In this episode of Advisory Conversations, Tim Seymour and Deb Halliday explore one of the biggest misconceptions in advisory.

Management accounts are not advisory.

Neither are KPI dashboards, spreadsheets, or beautifully designed reports.

Because if a client doesn't understand what they're looking at or know what action to take next, the report itself has very little value.

For many accountants and bookkeepers, producing management accounts has traditionally been seen as the end of the process. The reports are prepared, sent to the client, and the job is considered complete.

But true advisory starts where the reports finish.

The real value comes from helping clients understand what the numbers are telling them, why they matter, and what decisions they should make next.

Throughout this episode, we discuss the difference between delivering information and creating understanding. We explore how better conversations around the numbers lead to better decisions, stronger businesses, and deeper client relationships.

We also look at the role of education in advisory. Business owners don't need more reports. They need clarity, confidence, and context.

Whether you're reviewing profitability, cashflow, margins, or growth plans, your role as an advisor is not simply to present the numbers. It's to translate them into meaningful actions that move the business forward.

Because advisory isn't about producing reports.

It's about creating better decisions.

In this episode you'll learn:

• Why management accounts alone do not create advisory value.

• The difference between reporting information and creating understanding.

• How to turn financial data into meaningful conversations.

• Why client education sits at the heart of great advisory.

• How regular conversations create stronger client relationships and better outcomes.

• Why the future of advisory lies in interpretation, leadership, and action rather than reporting alone.

If you've ever wondered why clients aren't excited by the reports you produce, this episode may change the way you think about management accounts forever.

Welcome to Advisory Conversations with Tim Seymour and Deb Halliday.

This podcast is for accounting professionals and financial coaches who are ready to step beyond compliance and into advisory.

Because real advisory isn't about doing more yourself.

It's about building something that works without you being the bottleneck.

Hello, and welcome to another episode of Advisory Conversations.

With me again, as always, is my partner, Deb.

How are you, Deb?

I'm really good.

How are you, Tim?

I'm good, I'm good.

I'm ready for another exciting conversation all about advisory.

And today we thought a great topic, because we know this from our past, running our account in a bookkeeping practice is about the difference between sending the client management accounts and maybe Fluffy all singing or dancing KPI Dashboard.

The difference between that and actually delivering high value advisory.

We thought that'd be a good topic today, didn't we, Deb?

Yeah.

Great topic.

Yeah.

So for me, I know from my past that I used to provide a monthly, surface, monthly service to clients.

And I used to think back in the early days that once I'd sent the set of management accounts over, my job was done.

That was the tick in the box.

I was comfortable charging the monthly fee that I was charging.

And I felt my job was done.

And in a way, producing the monthly management accounts almost became.

It's almost similar to another compliance task, isn't it?

If you look at it, it's a production.

It's have I produced the monthly accounts?

Yes, I have.

Tick in the box, wipe them off the jobs for the month, move on to the next client.

Here we go.

That job's done.

From the client's perspective.

That's a massive load of pants, isn't it, as a service?

Because I also know for a fact, and I learned this obviously as I went through well in the practice, I learned then by talking to clients, because what I used to do in the end was talk to all my clients and have meaningful conversations and then eventually started to deliver advisory as you know.

But through the process of starting to talk to my clients, I started to realize that actually that wasn't helping them at all.

You'd put a set of management accounts in front of them and I could be sat opposite them.

I used to have an office where people could come in and sit on the sofa.

They could sit at a table, in chairs, or they could sit on the sofa.

I used to like sit on the sofa, the coffee table, because we could sit together and review figures together and have meaningful conversation with a cup of coffee sometimes across on there.

Not Always.

And, and I knew by putting something in front of them, I could see their eyes just glaze.

And you're talking and talking and talking.

They're not listening.

They've gone, you've lost them because they've glazed over.

So I found that the, the best way to deal with this situation was actually to, yes, produce the management accounts, but produce them for me because at the end of the day, I'm the one, I'm the accountant, I'm the one that can interpret that data and actually do something with it.

So then I started looking at the patterns and I started thinking, okay, something's changed here.

These, these profit margins are changing.

Why are they going down?

What's happened here?

You know, cost of sales seems to be increasing and sales seems to be staying the same.

So what's happening?

What's causing this?

And so then I would start to investigate that.

Then when the client was with me, I could ask him, so, cost of sales, who do you know who's supplying all of this, you know, all of these materials that you're needing for your building work?

Let's just, let's just say, you know, you know what, why, why are these costs increasing but your sales are staying the same?

And then it would come to light that the cost had increased.

They'd have to change supplier or, you know, something could happen.

It caused the cost of concrete to increase, but, but the pricing has stayed the same.

