Traditional vs. Collaborative Accounting

I have a history of collaborative work with small businesses in several different industries

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, so it is natural for me to take the same approach to small business accounting engagements. This post is meant to describe the unique characteristics of collaborative accounting.

Defining engagements

Traditional

A core principle of an accountant’s work is a clear understanding of the client, the industry, the work and it cope and limitations. Protections are often built into the agreement to prevent ‘drift’.

Collaborative

The core principle is true in collaborative accounting, however the approach is to allow flexibility for drift and exploration of current issues as the arise.

Advisory vs Hands On

Traditional

Accountants traditionally view themselves as advisers, not actually getting involved in execution.

Collaborative

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 of small company staff.

Accountant’s Independence

Traditional

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 for the production of verification reports for government or public purposes. This is known as “attestation”.

Collaborative

In far more cases, however, independence is not useful or desirable. 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.