There are two types of accountants—those who do their work with blinders and those with wide-open eyes. Both can do competent jobs for their clients, but the ones with the wide-open eyes grow and can do far better work for their clients.
I like to think I am in the wide-open category. I thought about this recently because I was talking to a few accountants who really did not get it.
Accountants are in an enviable position. We get to see the inner workings of a wide variety of organizations— not just businesses, but also not-for-profits and some governmental units. Each encounter is a learning opportunity for us, and I have always tried to recognize this and grab what it had to offer. I tell young accountants to be selfish and look to learn as much as they can about how businesses function and what makes them work. Here I want to discuss the barometers they are for us.
An example is manufacturing clients. They have a wealth of information, such as the costs of raw materials, including commodities like steel, oil, precious and semi-precious metals, chemicals, wheat, coffee and sugar, which are products that act as barometers. Depending upon the use, these clients are very sensitive to changing prices. Rising prices portend inflation and possibly scarcity and reduced profits while declining prices can present opportunities, the potential for increased profits, overloaded inventory or a weakening economy. What happens at one client can be related to the others, with trends examined, actions questioned, comparisons made, information expanded upon, and macro business consensuses that can be developed by you. Communicating your opinions makes you a thought leader eliciting more information that you can factor into your recitations.
Media clients provide a pulse of expectations of future business and consumer spending and the pressures placed on supply by special events such as the Olympics and presidential elections. Retailers teach price elasticity and consumer demand. Importers and exporters give indications of worldwide business activity and currency fluctuations. Scrap metal brokers are great in helping predict future business activity depending on the ease or difficulty of buying material and rising or falling commodity prices. Hotel occupancy and room rates provide insights into travel. Restaurants give great glimpses into personal spending. Construction contractors tell you everything. I’ve had dairy farmer clients that provide an infinite understanding of feed costs; milk, dairy and meat prices; transportation costs and real estate values. Realtors, insurance agents, distributors, truckers, car dealers, car and limo services, undertakers, carpenters, plumbers and electricians, printers and publishers and every other type of business clients have. Physicians and health care providers give insights into a sector that is now over one-sixth of the U.S. economy. Not-for-profits and churches also add to your wealth of knowledge.
Every client is an opportunity to learn and grow. They provide excitement and insights and serve as a barometer of business activity. Observing, focusing on changes, asking questions and listening will make you a thought leader. Lose the blinders.
Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition.” Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 964-9329 or firstname.lastname@example.org.