And you kind of think, well, they wouldn't know that from looking at the management accounts.

But when you start to talk to them, yes, they are aware that the costs have increased, but they're not really, they don't really understand how that affects their business.

And actually it means they need to either consider a different supplier or they need to consider increasing their prices.

And so the next contract they quit for, they need to take into account the actual increased costs as opposed to costs they probably had in mind before.

But by sending a set of management accounts, you can articulate that information across to them.

And in fact, it's impossible.

There's going to be the very rare business owner that will understand the finances and to be able to get a take on that, the majority will not.

And so for me, management accounts, even a fluffy KPI dashboard, don't really benefit the client.

They make it look, they make us feel good that we're producing a lovely report and everything balances and the KPIs look great.

Some nice graphs on there, you know, because everyone likes a graph.

How many people outside of the finance world understand Graphs, you know, most people have done graphs in maths at school how many years ago, you know, to understand what they're looking at.

And we think because it's visual, it's going to be easy.

But that doesn't necessarily help either.

Not all the time.

Unless you're going to help them understand it and interpret the data that you're putting in front of them, it's meaningless.

So for me, yeah, having your client come in, sitting next to them in person for me is always the best and it always was the best.

But of course now over zoom is just as good as.

Because we can have those conversations.

You can look them in the eye and you can see whether they're taken on board the information you're giving them and whether they're understanding the guidance that you're suggesting they may take to move forward after the end of the session.

Does that kind of all make sense to you, Deb, how I've said that?

Yeah, completely.

And yeah, it takes me back actually, because you're right.

I mean, management accounts is really a nice upsell, isn't it, for accountants and bookkeepers.

And it was kind of like the top tier, wasn't it?

It was always included in the top packages, the management accounts, because it's relatively easy for us to do on software to check.

We used to do three levels.

So we used to do the base at the lower level was just received the report on a monthly basis.

Then we used to do receive a report and a loom video with a short explanation of what they're looking at.

And then we used to do the, the half an hour meeting to go through it in person.

So they, if they've got any questions, they can ask questions.

But that quickly evolved because I could see that they were just glazing over or they hadn't been opened.

And I thought, well, either you're in danger of losing that upsell, which nobody wants to do.

Nobody wants to reduce their prices and stop a service.

But the bigger question is why are they not opening these reports or why, why they're not using the information?

So in conversations we just realized they were glazing over.

Yeah, sometimes the client, you put a spreadsheet in front of them and they glaze over and sometimes a client will say, oh, you'll be really proud of me.

Look at this spreadsheet I've created.

And they've spent all their time creating a spreadsheet when we actually, well, yeah, we could have looked at that, that in a report, you know, on zero.

But they're super proud of themselves for doing the spreadsheet.

So you let them get on with it because they obviously like spreadsheets, but that's, I'd say, in the minority of business owners.

So we transitioned our service offering to include kind of education about the management reports.

So we still based it on the management reports because that's where the data is, that's where it shows us, doesn't it?

Where patterns are.

And we can look at the insights and then give suggestions.

But there's a big difference from thinking like that about management reports to just giving the management reports and reporting the numbers.

That is the difference to me between reporting and advising.

It's that looking at the insights and then giving the suggestions of how they can bring up to best practice and use the numbers to help the business move forward or become more successful.

So yeah, so yeah, it really resonated with me.

So do you want me to tell you how we transitioned it, Tim?

Yes, please.

That was going to be my question, so you might as well go ahead.

Okay.

So we transitioned just sending the reports.

When we were upselling the management accounting service, I looked at all the features that were on and we were using Fathom at the time and I looked at all the features and there were 12.

And so I started building, going back to my training days, starting started building a coaching program to each module.

Each monthly meeting would be on a particular feature of the management report.

So and it would, they'd be able to choose which one they they had that we addressed each month.

Because I on the program.

So I had like a, I might have mentioned this before in other podcasts we had, instead of having gold silver bronze packages, we had a solo starter package.

And then we had a growing program and the idea was to take clients from one place and progress them.

Like a training program.

With a training program, we look at where you are, what skill sets you've already got.

And then you might go in at proficiency expert or master, but you basically follow a process.

And that's how I built my packages.

So the growing program included 12 modules that were based on the features of the management reports, but the client would be able to choose which one.

So for instance, if they didn't have a clue what breakeven point is and they were running away with their costs or they needed to improve their margins, we, we would teach them in one of the coaching programs what the break even point was and where to find it within the management reports.

Another one might be if they were thinking of taking on a new vehicle or A new team member, we might go straight to scenario planning and show them that within this reporting we can do.

And we would do hypothetical scenario planning within that particular feature.

And as I say, there were 12 of them.

