It’s a debate of the ages. What is the best governance structure to run a firm? It’s probably not just restricted to a firm - most of us are wondering what’s the best governance structure to run a country. Unfortunately, there’s no perfect solution.
Good profitability, strong cash flow, growing return and being client-focused go hand in hand. At practice level, most accountants believe this, but they have a hard time identifying specific actions and communicating the benefits to clients in a manner they can understand and more importantly value. Here are 10 specific things you can consider implementing in your firm:
For as long as I have been engaged in the accounting profession, almost every firm I have been involved with or spoken to has acknowledged that there are additional services that they could provide to fulfil unmet client needs. A number like 20% of additional fees could be generated is often cited. Yet many firms consistently fail to unlock the opportunity.
I was recently asked what were the key observations you have seen in successful accounting firms around the world when it comes to client service. I have summarised below my top 10 steps to better client service from observations in Australia, New Zealand, United Kingdom and Canada;
There has been a mountain of press, blogs and videos predicting that the accounting profession is going to be replaced by silent machines sitting in data centres. Artificial intelligence, big data, data analytics, machine learning etc are all going to play their part. I have read a ton of material and in doing so it became clear to me that few people have any idea what these technologies will actually be doing and how these changes will come about.
Getting started with your advisory services and maintaining service momentum is one of the great challenges in our profession. How do we offer ongoing advisory services through dynamic board of advice meetings systematically with clients?
Remember the 1980s? Greed was good. Until Paul Keating killed it - it was the era of the long lunch. Technology’s relentless march gained momentum with computerised tax returns and other marvels changing the accounting industry forever.
This has been a key question I’ve discussed with clients in 2018, and in most cases the response is the latter. It might be due to inherent humility, but it’s common across all ages and demographics.
One key question I seem to get asked regularly is; what’s wrong with being a compliance practice and why should I add new services when we are already flat out? Both good questions with limited growth potential. Let’s consider a few key points.
Well the results are in. We have now completed our technology survey for the 8th year in a row. Some results are predictable such as the dominance of Windows 10 and the rise of Office 365.
1. Know how to explain simply to clients the products and services your firm offers. Understand both the features and benefits of each product and service from the client’s perspective.
Business Valuation is always a hot topic of conversation at accounting events particularly business advisory conferences. However moving away from the reactive side of valuations (business restructuring, tax reasons, court cases, mergers and acquisitions) is critical to developing a powerful advisory service. The value understanding that is what drives the value of the business is of key importance to SME clients going forward.
With the government’s plan to reduce the audit requirements for squeaky clean SMSFs from an annual audit to an audit every three years, perhaps it is time to ponder your strategy regarding SMSF audit.
At some time in the future of every accounting firm, we need to think how we will we get the message out there to the masses about our unique service offering. Practising with select existing clients is a great way to refine your advisory services, however, it is a slow growth strategy.
They say a picture tells a thousand words. On a website where you only have a matter of moments to engage the visitor it is even more important to use multimedia that engages, conveys a clear message and grabs the emotions.
Aren’t there a lot of Business Advisory solutions coming out of the woodwork? My email has been inundated with them of late. I am sure you are the same!
It’s understandable that many businesses are focused on the numbers at this time of year, which is great for Accounting Practices.
The dream of every accounting firm is to have a client base that supplies perfect information on a timely basis. Achieving this dream is akin to searching for the elusive holy grail. You’re sure it exists but it’s almost impossible to find.
Recently I attended a five-day Company Directors training course run by the Australian Institute of Company Directors. Each of the days covered a related topic such as strategy, risk, finance, governance and the like. The days were very well run with great interactive facilitation and practical case studies that related to both corporate, small business and not for profit boards.
We are all guilty of procrastinating on particular issues, but I’m sure everyone would agree that in the end, it doesn’t do us any favours. In business, we may miss an opportunity, lose a client or not achieve as much as we could in terms of day to day and ultimate success. Business Insider Australia previously compiled a list of 20 essential tips to maximise productivity and get more done. We’ve detailed seven of these ideas that we think could make the most difference to your productivity:
Fairly regularly I come across firms who for one reason or another have engaged a marketing consultancy. For many, this is entirely the wrong move. Few marketing consultancies understand the nuances of professional service firms. Many focus on things which might have some merit like brand and website but miss the core matters to be addressed when marketing professionals.
If someone was to ask me what is the most valuable asset within an accounting practice, my answer would be that it's a combination of our expertise, our systems and our processes. These things make us different from our competitors. How often have you heard firms say it's their people or their processes that make them stand out from the opposition?
