Ever been sucker-punched by a problem you didn't even know you had?
Of the many benefits of big data, analytics and benchmarking — alongside improved growth, productivity, profitability, etc. — is one that doesn't get mentioned very often: unexpected insights.
These insights could be reveal a strength or opportunity, but it's generally the ones that reveal a weakness or threat that matter most.
This came up recently as we were piloting our Practice Management, Analysis & Benchmarking Tool for an East Coast accounting firm. They took a few minutes to upload some client trial balances. We mapped them to our database and then did a Go-to-Meeting to review the results at the firm, practice and individual client level.
All the clients they'd selected for their pilot showed at least one key performance metric where they were under-performing by a substantial margin.
"I had no idea," said one of the partners.
While it's not traditionally your job as a CPA to grade or assess client performance, there's probably both a need and an opportunity to do more of that thanks to the fact that most companies are moving so quickly, they don't have time to stop, step back and really look at their performance.
(Plus, it's now easier than ever to get the comparative data you'd need to do that kind of assessment.)
Fortunately for the firm we're talking about here, the next step was to schedule meetings with the clients, show them what the data was saying about their performance, and then help them work through a solution.
Win-win.
The alternative?
If this firm wouldn't have analyzed their clients' performance and acted, their clients might have stumbled further and either gone out of business or been acquired on the cheap, in either case costing the firm a lot in lost billings.
Lose-lose.
Point being, sometimes the benefit of applying big data, analytics and benchmarking isn't what you know you don't know, but what you don't know you don't know.
(For more on better serving your clients, see five additional services every CPA firm should offer.)
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