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The Strategic Advisor's Monthly Planning and Review Meeting

[fa icon="calendar"] Mon, Nov 28, 2016 / by Kathy Gregory

Strategic Advisor Meeting

If you could change one thing about your business today, what would it be?
Of all the things you sell, which ones are making you money and which ones aren’t? 
Are you on track to be able to give yourself a raise next year?

Do any of those questions get your attention? Would they get the attention of your small business owner clients? These are the subjects that a well run strategic planning and review meeting covers. The strategic planning and review meeting is the final (and recurring) step in the LivePlan Method for Strategic Advisors and it demonstrates the measurable value you bring to your clients.  At LivePlan we simply call it the monthly meeting.

The role of a Strategic Advisor is to assist the small business client in establishing a financial plan for their business that represents their goals and what is possible in their industry; and then helping them stay on track with their forecast, by decoding the myriad financial data and presenting it in a way that is useful and meaningful. The monthly planning meeting is where it all comes together.

Preparing for the monthly planning meeting

In preparation for the meeting, the strategic advisor looks at trend analyses on the client’s actual results against the strategic financial forecast, and against benchmarks in the industry. The meeting takes place monthly in order to be most effective. The advisor reviews the month’s actuals against the prior month, the same month the prior year, and the forecast. The advisor then reviews the course of the whole year for any seasonality or other obvious trends.

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The important part here is the focus on major financial metrics: Key Performance Indicators. Metrics such as total revenue (and by major sales category), total gross margin (and by major sales category), net profit, total AR and AP, as well as AR and AP aging days, and cash on hand as well as cash burn.

Those top level financial metrics tell the story, and by synthesizing all the data down to those key metrics, the trend analysis becomes straightforward. The advisor looks for patterns in growth or loss compared to the financial forecast, and prepares a short list of items to review and discuss with the client.

Giving the monthly planning meeting

During the monthly meeting, the numbers are presented and questions are asked:

  • Do the numbers reflect what appears to be happening in-house? If the actuals are off-track against the forecast, the advisor explores the reasons why with the client, using the numbers as a guide to have a conversation.
  • What’s happening in the business?
  • Why is it happening?

The purpose of the meeting is to reveal answers and make adjustments, and it’s the adjustments which are the advisor’s primary deliverable (value add). The advisor must help the client weigh two types of adjustments: those to the forecast, and those to the business itself.

In order to meet the goals of the forecast, the advisor helps the client determine whether to adjust elements of the go-forward forecast, or the business operation, or both. For instance:

Is gross margin down in a particular area because revenue was projected too aggressively, because direct costs were miscalculated, or because the business is staffed incorrectly to support it?

Spending decisions can also be made at this time.

Is it time to purchase that next piece of capital equipment, or hire a new salesperson? If it’s in the forecast, and all numbers are on track, then the answer is yes! If not, it’s time to adjust the plan and target for next time.

What a relief for your client that there’s a forecast to help them through these tough decisions. No one is flying blind.

The role of a good strategic advisor cannot be understated. It’s necessary for the small business client, it’s where the accounting industry is headed, and it’s a very profitable space for the right person with the right method.

As best I can see, getting over the confusion and fear of the role seems to be the major hurdle in the industry. But the accountant is armed with the two most important things for this role: the trust of the client, and the knowledge of the data. Use them!

Kathy Gregory

Written by:
Kathy Gregory

Topics: Business Process for Advisory , Working with Clients

Content, tips and best practice for accountants, CPAs and bookkeepers who offer Strategic Advising Services to small business clients.

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