One of the great opportunities in business advisory service delivery is to develop a niche market with clients or prospects. Wikipedia defines a niche market as:
The world has moved on from PC based advisory tools and solutions. The time has come for change!
As you may be aware, following the completion of ATSA 2017 we sold the event to National Media, the owners of the Accounting Business Expo.
Your Client Relationship Management (CRM) system in an integral part of your firm’s business advisory success.
With every technology change, the criminal element comes running in working out ways to exploit it. The cloud then is such a wonderful opportunity for the crooks. Without leaving their lair they are presented to the door of almost every piece of data on the planet. All they need are the keys to open the door.
Automation of accounting is a constant discussion. All sort of predictions are being made, all sorts of technologies are being discussed. It's hard to sort out what is real and what is fantasy.
In part 1 of this series, I outlined some thoughts in relation to machine learning and big data and the impact on the accounting profession. These are just some of the technologies that are mooted to transform the world of accounting. Now in part 2, we’ll consider whether the promise may be delivered and other technologies that may impact how firms will operate.
There seems to be unrelenting discussion about the machines taking over. The accounting profession seems to always be mentioned as one of the professions where there will be significant impact. Yet in reality there is very little evidence that the machines are taking over.
Are you aware of the New Payments Platform (NPP) (www.nppa.com.au) being developed by the RBA and the banks? It’s not too far away.
As many readers would be aware, for many years, I have conducted reviews of practices. These reviews provide insights into improvements that can be made in how the firm is organised and managed. These insights are not rocket science but only come from years of work with a variety of firms and personal experience of the successes and failures.
I was recently asked to give my impression of business advisory trends and developments from my recent and past work and travel in the United States, Canada, New Zealand and United Kingdom. Some of the key developments I have observed over time are as follows;
As I have conversations with and work with firms, a constant theme is frustration with accountability. People unwilling to be accountable and others being unwilling to hold people accountable. It’s not a simple thing to solve. It’s partly a cultural problem, it’s partly a problem of, in many instances, using the wrong performance measures and it’s partly a problem of a lack of an accountability framework and process.
Wikipedia defines estate planning as the process of anticipating and arranging, during a person's life, for the management and disposal of that person's estate during the person's life and at and after death, while minimising gift, estate, generation skipping transfer, and income tax.
One of the most important qualities of a great leader of an accounting practice is the ability to get along with people, to show compassion and to make others feel good about themselves. This article is part one of a two-part series providing some tips in becoming a great leader in your practice, that others want to follow.
I was recently asked "what are the key things you see in successful accounting firms when it comes to client or customer service?" I am passionate about customer service and have summarised below my top 10 steps to better customer service;
As I’m sure you’re aware, big data and data analytics has the potential to transform the profession in analysing financial results and providing new insights to clients regarding the performance of their business. Projects like Chartered Accountants Australia+New Zealand Kairos are attempting to apply the data/data analytics theories to real world small businesses. There is a lot of potential but many commentators feel that we won’t see big data & data analytics reach its potential until the 2020’s.
If you had asked me that question when I first got into accounting many decades ago (don’t ask how many) I would have fallen off my seat with laughter. Who in their right mind would want to see their accountant, let alone speak highly of them.
I’ll give you a hint… it’s not "how much tax do I owe?"
In today’s dynamic accounting market, brands are so much a part of our day to day lives that we forget how much we depend on them. Look at successful businesses like McDonalds, Qantas, Air New Zealand and Coca Cola for example. Their brand is well recognised and the market knows what goods and services they offer.
A few years ago, I travelled over to the United States and was very fortunate to attend the Disney Leadership Excellence training in Anaheim, California.
Some older readers would remember my days in the 80s and 90s creating and running what was in the 90s, the PKF Technology software business (Corporate Register System and Superfund SMSF admin software) before it was sold to Solution 6 (now part of MYOB) in 1999. It was an exhilarating time being in the vanguard of the PC revolution, but also a very challenging time as continual technology shift required ongoing reinvention of the products and the business.
One of the pivotal issues that arose at recent firm staff interviews and staff retreats is that our clients do not get their telephone and email issues addressed in a timely manner. Many practitioners and administration team members have mentioned to me that they get frustrated when the client calls back often agitated that they have not had a return call or email in what they consider a reasonable time. This is always one of the top three improvements that is suggested to improve customer service.
