The first consulting firm was founded by Arthur D. Little, a professor at MIT who initially specialized in science, engineering and invention, and named the company after himself. Meanwhile, Frederick Taylor took his emerging theory of scientific management and became a management consultant, performing time and motion studies to improve manufacturing processes. Did Mr. Little and Mr. Taylor see the potential of a multi-billion-dollar consulting industry?
The oversimplified dictionary definition — an expert in a particular field who works as an advisor either to a company or another individual — says that anyone can become a consultant. There is no single qualification to be a consultant other than those laid down in relation to medical, psychological and engineering personnel who have attained a degree in it and professional licenses. For example, a legal consultant may be required to be a member of the bar and hold a law degree. An accounting consultant may be required to have an accounting designation, such as Chartered Accountant status. On the other hand, some individuals become consultants after a lengthy and distinguished career.
With such an ambiguous standard, it is more difficult to evaluate and score the best/worst or good/evil character of a consultant. Referrals or word-of-mouth continues to be valuable, each with a testimonial or story about an experience.
A consultant typically will have influence over an individual, group or organization, but will not have direct authority to implement changes.
There are professionals who are not consultants but do provide advice:
If you hired the right bookkeeper, they act as a business partner and not just a data entry person. Though a bookkeeper's primary role is not as a consultant, the bookkeeper with 20+ years of experience can offer priceless advice regarding procedures, accountability, cash control, etc. There are limits to what a bookkeeper can offer advice about, which is when an accountant or controller is called in.
Accountants are responsible for either creating or assessing a company's financial records, ensuring the company pays its taxes correctly and evaluating the company's financial records to improve efficiency. Whether an accountant is a consultant or advisor depends on the type of accountant role. An accountant may be an accounting consultant, but other roles include auditors, forensic accountants, public accountants, tax professionals and financial advisors.
Both bookkeepers and accountants can obtain certification through a professional organization such as AIPB (the American Institute of Professional Bookkeepers) or the AICPA (the American Institute of Certified Public Accountants). As with consultants, the terms bookkeeper and accountant can be used without certification. It's important to know what qualifications or certifications people have before hiring them.
Standards — Code of Ethics
Fortunately, there are accredited associations bound by a code of ethics which require members to provide practical advice that works. Such associations include the following:
• International Council of Management Consulting Institutes (ICMCI) has about 50 member institutes around the world. This organization offers a variety of membership options based on experience, education, and phase of business or career.
• Chartered Institute of Management Consultants (CIMC) is a not-for-profit professional body chartered federally under Letters Patent granted by the Government of Canada and registered under the laws of Delaware, U.S.A.
• International Federation of Consulting Engineers (FIDIC) Founded in 1913, FIDIC is charged with promoting and implementing the consulting engineering industry's strategic goals on behalf of its member associations. Today, FIDIC membership covers 97 countries of the world.
• Management Consulting Institute (MCI) MCI was founded in 2011, and board members include directors and partners from top management consulting firms such as Accenture, Arthur D. Little, Bain&Co, KPMG and McKinsey, as well as academics.
• Association of Accredited Small Business Consultants® (AASBC) is an association focusing on training and certification of small business and SME consultants to develop proficiency in the specialized area of small business and SME consulting.
• Institute of Certified Business Consultants® (ICBC) is a professional organization for business professionals with a global presence and a strong focus on professional values and high ethical standards, plus the opportunity for study and career advancement in the field of business consulting.
This is part two of a three-part series. In part one, Eric examined the increasing demand for consultants and considered whether the consultant is a force for good or for evil. Today he defines what qualifies a consultant and the standards to which they are held.
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About the Author
Eric Moore is the Practice Manager of Accounting Solutions Partners (ASP). He brings two decades of progressive experience in controller, CFO and general management roles with privately held companies. He has a broad perspective from working in environments ranging from start-ups to multi-generational mid-market companies with revenue in excess of $100 million.
Eric holds a bachelor's degree in business administration from Washington State University with an emphasis in accounting and finance. He is an active community volunteer, serving with various faith and compassion-based organizations for the last 20 years. In his free time, he enjoys spending time with his wife and three children, watching college football, traveling, hiking, riding his motorcycle and soaking in the sun at any warm beach.
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