And it was, it was taken up far more rapidly than just offering them management reports because they thought it was great that they were going to learn and written all the descriptions in layman terms.

So there was nothing that said gross margin or net profit.

It was all in layman terms and a very brief paragraph for each of these things that they were going to learn.

And that's how we got them on our, our coaching program.

That was my very first standardized coaching program that I taught to the team and so that everybody could jump on a call with the client within our advisory team because they knew, well, we're going to be going through break even point or we're going to go through margins or we're going to go through scenario planning or whatever else the client had chosen.

Um, so that, that's, that's how we transitioned really from having this fantastic reporting software that was desirable as an upsell from our business point of view because it doesn't take, it takes seconds to produce it within fathom and it's all singing, dancing, it looks wonderful.

But we didn't have any drop off because it was.

The clients were enjoying learning more and more about their own business numbers and how it related to them.

And not only that, when they got the management report, because they've been taught and now understood certain features, they would open the report when they got it.

So they would open the report when they got it and they would look at the numbers and they would feel good that they started understanding it and how it was related.

And then you get much, much better questions.

And that's how they start to learn to make their own decisions because they're giving the data on a monthly basis and they're being taught what they're, what all the features mean and how it relates to them.

So that's, that's what we did.

Yeah.

And I would, if I was to run a practice again, I would do exactly the same way because it was so successful.

Yeah, yeah, yeah.

It's interesting, isn't it?

So, so providing that education around what they're being presented with enables them to start to understand and then be able to make some informed decisions later on down the line.

But, but they would also have contact, I guess with your team if they needed to.

Would they have that?

Yeah.

So they would be able to ask questions as well.

Wouldn't they?

There's no assumption that they should know what it is, so they don't feel stupid for not knowing.

Especially business owners that maybe been running their own business for a number of years and they, I mean, there's that classic clip from Richard Branson, isn't it?

Yeah.

He'd been running, he got to 50 years old and he, he didn't know the difference between net profit and gross profit.

And he was called out of the meeting by his accountant, wasn't he, finance person.

And they told him, well, same goes for, you know, any business owner.

The assumption that they should know and they don't know, they, they can feel a bit silly, you know.

Yeah.

So, yeah, but if you, if you go into the meeting or into the upsell, if you like, with no judgment of whether they know or understand and the expectation that they don't, and when they say that they do understand something and you're surprised and you congratulate them, they feel great.

So, yeah, there's a knack and there's a way to do it, but I think just sending reports, management reports to a business owner and assuming that they'll understand it and that they'll find it valuable is.

It just doesn't sit right with me really.

I think too often it's just an upsell from the accountancy practice point of view.

They think, oh, great, we've got another few hundred quid or added to the bill just for using Fathom.

You know, it's not good service.

No, it's not value added, is it?

No, it's like I said, that is how I felt at the beginning.

I realized it was just a tick in the box and I did it for a while and I thought, no, this isn't, it's not adding value to the client.

So it didn't sit right with me.

I felt uncomfortable.

So that's why I started to do something about it.

And you know, the Richard Branson situation is really interesting because he's so highly successful.

But it also goes to show he would have made all of his decisions based on what was in the bank at the time.

So it's bank balance based decisions, isn't it?

And if you can't understand the set of accounts, that's what else are you going to measure yourself by?

You're going to measure yourself by the money that's in the bank.

So, so you'll make decisions even though that money might be actually there for your tax bill, for your VAT bill and for all these other things that you need to pay and your, your staff, you're still going to make these decisions.

And it's obviously it worked for him.

So we can't criticize.

But who are we to criticize Richard Branson?

We're not at all.

But, but for other businesses it's actually dangerous to make decisions on what the bank account tells you because that's only a snapshot at a moment in time and it doesn't show you what's going to happen over the next two or three weeks where the money might be disappearing quite quickly and suddenly you've made a decision that you can't then follow up with because it was a misinformed decision.

Which is why of course accounts as a bookkeeper produced these accounts and these reports.

But it's then delivering the value with the reports so that the clients can understand.

And I totally get the fact that the clients need to be paying for this certain levels of service and some might be report only so that's all they're paying for.

That's what they're going to get.

I'm not, I'm not criticizing that scenario at all and I'm not dismissing the reports and the KPI dashboards either.

The point that we're making is to us, the scenario I, I, I created at the beginning of the call about the, the builder with the, the cost of concrete increase and, and us seeing his cost of sales going up but his sales staying the same.

That's obvious to us.

Anyone listening to this?

That's obvious to a customer, a business owner.

That's non financial.

That's not obvious at all.

They wouldn't necessarily see that, they wouldn't necessarily understand that that's what that report's telling them.

And so it's so important for us to be able to provide meaningful information from the reports that we produce.