An interesting observation from our recently completed #ATSA16 Technology Survey was the adoption rates for various technologies had dropped over the past two years. Now this may be a result of many firms having now implemented the new technologies but to me I think there is more at play.
Every week we hear and read about the impact on traditional compliance work. We hear that traditional accounting services are drying up and with it our revenue streams. But are they really. Or is that we need to rethink our services and the value we add to clients.
I’m sure you’ve had the experience of firing up an application on your PC, phone or tablet and thought to yourself “which idiot designed this?!” as you go hunting around for the “obvious” things you need that the programmer has cunningly hidden away.
One of the pivotal issues that arose at recent firm staff interviews and staff retreats, is that our clients do not get their telephone and email issues addressed in a timely manner. Many practitioners have mentioned to me that they get frustrated when the client calls back often agitated that they have not had a return call or email in what they consider a reasonable time. This is always one of the top 3 improvements that is suggested to improve customer service.
Every week we hear and read about the impact on traditional compliance work. The best way firms can address this perceived loss of income, is by making sure we highlight and reinforce what we do well for our clients. Tax planning is a great example of a simple process that certainly does this.
The dynamics of technology in today’s date is something that cannot be overlooked. With advancements on a daily basis, when it comes to the field of accounting, technology has easily managed to convert compliance into a commodity with no special need for this aspect to be overseen or supervised. Taking this into account, many accountants today are seriously considering or have already decided on outsourcing a major chunk of their activities that are not a part of their main business function.
Do you lie awake at night worrying about the cost of IT in your practice and feel that it’s a never ending black hole for your cash. Or do you jump out of bed impatient to leverage how technology can enable transformations in firm efficiency, client service and profitability.
Practice Managers in accounting firms face numerous challenges on a day to day basis. Some of those include, what I consider, to be the top issues in many firms I have worked with and consult to. Let’s look at some of the main challenges;
According to Harvey Nash CIO Survey 2015, 56 per cent of Australians believed they have been affected by digital disruption — 21 per cent higher than the global average.This possesses significant threats to the Australian economy, specifically on the accounting industry. But more than just a fad or a buzzword, digital disruption is real and only those who can turn these threats into opportunities and adopt to this innovation will be able to keep up.
There has been a lot written in recent times about the risks surrounding outsourcing with particular emphasis on the new privacy laws as well as the general protection of data and the access to personal information of clients.
In today’s dynamic accounting market, brands are so much a part of our day to day lives that we forget how much we depend on them. Look at successful businesses like McDonalds, Qantas, Virgin, Apple, Microsoft and Coca Cola for example. Their brand is well recognised and the market knows what goods and services they offer.
Approximately 18 months ago I travelled over to Canada to run the Canadian Accounting Technology Conference (CATS). This is the Canadian version of Smithink’s popular Australian ATSA event. On the way over via the US, I was very fortunate to attend the Disney Leadership Excellence in Anaheim, California.
In many firms the challenge continues to attract and retain star performers. Many are struggling to have sufficient capacity to complete their known work in the pipeline, let alone have sufficient free resources to develop and deliver new services.
In my last post I spoke of accountants not being particularly good sales people and that they generally do not selling. Creating a want based service is very different from a needs based service. Perhaps selling is the wrong word to use on this occasion.
Small and medium-sized enterprises (SMEs) are increasingly looking for more from their accountant. With the explosion of cloud-based accounting solutions to manage their numbers business owners need an accountant who is more an advisor and can offer a comprehensive advisory service. Many clients are now conducting business from their mobile devices and have access to new dynamic applications to analyse business performance.
Well it had to happen. We were caught by one of those vicious phishing attacks. A simple click on a malicious email set it all in motion. Easy to do but with somewhat dire consequences. It allowed access to the particular email account. Messages and contacts deleted and the malicious email sent to the contacts in that account. It all could have been avoided with some simple measures. I’ll come to that later.
Who doesn’t love a bit of Shakespeare? One of my favourite lines is from Hamlet:
Neither a borrower nor a lender be, for loan oft loses both itself and friend,
Follow these steps and you can be one of the 20 per cent of accounting firms that successfully implement business advisory services in a reasonable time frame.
Wikipedia defines leadership as “the ability of an individual or organisation to lead or guide other individuals, teams, or entire organisations through a process of social influence in which a person can enlist the aid and support of others in the accomplishment of a common task".
Wouldn’t it be wonderful if your clients went “wow” and went off and told their friends about the information or advice they have received from their adviser?
