Ready steady, keep on going!
Sunday, August 7, 2016
Martin Bissett examines the challenges faced by accountants wanting to grow and develop their practices.
If my 18 years experience working with the accounting profession has taught me anything, it’s that we like to get in the way of our own success. Most of the challenges we face are far more psychological than they are operation or logistical.
The thing about accountants is that they occupy, should they wish to, a unique position in the minds of their clients. We know it as the oft-repeated phrase ‘most trusted advisor’.
Simply put, if you are one of these trusted advisors, you’re supposed to be good at what you do, run your own business successfully and be well worth your fee.
“Most of the challenges we face are far more psychological than they are operational or logistical…”
On the presumption that all of the above points are true, then we have to overcome the great challenges of practice development that we set up for ourselves. So what are they?
The great challenges
- The needless discounting and low balling of quotes as if you wouldn't get the engagement if it were priced correctly and so prefer to create a false and detrimental impression of your worth right from the outset.
- Discounting when a new piece of work is required by a client. If we’re asked to do extra work, the client presumably rates us for the work already done. Reflect that value in the fee.
- Discounting when a client disputes the bill. Did you set realistic expectations at the start? Good, charge full value. What are they going to do, leave? If we've you sprung the bill on them, no wonder they’re annoyed, in which case discount and feel lucky to have kept them. Don’t make that mistake again.
- Stating that ‘accountants are boring’ in an ironic self-acknowledgement of the commonly held myth surrounding the profession. You’re not boring and by trying to curry favour by employing self-deprecating humour we’re just perpetuating the myth. Don’t perpetuate it, disprove it.
- Hiring marketing support staff that know nothing about professional services and have no track record. Its unlikely that what worked in their last role in wine retail will work for ‘trusted advisors’. The appointment will cost money, not create it.
- Taking six weeks to get back to a potential new client after the initial meeting. The excuse ‘we’re so busy’, doesn't tell the client that our firm is in demand; it tells them that they are likely to receive a service as crappy as the one they are getting when they are supposed to be in this ‘courting’ phase with us.
“Please start understanding, and respecting your own value in the marketplace with clients who could not reach their goals without you”
- Saying you convert 95% of opportunities once your foot is in the door. You’re talking about referrals and we all convert 95% of those. Marketing brings about non-referred opportunities, ones that we have to sweat to get but would've been unlikely to have gotten any other way. 25% of those converted is good going initially.
- Claiming low client attrition rates as a barometer of great service. No-one moves accountants unless they need to and very few know why they need to because they are not educated very well by competing firms. Our clients are perpetually at risk, minimise the liability with actual good service as in, what the clients values about us rather than what we think is good about us.
- The political in-fighting with your peer level colleagues. This is a team game. And now that I've got that off my chest... Please start understanding, valuing and respecting your own value in the marketplace with clients who could not reach their goals without you. Businesses are in need, sometimes desperate need of your technical expertise and caring approach. Take that to them instead because, speaking as one who is looked after well myself, we love it and we are prepared to pay a premium without ever asking for discounts.
I’ve had the benefit of meeting, speaking and observing hundreds of very successful and unsuccessful partners over the last two decades and there is indeed a set of differentiating factors that set a partner apart from the chasing pack. Here are the
best-selling behaviours that I’ve observed:
None of us can have a track record of partner level excellence on day one in the position but we can be road tested in handling client affairs with integrity, in the pro-active identification of commercial opportunities for a client, in the effective and successful handling of client crises; and a broad range of experience across multiple sectors.
Clients can hear, feel and detect knowledge, assurance and experience. The more stories we have in our collection that demonstrates this, the more we validate our ‘Competence’.
2. Emotional investment
True facts: Not all partners care about clients. Not all partners are motivated by a keen sense of wanting to support and assist their clients. Not all partners can relate to, empathise with and think as their clients do. If you can, you’ll stand out. That simple. That complicated.
3. Sense of self-worth
I've never understood the accountant who talks about incredible service on the website but discounts their bill on the first challenge from a client. That doesn't speak of self-worth, it doesn't stick up for the work of the team that reports to the partner and it sets a dangerous precedent with the client going forward. It’s a sign of an insufficient understanding of one’s own value to the client’s business.
To be assured is not to be arrogant or cocky but simply ‘proven’. Clients will always pay a premium for ‘proven’.
4. Joint accountabilities
A person rarely blames themselves and often blames another party, it’s just human nature. Through a lack of effective communication and the sense of self-worth described above, I’ve noticed that many elements of work carried out for a client are often left to chance. For example, the accounting firm is often blamed when a client incurs a penalty because they are guilty not providing true, accurate and on-time information to them.
This has happened because the client did not fully understand the dangers of doing so.
They are immersed in the affairs of their business. Often, they do not have a comprehension of the various financial reporting requirements on them. Often, they are not educated by their accountant either and it’s at times like this that ‘assumed knowledge’ takes over on both sides.
The accountant has assumed the client would do what was required of them and the client has assumed you’d wave your magic wand and make it all alright if they didn’t.
Blame only travels in one direction in such circumstances (I feel a fee discount coming on) and the onus, sadly, is on the accountant, whom is the ‘expert’ here remember, to correctly educate and prompt the client to do their part WITHOUT taking the blame when they do not.
An advisor is trusted when they can show that they took responsibility for their end of the bargain in the client engagement, educated the client of their responsibilities and then offered prompting and assistance throughout. But they have then allowed the client to
ultimately govern themselves in terms of following through on their commitments.
This then empowers the advisor to make a commercial decision when the client now faces the consequences, as to whether they want to provide even more assistance to make things all better for the clients.
The advisor will then gain huge appreciation and emotional capital (which can be leveraged for higher fees and referrals in the future – but that’s another article.)
Perception is reality
This advisor with these four prominent traits is the one who is up front, honest, proactive but nobody’s fool – and as a result, perceived as the ‘trusted advisor’. And we all know that in the mind of our client, the ‘perception’ is the reality.
Martin Bissett is founder of consulting firm, the Upward Spiral Partnership. He has worked in the UK, USA and Europe with a huge variety of clients ranging from sole practitioners to Global Top 30 firms. More information can be found on www.martinbissett.com. CPAA members can email Martin at: email@example.com