And I think that's the clever bit, that's the bit that sits in between that you created Deb, with your, with your loom videos, with your education going out to them so they can learn how to interpret the data, how they interpret what they're seeing.

And then obviously when you're then working, when you've gone through that level and then some of the clients then want to work with you closer and they've moved up to the next level, they're paying more money or having strategy sessions with them, obviously you take it to a whole new level.

But it, but it's, yeah, it's just an interesting concept.

I know we've talked about management reporting before management accounts and we've kind of said similar things in the past but it's very relevant because I still hear people talking about this great report that you can produce and doesn't it look wonderful and look at all these graphs and stuff.

And I sit back and I think is that helping the client and our clients outcomes should be forefront with our mind all the time.

Because if we can help our clients achieve their outcomes, then they are always going to be with us as a service provider.

They're always going to want to be with us.

Whether that's us being seen as the trusted advisor or our team.

Hopefully it's the team because that's what we, what we stand for is moving from being the bottleneck of the trust advisor to your team delivering all of the advisory.

But obviously for some people this might be a starting point and it might be that they have to initially take that on themselves and that's okay because you have to start somewhere and if it's you delivering then you know, just have a think about how you can deliver that that creates a meaningful outcome for your clients.

Then they're going to want to be with your firm forever.

And that then is creating a long term sustainable business.

And you know, if you, if you then calculate the amount of money they've paid you over a period of time, suddenly it's a lot more of a lucrative customer than what you think as well.

You know, it's another angle to look at the long term clients, the amount of money they've paid you over a long time that deserves something back in return.

And that return on investment to them surely has to be starting to achieve the outcomes of why they set up business in the first place.

So that, that's, that's how I feel about it.

I am a bit passionate about it actually.

It kind of comes out when I say it like that because I saw the light myself.

Unfortunately for myself, I saw the light, I found a different way of doing things and I was able to, to help my clients move forward.

And then I sold my accounting practice and then I help some more business owners move forward before as you know, helping accounts in the bookkeeping practice owners move forward with their businesses as well because at the end of the day they are still business owners as well as being accountants and bookkeepers.

So I do feel passionate about it, about how we look at the numbers in our business, how we look at numbers in our clients business and how we can help them make sense of it.

And as you did Deb and I know you were very good at this when you Know with the accounts leaders in your team training your clients up so that they could make their own informed decisions on their numbers.

Because at the end of the day that's the ultimate objective, isn't it?

Yeah, yeah, that's gotta be the objective.

And it kind of ties back to what we've talked about previously with the 80% of businesses are just breaking even or about to go bust.

If we can help clients move into the 15% which are doing great, that that comes from them making their own decisions and learning how to use their numbers to make those better decisions for their business.

So and also it goes back to the evolution of the business owner and the accountant journey that we've spoken about before.

Because it's the clients that's a startup and just want the tax returns being completed and look for the lowest price, then the frustration sets in and they want more support.

Well, surely that more support is the next level up that we want to be helping them because we keep them then right up until they take it in house, if they ever do.

And that's got to start with the education of understanding the data that comes from management reports to be able to make their own decisions and to become more and more self fulfilling and successful really because you don't want them always to be reliant on you to answer questions to make for them to be able to make decisions or your team.

The ultimate purpose really should be for them to look at, to be able to have the data to hand and make their own decisions.

Yeah, yeah, definitely.

I think it's really important, but yeah, brilliant.

Thanks Deb.

So again, you know, we have these conversations a lot, we have these on our podcasts here.

If you want to find out more information about us and what we do and the other things that we offer through our, through our training company, APX Training, head to the website apxtraining.co.uk you'll be able to get access to our book that we co wrote called Advisory Teams.

You can download that on a free PDF or you can even go and watch.

Sorry, you can go and listen to the audiobook.

I'm not sure how you watch an audiobook, but you can listen to the audiobook as well, which has been live now for a few weeks.

So you've got access to that.

It gives you a few ideas about what we're about, what we're doing and the problems we're looking to solve within the accounting industry and if future of the accounting industry and if you want to come along and just join us on some of our calls and our free sessions that we offer.

We run free sessions every Tuesday at 9 o' clock in the morning, UK time.

You just have to head to Facebook, look for advisory teams.

You'll see us answer a couple of questions.

We'll let you in the group and you'll get the links.

Then to join us on our croissants and coffee sessions Every Tuesday at 9 o'.

Clock.

We look forward to seeing them there, won't we, Deb?

We do, yeah.

Okay, excellent.

Thanks for joining me again, Deb.

And we'll see you all very soon.

Thanks for listening to advisory conversations with Tim Seymour and Deb Halliday.

If you found this useful, make sure you're subscribed so you don't miss the next episode.

We'll see you next time.

Sam.