I have often heard from accountants that they are not particularly good sales people or that they do not enjoy selling. To be frank, when it comes to compliance selling is not really required. The service is a need based one that most clients cannot do themselves. In addition, the ATO does a great job of selling on our behalf. When it comes to business advisory services you really do need to sell this want based service. Here are a few tips that may help.
In today’s dynamic accounting market brands are so much a part of our day to day lives that we forget how much we depend on them. Look at successful businesses like McDonalds, Qantas and Coca Cola for example. Their brand is well recognised and the market knows what goods and services they offer.
Before your clients list their house on the market they generally go through it room by room and fix it up. They may paint, replace a stained carpet, clean up the garden etc. They make their house look loved and cared for and ensure that it is at its best when prospective buyers walk through at the open for inspection.
Few are happy about the changes that are coming on 1 July next year. It certainly adds to the compliance burden and has the danger of making advice unaffordable or unprofitable.
Every business has a code that underpins the way they operate from a financial viewpoint. Not knowing your code is like walking through a maze blindfolded. The code of any business consists of the four drivers of profit and three drivers of the balance sheet.
In the 1980s some psychologist in the US conducted an experiment with immigrants from the old Soviet block. They took them to a supermarket and got them to buy basic items like bread, milk, toilet rolls. What do you think happened?
It's the promise of the NBN. Beautiful high fidelity communications across the country. The challenge of course is whether we are young enough to eventually see it happen. Perhaps it's a promise to those that are just a twinkle in mum & dad's eye!
With a growing number of business advisory software tools on and entering the accounting market it is often difficult to know what to choose.
What do your clients really think about the services that you are providing? How would they rate your services out of 10? Are you supplying all of the information that could be supplied to assist your SME clients build value in their businesses?
In today's dynamic accounting market, brands are so much a part of our day to day lives that we forget how much we depend on them. Look at successful businesses like McDonalds, Qantas and Coca Cola for example. Their brand is well recognised and the market knows what goods and services they offer.
Do you dread the request to have a video Skype, FaceTime, Google Hangouts Video or some other video session with a client? Many don't feel comfortable with the medium. Talking to a camera is like talking to a dead fish. It's also complicated by the fact that the technology often doesn't meet its promise. Video quality can often be poor due to connectivity issues and audio can also be impacted as video chews up the available bandwidth.
Most leaders in professional service firms have spent years defining themselves by the skills they've developed – be they technical skills, decision-making skills, strategic thinking skills, account management skills or negotiation skills. Many have spent insufficient time identifying values and personality preferences so they can "be and work at their best" each day they manage and lead others within the firm.
Why did I do it? I started with hopes and dreams. I believed I could make a difference. I no longer want to kick the cat. I want to kill it. My evenings have turned from a nice glass of wine to half a bottle of scotch. Why did it come to this?
Good profitability, strong, sustainable cash flow, growing return and being client-focused go hand in hand to business advisory success. At accounting firms, most accountants believe this, but they have a hard time identifying specific actions and communicating the benefits to clients in a manner they can understand and value. Here are 10 specific things you can do to improve your service delivery:
When you talk to your clients about their business what quickly becomes very clear is that most have a good idea as to what what they need to do to move their business forward. The problem is not the idea, it's the implementation. Most business owners are time poor, buried in their businesses churning out their products and services - locked into the day to day. Being the owner, they are also only accountable to themselves so if they are slow to implement their ideas or make the changes they know are necessary to their business, they can justify these failures by arguing the day to day demands are just too great.
Business Valuation is always a hot topic of conversation at accounting events, particularly business advisory conferences. However, moving away from the reactive side of valuations (business restructuring, tax reasons, court cases, merges and acquisitions) is critical to developing a powerful advisory service. The value understanding that is what drives the value of the business is of key importance to SME clients going forward.
We have all no doubt studiously trawled over the various annual reports available on Accounting Practice performance; earnings per Partner, average spend on IT figures, etc. But what are these figures not showing, what more can be gleaned? Do you compare yourself against your own potential as keenly as you do against your competitor? Accountants are great at measuring what's happened, but not always so good at what could happen, especially within their own business.
Ever heard of the term "Aspirational Spelling"? It's a consequence of the technology age where no-one needs to know how to spell anymore since our friends at Google, Microsoft and elsewhere will pick up those errors and often autocorrect them without you knowing or at least highlight where spelling errors exist and suggesting replacements.
