Collaborative Accounting vs Traditional Accounting
We have a history of successful collaborative accounting work with small business clients in several different industries, so it is natural for us to prefer this approach to small business accounting engagements as often as is appropriate. This post is meant to briefly describe key distinctions between traditional vs. collaborative accounting.
Defining the scope of work
A core principle of an accountant’s work is a clear understanding of the client, the industry, the work, and its cope and limitations. Protections are often built into the agreement to prevent ‘drift’.
The core principle is true in collaborative accounting; however, the approach is to allow flexibility for drift and exploration of current issues as they arise.
Advisory vs Hands On
The accountant’s role is defined by the services that most needed at the time and may evolve over the course of the engagement. The fastest growing demand is for training small company staff.
Accountants traditionally view themselves as advisers, not actually getting involved in execution.
In collaborative work an accountant may have a close relationship with management, may be a partial owner, may have a state in the financial or operational success of the company. The accountant is not independent for the purposes of attestation for the client.
In some traditional accounting work, like auditing, it is important and desirable to have the accountant completely unaffiliated with the management of the client company. This works well to produce verification reports for government or public purposes. This is known as “attestation”. In providing most small business accounting services, independence is not useful or desired.
Which approach is best for you? We would be happy to discuss the options. Just schedule a free, no obligation call.