These are tough times for accountants engaged in low-value, commoditised work for clients. Revenues are falling as more clients outsource work to lower-cost overseas providers and adopt accounting software that automates traditional accounting tasks. To survive, these accountants will have to change the way they do business.
Colin Dunn argues accountants can transform their roles. A former accountant and now the chief innovation officer at accountancy practice advisory group Proactive Accountants Network, he sees more accountants turning themselves into what would effectively be their clients’ chief financial officer, making themselves a key part of their clients’ team with a premium on their work.
In his book, Accountants – The Natural Trusted Advisors, he not only sketches the future, but also sets out how he thinks accountants can deal with it.
He tells accountants how to improve their advice to clients, how to align their firms with high-value clients who are right for their business and how to deal with issues raised by clients. He looks at the use of compliance as a springboard for consulting work and how firms can create a referral strategy and add value with analysis and reviews of business performance.
Dunn says accountants help clients in eight ways:
? growing their business;
? increasing profitability;
? improving cash flow;
? protecting their assets;
? helping with succession
planning and business sale;
? minimising tax;
? retiring with strong finances; and
? leaving a legacy.
“It’s our belief that these eight services are in the heartland of an accountant’s capabilities and that when they are offered consistently
To clients, they truly will position the accountant as the trusted advisor,” writes Dunn.
“Of course, if you are reading this and you strongly disagree with this philosophy because, for example, you would prefer to churn through 3,000 tax returns in a ‘sausage factory’ environment, then what we do is not for you.”
He points out that his firm’s surveys show that clients leave accountants for two reasons: lack of service and lack of services.
Dunn believes accountants have to change their mindset and move away from charge-out rates, focussing instead on value: communicating closely with clients, getting clients to appreciate what they need rather than what they think they want, and selling outcomes, not activities.
The problem with charge-out rates, he says, is that the only value lies in the time it takes to complete the work – which is often wrong – and it puts a cap on revenues.
He sees the typical firm with four or five partners often being caught up with too much compliance and administrative work. The solution: become either a boutique firm offering a niche service to a small and select client base, or a growth firm focusing
on high-value delivery, identifying and selling new projects, and advising with leadership and strategy implementation.
Accountants need to focus on ideal clients and design communication schedules for them, says Dunn. “Your ultimate goal should be to only work with A-class clients.” He also argues that accountants have to prioritise their visits to clients. A-class clients come first, the Bs next. D-class clients should be removed from the list.
Dunn cites the client selection criteria: a decent fee of $10,000-plus per year; an ability to pay for value; scope for business improvement; a desire to improve; a capacity to take advice; a positive mindset (glass-half-full types); the potential to make referrals; and being a good payer. They should also be known in the community, they should support the events and seminars put on by the firm, and the people at the firm have to like them. “If you want the right clients, stop accepting the wrong clients,” he says.
Dunn suggests creating a communication schedule with clients, including holding a 90-minute AGM with them (for no extra charge) to discuss accounts and plan ahead, three additional face-to-face meetings during the year to discuss how the business is travelling, invitations to connect via social media and the firm’s blog, and an invitation after three months to join a premium circle of clients to share ideas.
In effect, the accountant becomes the business coach. And indeed, accountants are in a better position to do this, because they understand the numbers and key drivers of revenue and profit.
To do this, they have to create a ‘wow’ environment, where clients feel like VIPs. This builds trust, which positions the accountant to move up the value chain.
Online, Dunn believes firms must embrace cloud accounting, where data is stored on internet-connected remote servers. Compliance done through the cloud can help to facilitate consulting work – creating, for example, a full KPI monitoring system, updated in the cloud in real time, on the client’s own system, skinned in the firm’s colours and logo, and looking and feeling like its own product.
In the end, says Dunn, it is accountants, not sales people, who are the rainmakers and who can build relationships.
Accountants – The Natural Trusted Advisors, by Colin Dunn, is available for $35rrp from infoshop.com.au