Every business eventually runs out of gas, including accounting firms. Failure to recognise this can destroy the creative potential in an organisation with the misguided decision to maintain the 'status-quo'. I believe, recognition of this is the key to growing advisory services in our profession.
Back in early November I travelled over to Canada to run the Canadian Accounting Technology Conference (CATS). This is a Canadian version of Smithink 2020's popular Australian ATSA event. On the way over via the US, I was very fortunate to attend the Disney Leadership Excellence in Anaheim California.
I was recently talking to Evan Bulmer from EBBA about his journey with business advisory service implementation. Evan's story is incredibly successful and inspiring. I asked him to share a few ideas for Smithink 2020 readers, and he will also be presenting at our Business Advisory Conference in February, see below (introduction by Mark Holton):
January is the month for holidays, for relaxing, for contemplation. For me that involves spending time at Port Stephens out on the water trying to skillfully convince a succulent fish to hop onto my line. As anyone knows such an exercise involves a great deal of patience. As I've sat in the sun replenishing my stocks of vitamin D, it occurred to me that business development for accountants is a lot like fishing.
I recently returned from work and travel in South Africa and Canada where I presented to accountants in practice in Durban, Johannesburg, Capetown and Toronto. My presentations were on moving your practice from Compliance to Reliance and How to Profit from Compliance. These are really fancy titles for the process that needs to be adopted to implement sustainable and profitable business advisory services in an accounting firm.
It starts to get pretty scary and exciting for accountants when someone from the ATO makes a series of comments on the industry.
MYOB ProfitOptimiser has been around a long time and at one time had much of the business advisory tool space on it's own. As it has taken time for the software to get to the web a variety of other sophisticated and visually attractive cloud solutions such as Cash Flow Story, Fathom, PANALITIX and Profit Guardian, just to name a few...are now available. There has literally been an explosion is new and innovative cloud based advisory applications and I expect more in the next 12 months.
Most partners and directors of accounting firms tell me they don't have a "debtor problem". This may be correct, but only in part. Almost all accountants' debtors do pay – eventually. The sobering statistic is that in Australia the average debtor days for accounting firms has stubbornly sat at around 55 days for many years. Yet, the average credit terms offered by accounting firms is 14 days. So generally, accountants are getting paid nearly four times slower than their terms of trade provide.
The sky is falling, the sky is falling! So says Chicken Little. For public practitioners the mantra has been for years - compliance will cease to exist, compliance will cease to exist. There's no money in compliance. There's no money in compliance. The Chicken Littles of the accounting industry have been everywhere. But, as anyone in practice knows, that's a lot of hogwash. There's still good money to be made in compliance.
A few weeks ago I spoke at the Chartered Accountants SMSF Conference. At the end of my address I made some comments that accountants need to consider that technology may drive automation to such an extent that accountants may be disintermediated from some services. These comments were reported in some news services and social media and generated some comments to the effective I am living in a different universe.
I was recently asked to give my impression of business advisory trends and developments from my recent and past work and travel in the United States, Canada and United Kingdom. Some of the key developments I have observed are as follows;
When I conduct client consultative groups for firm a question I ask is whether the clients have visited the visited the firm's website and for what purpose. Sadly the answers are quite depressing. Many have never visited the website and for those that have by far the number one reason is to obtain the firm's telephone number!
The number of self-managed super fund members has topped more than one million, according to the Australian Taxation Office Self Managed Super Fund Statistical Report, March 20141. The same report shows SMSF assets now total nearly $559 billion, with market growth of 5.66 percent in the previous 12 months.
The profession is bombarded every day with messages that unless you get your practice and your clients to the cloud, the world is going to end for you very soon. While that may be a gross over statement there are clear benefits in utilising cloud technologies which can significantly reduce costs, provide ready access to data on any device anywhere, enable collaboration / sharing of data with clients and enable sophisticated automated processing, utilising advanced data feed and data matching technologies.
There is considerable debate in the accounting industry that cloud accounting applications and automatic data feeds are going to continue to commoditise compliance services. For years there has been ongoing discussion of the need for accountants to focus more on business advisory services - to become the holistic adviser for their clients. The thought is not new but there does appear to be a heightened reality that the profitability of tax and accounting compliance services is being threatened by the new technologies.
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Business owners most often request a valuation when a decision is made to sell the business. For most SME owners aside from the family home their business is their most valuable asset. What many don't realise is that their business may be worth far less than they think. For this reason it is vitally important business owners understand the value of the business, how it is calculated and how to improve it.