5 Service, provides a roadmap to client retention and growth. In May, IPA hosted an online webinar with Mentor Plus for MPs of IPA Best of the Best firms. IPA subscribers can download the full copy of the webinar, at no cost, online this month.

The concept of decision-support information systems is not new. Since the introduction of the IBM 650 in 1954, companies have been diligently working to capture and harvest mission-critical information to better manage performance. 

Although those behemoth machines were slow and cumbersome to use, they held great promise for real-time performance measurement and reporting. After 50 years, we’re finally able to realize that promise. Advancements in information technology make it easier for even the smallest companies to level the playing field between themselves and their larger competitors. Unfortunately, many firms are not taking full advantage of the information resources available; they are not alone.

In recent years the lines have blurred between accounting and IT. Many CFOs and controllers now wear two hats: CFO and CIO. Whereas accounting used to be considered a “back office” function, today’s CPAs are at the forefront capturing, managing and reporting on a company’s performance.

CPAs have an expanded role that includes helping clients make the connection between day-to-day activities and financial outcomes. CPAs build the bridge between leading and lagging information. It makes sense that the same skills that make for a great accountant can be applied toward “accounting for” and measuring all aspects of performance, especially given the increasingly fuzzy boundaries between financial and other information sources.

The traditional role of the CPA plus their objectivity and independence puts them in the unique position of seeing the company from a very balanced, big picture and detailed perspective. So what is “Level 5 Service”?

Level 5 Service is a defined service continuum that addresses the desired Vision competencies. CPAs that deliver Level 5 Service help clients leverage information resources, develop new performance measures tied to the goals and strategy of the organization and organize those measures into a cohesive reporting system. The ideal performance reporting system has the flexibility to provide valuable decision support for owners and managers while also providing real-time line of sight feedback for all levels of employees.

Level 5 Service encompasses what we think of when we hear the term “trusted advisor” for firms who are able to live up to that moniker. It provides a tangible definition of what it means to really add value to a client’s business. It goes beyond our current perception of a traditional CPA to include the mind set, skill set, and tool set required for the next generation of CPAs to be successful. Level 5 Service outlines a step-by-step linear progression of service offerings and corresponding value for firms to adopt. It is a service approach that is helping firms attract and retain quality staff and clients.

Level 5 Service is not new. It is a philosophy that starts with the realization that CPAs can provide an accurate set of financial statements and still not help their clients gain the insight clients are seeking. From a compliance standpoint, even though the financial statements are accurate, many firms are not serving the managerial needs of the client. When clients are asked about what they look for in a CPA, the subject of GAAP or accuracy seldom comes up; these are assumed competencies.

The majority of clients say they want their CPA to help them be successful. We are not suggesting that the current model for financial statements be abandoned; however, their usefulness as a management tool is limited. The Level 5 Service approach is about augmenting financial statements with reports that provide feedback on performance at all levels of the company.