Accountants, are you offering these services to stay relevant?

21st September, 2016

Accountants do great work with their clients every single week. They save money for clients. They make money for clients. They help their clients achieve their business and personal goals.

The trouble is, accountants are often so bogged down doing low-level compliance work that they rarely lift their head above the parapet to see what clients really need.

Having spent almost 10 years in a fast-growing firm whose mantra was: ‘We help our clients achieve more than they ever thought possible – and have fun doing it.’ Living by that mantra meant that we needed to find out what clients thought was possible, then design our offering to work with them to help them exceed that.

It was a tremendously client-focussed environment.

In the 19 years since I left the profession to focus on helping other accountants transform their own firms  it’s my observation that few firms set out their stall that way. In fact, over the years I have facilitated over 70 client advisory boards — a session to which you invite 12 to 15 of your best clients and have an independent person garner feedback, both positive and negative, on your firm.

One of the outcomes of those sessions has been an understanding of what clients actually want from their accountant over and above the compliance work.

1. Growth

Clients need your help to grow their revenue. They are often too close to their own glass and can’t see a way of doing things over and above what they have always done.

As an accountant, you have a great understanding of the numbers. I have found that if you get your client focused on two critical key performance indicators that all business owners can relate to, you can make a massive difference.

Those two are the number of transactions and the average transaction value. For example, if your client has monthly revenue of $50,000 and you are able to see that on average, they raise 100 invoices with an average value of $500, you can then get your client focused on one or both of those numbers with a goal to increase them.

If you manage to increase both by 10 percent your client’s revenue will increase by 21 percent. This is self-evident to you as a numbers person but it is rarely visible to your client. Your role is to agree on the projects to be implemented or tested, then set up systems to measure the results. Monitor the results and hold the client accountable. The client’s role is to implement the projects.

2. Cash flow

Many business owners struggle with cash flow.

They don’t understand the impact of allowing a customer to pay on extended terms or take seasonality into account. They pay for capital items out of operational cash flow. Again, these may be obvious mistakes to you as an accountant, but your client may need your help in this area.

When I was working with business clients, I used to have in my head a grab bag of facts that I could drop into the conversation to get them thinking.

For example, for every million dollars in revenue in your client’s business, just one day reduction in days in accounts receivable will free up approximately $2,700 in cash. So if you calculate that your client has 65 days in AR, and they have $1.5M in revenue, you could say to them:

“Were you aware that if you could get your customers paying you 10 days more quickly on average , that would free up about $40,000 in cash? And they’d still be paying you well outside your standard payment terms. What would you be able to do with that extra cash?”

3. Profitability

When you are talking to your clients about their goals and objectives, they will often lead with profit.

You’ll start off by looking at options to grown revenue, but when engaged in a profit improvement program, your accountancy training can take you into many other areas. These include:

Cost reduction: A thorough review of expenses to make sure your client is getting the very best return on their investment in every business cost.

Supply chain management: Follow your client’s product or service through from origination, product development, marketing, selling, delivery and collection of the cash. There will often be redundant processes that can be taken out to either speed up time to market or reduce cost of sales.

Sales conversion rates: You don’t need to become a sales expert, but you can implement systems to measure the business’ conversion rate from prospect to sale. Then go further by drilling down into the conversion rates of each salesperson. Then facilitate a workshop to transfer skills from the best to the rest.

Marketing return on investment: Many clients do not know which marketing activities work and which don’t. Your grasp of the numbers can provide enlightening information to them.

Ask customers: Facilitate a customer advisory board to gain feedback on breakdowns in customer service or new products and services your client might consider developing.

Clients also say they would like more help with:

Asset protection: If the worst happens, they don’t want to lose everything.

Tax minimisation: Do everything you can so that they pay the least tax legally possible.

Financial retirement: Design the business so it could still operate and generate a good profit if the owner decides to walk away.

Estate planning or legacy: When all’s said and done, what happens then? You might not do all of this work yourself, but as the trusted advisor you can coordinate others (lawyers or financial planners) to make it happen.

If your accounting firm was known to offer those eight services so that clients can achieve their business and personal goals — then you followed through to deliver — you couldn’t help but grow your own firm and client base.