Tuesday, May 20, 2014

Developing the Invisible capital….Practising Cost Accountants

In my first article on Invisible capital: For Cost Accountants in Practice  I tried my best to give a clear picture about the practising insights for the new young Cost Accountants. In this series I would like to focus on the key areas where we all go wrong and get into the battle of frustration after starting the practising segment. This is the place where we upgrade the Invisible capital for the development of our practising profession. We need to adopt the culture of lean management through which we can get in to the inch of professionalisms. We need to reduce our wastage of time and focus more on efficient utilization of the time. We need a discipline approach and fixed routine unless we get the routine in to habit.  We need to focus on those areas where time and resources are not wasted. We often create the list of what to do. Well in practising we need to create the list of what not to do.  I have discussed about networking in the last article but this time I would like to help you further about the process of networking. Try to figure out the were of these questions and use them always when you are moving ahead in any direction in practising.

  •        Where to go alone and where to partner some one?
  •        Whether and when to invest in process for formulation and planning process?
  •        When and how to scale business?
  •         Which resources needs time to nurture and grow?
 One of the ways to include staff from cheap sources is employ the intermediate passed students so that they would also learn the process and they might turn out to be gems for your practising firms. Moreover with a young energy level remain on the top and any new venture can easily be cracked since young minds are the innovation hubs. In my research I have found that we find excuses when the going gets tough in practising. Over here I would suggest use the technique of validated learning where hiding story of failures and making story of failures are being avoided. In validate learning process you start discussing about the facts and figures and you find reasoning behind the failures and learn it into the process. It’s the opposite of blame game. This process is more important than the traditional process of speculative business approach. You make yourself and your team ready to read the facts and plan accordingly.
Well in order to read and hear the facts we need to have couple of questions handy which will guide your practising business.
  •       What should we build and for whom?
  •       What market could we enter and dominate the same?
  •       How could we create durable value that would not be subject to erosion by competition?
Remember the above questions needs to be grilled when one starts planning for the practising segment. All the above queries would lead to better networking and focused networking. I find many practising members who are new are shy and having negative mindset regarding how they will present themselves. Look if you stand in corner and glare at the people it will be of no use. Hence change the attitude and be the first to move and introduce you. If you are too nervous make introduction speech of yourself and just throw that to the networking. Rest will move as per normal discussion. In practising more than getting work and building network its important to have high moral values about your profession and high quality regarding your service, quality of delivery and work ethics. Remember smart people always would test you giving wrong proposals in order to test your ethical values and levels.  
Be careful of these traps. As a start up you will have pressure on your price negotiation for your services. Well don’t be afraid of the 1st deal. If you deliver the work with quality and high ethical values then next time you are best choice for the client. Since the client always knows better than you that from whom he can get what type of services. Remember today people value quality over price. More importantly try to design the process of the work delivery in such a way that next time you get referral from the client of another client. This is the best way of improving and keeping tab over the quality of work delivery over the time. Develop feedback system from you client. Many of my friends would say that client always ask more at cheap. Well that’s the cutting edge of killing competition and surviving.  Many feed backs may not be of any use but still it might throw some idea to create your practising unique. I am giving thrust more on cost accountants practising work since the Indian GDP is just going to enter in to huge growth phase. As cost accountant, try to figure out value creating activities and the ones which are wasteful and takes away much of your resources.
One question might come up that how to create values for the clients apart from the routine business. This is the place of creating competitive advantage. Try to understand the business of your client and offer him free advice about improving his business starting from process to revenue. When you advise them and develop strategies for growth you getting extra edge and the client gets you into notice and relationship start getting building. We often here that we should build relationship but we don’t know how to build the relationship other than work in hand. Hence we need to take an extra mileage for getting into the field of advisory.
We study the subject of strategic cost management but how many of us use the same in the advisory business model of practising. This is the place where we need to learn but after little struggle in practising we drop learning from our process and we become focus towards getting revenues and business profits to run the practising. This is the place where competition eats you and you narrow yourself down the time. You need to read, attain classes and learn strategic business management which will give you the edge of creating business value to your clients. Use your networking to connect the dots of the business growth for your clients. Like if your client is looking for a change in its suppliers of raw material help him to connect with someone in your network. 
This will automatically increase your practising value from both ends of the clients and also you networking gets strong relationship. This is the reason why I asked you all in the above lines diverse and be focused towards networking. This is process of developing firm and creating values for your business. Never compromise on values and ethics since the day you do some one will eat your business and you will be out of the market.  

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